Nemetschek SE ($NEM)

Hello, everyone, and a big welcome. Thanks for joining our call today to discuss the Nemetschek Group's acquisition of HCSS that we announced yesterday night. With me today are our CEO, Yves Padries; and our CFO, Louise Ofverstrom. Today's conference call is being recorded. A replay of the call will be available at our website after the call. Additionally, you will find the press release and the presentation on our Investor Relations website as well. First of all, Yves will walk you through the presentation, and then we have enough time to answer your questions. But now let's get started. So I would like to turn over to Yves.

Thank you very much, Stephanie, and good morning, everyone, and welcome. Exciting times for the Nemetschek Group. In addition to our Investor Relations team, I am joined by our Chief Financial Officer, Louise Ofverstrom. Today is a very special and exciting moment for the Nemetschek Group. I'm truly delighted and proud to announce that we have signed a definitive agreement to acquire Heavy Construction Systems Specialists or short HCSS. HCSS is, I would say, the leading provider of technology solutions for the highly attractive infrastructure and heavy civil construction markets in North America. The acquisition is expected to close in the second half of 2026 and is therefore pending and subject to customary regulatory approval and closing conditions. The transaction marks a major milestone for the Nemetschek Group and an important step forward in our journey to become the global leader in the ACO industry. Given the very short notice for this call, it is great to see so many of you joining us today. So thank you all for your time and your interest. We'll walk you through this transaction and explain why this is such a compelling and transformative step for Nemetschek Group. Before we dive into the details, you will see an overview of today's agenda on Slide #2. In addition to the press release we published late last night, we have prepared a presentation that covers the key aspects of the transaction in more detail. I will start by outlining the company's strategic rationale behind our decision to acquire HCSS. Then we'll give you an overview of the attractive business, product portfolio and positioning of HCSS, the tailored transaction structure as well as the significant value creation potential, including attractive synergies we see from this acquisition. And finally, we will open the call for your questions during the Q&A session. As you all know, M&A has always been an integral part of Nemetschek's DNA and a key driver of our long-term success. Over the last decade, we have built a strong and highly successful track record of acquisitions, including key deals such as Bluebeam or GoCanvas as well as a number of highly innovative technology acquisitions, for example, lately, Firmus.ai in October of last year. At the same time, we have always been very selective in our approach, ensuring that every transaction is a perfect fit in terms of strategy, scale and culture. And this is exactly why we are so excited about HCSS. HCSS is one of the most attractive assets in the entire ACO software space with a leading market position in the highly attractive infrastructure and heavy civil construction markets, combined with a very strong and profitable growth and a very close relationship with its customers. By combining HCSS with our leading brands in the Build and Construction segment, we are creating a unique combination of scale, growth and profitability and a global construction technology powerhouse covering the full range of the market. So we are building the next global construction technology giant. Given the size and quality of HCSS and the fact that it is by far the largest acquisition in our company's history, a traditional debt financing transaction will have required a significantly higher level of leverage, limiting our financial flexibility and increasing the risk. This is why we have chosen a tailored transaction structure for this deal. It allows us to execute this transformational step while maintaining a strong balance sheet and preserving full strategic flexibility for future investments and acquisitions and also brings Thoma Bravo, the world's largest software-focused investment firm on board as a very strong partner. Importantly, it also means that the Build and Construct segment, including HSS, will remain an integral part of the Nemetschek Group and will continue to fully control, manage and consolidate the business within our integrated group structure with Thoma Bravo as a minority shareholder in the Build and Construct segment. So our ambition is clear: to set new standards in construction technology and further reinforce Nemetschek Group's position as a leading global player in the ACO industry, making this transaction a key milestone and an important building block in the company's history. And it is also helping us to push forward the fact that we are becoming a vertical AI leader in the ACO industry. Moving on to Slide #5, which summarizes the key element of our strategic rationale for the acquisition of HCSS and highlights why we are so excited and confident the transaction will create substantial value for the Nemetschek Group as well as for our customers and, of course, our shareholders. Let me now walk you through the key elements of our strategic rationale in more detail. First, this transaction is about creating a leader in construction technology. It significantly scales and strengthened our position not only in the build and construct market, but across the entire AEC industry. By bringing together HCSS, one of the world's largest provider of infrastructure and heavy civil construction software with our existing build and construct portfolio, so Bluebeam, GoCanvas, including Seydoux and Nevaris, combining that with their leading solution across the building construction segment, we are combining highly complementary capabilities across infrastructure and buildings, covering the entire construction life cycle in all end markets. Second, we are significantly expanding our addressable market and further strengthening and scaling our position in infrastructure, thereby making the overall Nemetschek portfolio more balanced and ultimately even more resilient. Infrastructure and heavy civil construction is a highly attractive segments supported by very strong structural growth drivers such as aging infrastructure, large-scale government investments and ongoing urbanization. In HCSS, we gained direct access to a significant size in the segments and significantly expand our opportunity in build and construct by more than 30% in our market expanding to a growth at a CAGR of around 11% and reaching approximately USD 12 billion by 2028. At the same time, we are further strengthening our presence in North America, one of our key growth region. Third, the combination of our technologies creates a comprehensive end-to-end construction software portfolio, enabling seamless workflows across different user groups and markets. Furthermore, we see strong cross-selling opportunities by accessing new customer segments and additional verticals as well as the ability to scale HCSS through our existing global footprint in EMEA and Asia Pac. As a result, we also expect competing top line as well as EBITDA synergies as part of the deal. In addition, very similar to the Nemetschek Group, HCSS as a vertical software provider is ideally positioned to win in AI due to its deep domain expertise, customer relationship and network effect as well as 40 years of proprietary industry-specific data. Combining that with Nemetschek's advanced AI capabilities will enable us to benefit from the huge workforce-related TAM opportunity in the construction industry. And finally, we are doing all of this while preserving our balance sheet strength, our strategic flexibility as well as our group structure and the successful way we operate our business, enabled by the tailored transaction structure. As I highlighted earlier, the Build and Construct segment, including HCSS, will continue to be fully consolidated and managed by the Nemetschek Group. Thoma Bravo as a minority shareholder in the Build and Construct segment. Together, by combining their strong software expertise with our deep industry knowledge and operational capabilities, we are very well positioned to capture the significant growth opportunities in the build and construction market. Next few slides provide a comprehensive overview of HCSS and its industry-leading end-to-end platform for infrastructure and heavy civil construction. HCSS headquartered in Sugarland, Texas U.S.A., is one of the world's leading provider of infrastructure and heavy civil construction software with more than 550 employees. The company is purpose-built for self-performing contractors offering an end-to-end platform of mission-critical solution across the entire project life cycle from bidding a job, delivering safely, on time and on budget. HCSS has more than 4,000 customers primarily in the U.S. and Canada, and its solutions are trusted on some of the world's most iconic projects. The customers now win 75% of work across 50 U.S. Department of Transformation markets and produce 40% more bids than competitors, thanks to HCSS solutions. HCSS combines strong growth with a very attractive profitability profile comparable to our stand-alone Build and Construct segment. In 2025, HCSS generated around $215 million in mainly recurring, so subscription-based revenues. Over the last years, company has built an impressive track record, combining sustainable strong top line growth, for example, an ARR increase of 21% in 2025, combined with a very high profitability reflected in an EBITDA margin of around 40% in U.S. GAAP. Mission-critical nature of its solutions deeply embedded in its customers' daily workflows drives a very highly customers' loyalty and strong retention are reflected in their KPIs, such as extremely low churn rate of below 2%. HCSS, very close and long-standing customer relationship was a foundation for decades of proprietary industry-specific data, a highly valuable asset in the age of AI, covering solutions such as HCSS predictive AI. So let me walk you through HCSS solution portfolio in more detail on Page #8. HCSS is a vertical software provider with deeply integrated purpose-built solutions supporting every stage of the project life cycle for infrastructure and heavy civil construction. This product platform is structured around 3 core functional pillars: estimating, operations and fleet, anchored by 2 core systems of record, EBID and Heavy Job. Starting with estimating. EBID is an industry-leading solution for heavy civil contractors, enabling highly accurate cost modeling, optimized bidding and full support for both platform and subcontracted work. Operations, EBID job serves as the operational backbone connected field teams with the office through real-time data, production tracking and cost visibility, complemented by HCSS plans, field communication and HCSS safety, digital safety management. And finally, in fleet, HCSS provides integrated solutions for asset tracking, utilization and maintenance, enabling real-time visibility, reduced downtime and optimize fleet performance through tools such as Equipment 360 and telematics. Overall, what stands out is a deep integration across all 3 pillars, creating a unified platform that connects estimating, execution and fleet management and is, therefore, deeply embedded in customers' daily operations. Creates what clearly differentiates HCSS is its strong customer-centric approach and consistent focus on delivering measurable value. Slide #9 illustrates how HCSS delivers tangible and measurable impact for customers on a daily basis, driving real ROI, which is the foundation for its customer loyalty, high retention rates and ultimately sustained strong growth. Across the platform, HCSS solutions deliver clear and measurable improvements in customer performance. For example, customers using heavy bids meet up to 60% more bids, while Heavy Jobs enables 88% of projects be completed on or under budget, while HCSS safety users achieved a 96% lower reportable incident rate compared to the industry average. This clearly highlights the strong and measurable value delivered by HCSS to its customers in their day-to-day operations. As mentioned earlier, we have chosen a tailored transaction structure for this deal. Let me now take a moment to walk you through the structure and key elements of the transaction as outlined on the next Slide #11. Transaction structure is designed to further strengthen our Build and Construct division, while maintaining Nemetschek's financial strength and strategic flexibility. As part of the transaction, Thoma Bravo will contribute HCSS to our existing Build and Construct segment, which already includes our leading brands, Bluebeam, GoCanvas, including Seydoux and Nevaris and in exchange, we will receive a minority shareholding in the combined segment. At the same time, we'll refinance all of HCSS existing financial debt and liability, which will impact Nemetschek Group's net debt position by approximately EUR 450 million. Following closing, Nemetschek will hold approximately 72% while Thoma Bravo will hold around 28% of the enlarged Build and Construct segment. Importantly, the Build and Construct segment will remain an integral part of the Nemetschek Group, and we continue to fully manage, control and consolidate the business within our integrated group structure. This also means that the transaction has no impact on the organization or shareholder structure of the Nemetschek Group, as you will see on the next slide. On Slide #12, you see our familiar overview of the group's organization structure. Apart from Media segment, which account for less than 10% of our current revenues, we are fully focused on the ACO sector with our 3 segments, Design, Build and Construct and Operate and Manage covering the entire life cycle of buildings and infrastructure projects. And as you can see, apart from the addition of HCSS and the minority shareholding of Thoma Bravo in Build and Construct segment, there are no changes at all on the organizational and shareholder structure of the Nemetschek Group. We will continue to control, steer and manage Nemetschek Group as one integrated group. Let me now walk you through why we are convinced that this transformation transaction will take the Nemetschek Group to the next level in terms of size, market potential, product offering and financial profile and therefore, create substantial value for our customers and shareholders. Let me start with the underlying infrastructure and heavy civil construction market, which forms the foundation of the software market we are now able to better address with this transaction. This market is a highly attractive, strongly growing and resilient and supported by several strong structural growth drivers. First, we see significant investment needs driven by an aging infrastructure worldwide with global spending expected to exceed $100 trillion by 2040. Second, this is supported by major current infrastructure programs and sustainability investments worldwide, such as the $1.2 trillion program in the U.S. and the EUR 500 billion package in Germany, which provides long-term funding and sustainable demand for the market. Third, the construction industry in infrastructure and heavy civil construction still shows a very low level of digitalization, creating substantial potential for efficiency gains through software, AI and automation. And finally, the ever-increasing labor shortage in the construction industry are accelerating the need for digital solutions, which offers potential to address the huge workforce-related TAM for this underlying market with our AI-driven and Agentic solutions. Building on this strong underlying infrastructure, heavy civil construction market. The next Slide #15, illustrates the significant software market opportunity we are now able to address. With the acquisition of HCSS, we are now significantly expanding our existing market opportunity from around $7 billion to around $9 billion, representing an increase of around 30%. This expansion is driven by our massively scaled exposure to the infrastructure and heavy civil construction segment, complementing our existing exposure to the buildings market. At the same time, this combined market is expected to grow at a CAGR of around 11%, reaching approximately $12 billion by 2028, therefore, further strengthening long-term growth potential for our build and construct segment. Very important slide on #16, which nicely illustrates the breadth and completeness of our combined Build and Construct portfolio following the acquisition of HCSS. Historically, Nemetschek Group has been a leading technology provider, primarily focused on the design, construction and operations of buildings with strong solutions across all key verticals highlighted here in blue, including residential, commercial and public buildings. The addition of HCSS and its highly complementary product portfolio, we are now extending our capabilities further into infrastructure and heavy civil construction highlighted here in green on this slide. This includes key areas such as highways, railways, bridge as well as water, sewer and electricity networks, effectively filling the remaining gaps in our portfolio. As a result, now offer a truly comprehensive suite of mission-critical software and technology covering all major end markets and customer groups across the construction life cycle. Beyond the significantly expanded market opportunity as well as a greatly increased scale of our business, we also see an attractive synergy potential over the medium term due to this acquisition. These synergies can be broadly grouped into 2 categories: top line synergies driven by go-to-market and product initiatives as well as cost efficiencies. On the revenue side, we expect to benefit from broader customer access, cross-selling opportunities and an accelerated global presence as well as strong product integration across field and office workflows. For example, Bluebeam will gain improved access with its best-in-class collaboration tools to the infrastructure sector, while at the same time, enabling HCSS to benefit from its global footprint, channel partners and customer base. Other examples are GoCanvas, which will further strengthen the field forms and safety solution for HCSS while gaining access to HCSS customer base or Nevaris will enhance its offering in infrastructure, particularly in the DACH region by leveraging HCSS capabilities. On the cost side, we see efficiencies, for example, by leveraging the combined AI capabilities of the Nemetschek Group and HCSS as well as by realizing economies across areas such as sales and marketing, G&A, IT infrastructure and, of course, R&D. In sum, we therefore also see a synergy potential of at least a mid-double-digit million euro amount on EBITDA in 2028. Let me briefly highlight how the acquisition of HCSS support one of our most important strategic priorities. Nemetschek's transformation from a leading vertical software player to a vertical AI leader in AEC. We are deeply convinced that AI represents a tremendous opportunity, and we are clearly positioned to capture it. You may recall Slide #7 from our last earnings call, which outlines the key foundation that position us to win in AI. Over decades, we have built deep domain expertise and strong integration into our customers' workflows as well as long-standing trusted customer relationships, strong network effects and vast industry-specific data sets across the entire life cycle, primarily in buildings. And it is exactly this critical prerequisites that HCSS now brings the Nemetschek Group for the civil engineering and infrastructure domain. Building on this strong foundation, we are leveraging our proven AI strategy and HCSS strong AI capabilities across 3 key levers: product innovation, targeted M&A investments as well as strategic partnerships, all aimed at accelerating our AI road map and scaling AI across the group. This ultimately enables us to further expand our addressable market by unlocking the significant workforce-related TAM in our industries by strengthening our competitive moat and building a scalable data and intelligence flywheel across our platform. In addition, we are further enhancing our internal efficiency, driving tangible cost savings that enables additional investment in our long-term growth. So Slide #19, bringing all of this together, transaction translates into a highly attractive and significantly strengthened financial profile for Build and Construct segment, and therefore, the entire Nemetschek Group. We are maintaining, in part even enhancing the already strong growth and very profitable profile of the segment, but at a significantly larger scale. To give you a sense of this, by 2028, we expect the combined Build and Construct segment on a stand-alone basis to generate more than EUR 1 billion in revenue. This is a milestone that we have only just achieved at the entire group level for the first time in our history in 2025. At the same time, business will be characterized by a highly recurring revenue base of around 95%, exceptionally strong customer retention and an EBITDA margin of more than 40%, a level clearly above the group average. All of this means that we are building not only a Rule of 40 business, but a segment close to a Rule of 60 profile, a truly unique combination of scale, growth and profitability in the entire AECO industry. Slide #20 shows what this ultimately means for the Nemetschek Group. With a significantly increased share of our business coming from the high-growth and high-margin build in Construct segment, we are further enhancing the overall growth and profitability profile of the entire Nemetschek Group. The same time, the transaction leads to a substantially improved and well-balanced end market exposure. While infrastructure and civil engineering have historically played only a minor role for the Nemetschek Group at around 10%, it will now become a much more meaningful part of our business, driven by the increased exposure to the resilient infrastructure and civil engineering markets. As a result, we are significantly reducing our dependence on residential and commercial construction cycles as infrastructure, civil engineering and public sector demand tend to be structurally more stable and less cyclical. Ultimately, it creates a significantly larger, better balanced, more resilient and stronger Nemetschek Group, well positioned to deliver sustainable growth and long-term value for our customers and shareholders. Now as we are coming to the end of our presentation on Slide #22, we have summarized the most important transaction highlights. We have already covered in detail the key terms of the transaction, the attractiveness of HCSS as well as a significant increase in scale, market opportunities in infrastructure and heavy civil engineering as well as growth and margin potential the acquisition unlocks for Building segment and for the Nemetschek Group, of course. The result of this transaction is the creation of a construction technology giants with a truly unique combination of scale, growth and profitability across the entire AECO industry. The acquisition is expected to close in the second half of 2026 and is subject to customary regulatory approval and closing conditions until the transaction close and each company will continue to operate independently. More details regarding the transaction, potential synergies as well as the expected impact on Nemetschek Group financial as well as the outlook for the current financial year will be disclosed after closing. With that said, I would like to thank you for your attention, and we are now happy to take your questions. So operator, please, back to you.

[Operator Instructions] Our first question comes from Alice Jennings from Barclays.

I think my first question is just on the ARR growth of 21%, obviously, very impressive. But I was just wondering what have kind of been the main drivers of this in the last few years in terms of is this strong market growth or like which particular segments of HCSS has driven that? And then what are your expectations for that growth going forward? And then the second question is just on the revenue synergies. So yes, quantified the kind of synergies from EBITDA. But could you give any kind of color on the level of contribution you expect just on the revenue side from the acquisition?

Thank you. So as you have seen, yes, the ARR in 2025 was 21% for HCSS. It is mainly driven by very strong new logos and user growth. Pricing is not only per user. They have also pricing based on the size of the customer, the size of the construction projects, et cetera. So it's not only a per seat. Clearly, they had a very nice growth in terms of user base, new logos, et cetera. So that was clearly the main drivers. And yes, the infrastructure industry is growing, I mean, especially in North America. So of course, that's the benefit they have is to be part of this very significantly growth market in North America in heavy civil infrastructure. What we expect in terms of revenue growth for the coming years, here, I will not talk about ARR, but more about revenue. So clearly, if you look at the revenue piece, we are in clearly very high teens type of revenue for the next few years, I mean, close to 20% clearly for HCSS. Then on revenue synergies. So clearly, the revenue synergies, if you look at what I said before on the synergies, which would be on the EBITDA side, which is mid double-digit million euros by 2028, I mean, you should assume -- and that's at least what we expect as a synergy and EBITDA. So that's the minimum. It should be over that. Around roughly half of it will come from revenue and half of it will come from the cost side.

The next question comes from George Webb from Morgan Stanley.

Congrats on announcing the deal, and thank you for the overview. I've got a few questions, please. Firstly, are you able to kind of help us understand where HCSS is in its growth cycle? It's been around since 1986. It's not a new company. It's a bit over $200 million of revenue, as you mentioned, 17% revenue growth. And just noting that your partner, Thoma Bravo bought the business in 2021, what are the strategic things they've been doing with the business over the past few years? And have they done a subscription shift journey in recent years? That's the first question. Secondly, just a little bit more detail on HCSS and its AI journey in terms of product road map and monetization strategy would be great. And then just last one, which I guess is more financial and technical. Is the debt associated with this deal to be held within Build and Construct or at the group level in the sense that will Thoma Bravo in their minority result be accountable for 28% of the related interest? Or will that all go to the Nemetschek shareholders?

Maybe I'll start from the back. So starting instantly with the debt that's very straightforward. So yes, as always, we refinance on the most senior level in the Nemetschek Group, but we give that through intercompany dependence on how we fund that, but that is given to the Building Construction will be debt on the Build and Construct division. So of course, also there, both shareholders are liable for the growth and also the interest expense. And of course, we also expect a quick deleveraging as always in the Build and Construct segment. That's also, of course, the normal assumptions that we take also here given what you also used to see from us.

And thanks, George, for your question. So HCSS's growth is clearly coming from seats, new logos and progress the cross-sell, as I mentioned. So it's more than price. Clearly, we have the same phenomenal great success than Bluebeam. Clearly, the growth potential in North America is still very, very significant. And interestingly, the infrastructure and heavy civil construction market is even much more conservative than in buildings, which is surprising, but it's a fact. So they are more conservative. That's why also the churn is only 2%. And of course, the fact that they have a very strong product portfolio, but more conservative in the fact that the level of digitalization in heavy civil and infrastructure is even slightly lower even than in buildings. That's why we have huge opportunity of continued growth and the structural drivers of infrastructure and heavy civil digitalization is still there for many years. Then on the AI front, so they have worked on many, many aspects. As I said before, Nemetschek and HCSS are vertical software provider with domain expertise in AC that is deep and specialized and that are integrated in the workflow and process of HCSS customers. And as you know, ACO is a specific and special industry. Construction and AC are niche, highly regulated and fragmented. And they have done a very, very strong progress in their solutions. So we see clearly also very nice opportunity of combining Nemetschek and HCSS AI capabilities. For example, AI expands our addressable markets from tools into outcome-enabling services. Value we can create through AI will be much larger through these as the services TAM, so humans and services TAM in construction is significantly larger than the tool TAM, so the software TAM. And by joining forces with HCSS, we can now address an even larger scope of services and deepen into an intelligence that spans architecture, engineering and construction. And in addition, also extend our customer base that we can monetize with AI servicing on. So data and intelligence loops create compounding advantage. Every project run through our system makes our AI smarter. And this makes our AI smarter. This is not just features, but it's proprietary intelligence that improve this usage and cannot be easily replicated. This will enable us to create even bigger modes and competitive advantage, especially versus start-ups or even potentially new market entries. Operating leverage and reinvestment is also key. AI-driven efficiency gains are systematically reinvested compounding innovation velocity and competitive advantage. So we see clearly that given the incumbent and deep understanding of the domain data from estimate to delivering projects, HCSS is sitting on a unique opportunity to leverage AI. And with Nemetschek and Bluebeam advanced AI competencies, we believe that we can bring value to customers and even more value to customers via AI. And then if you look at the Nemetschek AI Hub and Bluebeam Firmus AI acquisition, this sets us up to help HCSS bring valuable use cases such as intelligent schedule optimizer, where, for example, AI agent can continuously analyze production rates, crew utilization and weather forecast to detect schedule changes to help identify productivity drops and recommend solutions. For example, working with Nemetschek AI Hub, HCSS can deliver quickly an assistive AI kind of a co-pilot capabilities, where assistance is embedded directly into the users' workflows to provide real-time and conceptual intelligence, having users operate with expert level proficiency without ever leaving their active task.

And I think maybe just to add one thing to that Yves, which is very important as we always discuss as well, this is a highly, highly conservative industry. And that's why trust is the basis for everything in AI here. And that's the domain -- deep domain expertise of HCSS with the Nemetschek Group. We both bring an enormous amount of trust to the market. And combined with our AI capabilities, we really see that this is really the unique opportunity also to leverage on both the data, the proprietary knowledge, but also the trust that we bring together to the market.

So and again, George, so they have the HCSS AI features. So they have this AI-assisted cost estimate builder, which is institutional knowledge. So the value proposition here is that this tool solves a major industry problem by digitizing the expertise of senior estimators, surface insights from past projects, ensuring that even after senior employees retire, their experts insight remains accessible to the next generation. Then they have another AI feature, which is quick pricing in preconstruction efficiency. So here's the value proposition is that the AI feature increases bid, throughput and accuracy by leveraging data-driven suggestion based on historical production data. It moves estimator from tedious manual data entry to a high-level strategic review, allowing them to focus on the high profit margin business. And of course, all know our great AI features and products as an MHA Group, such as what we are now planning for launching since last month or since even end of February with Bluebeam Max, et cetera, and our AI visualizer.

The next question comes from Charles Brennan from Jefferies.

Congratulations on the deal. I've got 3 fairly quick questions, if I can. Firstly, the deal structure here is relatively complicated. Is there some kind of puts and call transaction in place and a time line associated with it for you to get rid of the Thoma Bravo 28% holding? It doesn't feel like that's an optimal structure going forward. Secondly, I've had lots of investors asking me today what the implied enterprise value is you're paying for the business. Can you give us what the theoretical value was you attributed to the Build division so we can calculate that EV -- and then lastly, if I just look at consensus expectations for the Build division today in 2028, it's about EUR 830 million of revenue. Against that backdrop, your EUR 1 billion target feels like it's a growth downgrade relative to consensus. Is your assumption here that we come out with revenue numbers that are comfortably above EUR 1 billion when we add this combination in?

Thank you very much. So clearly, on the deal structure, to be very, very clear, there is no put and there is no call at all. So Thoma Bravo, we are very, very pleased to partner with them. As you know, the worldwide leader in software private equity investments. And their options to exit is that either we acquire their shares, part of their shares. Second option is that we partner with another sponsor and a private equity partner, who would acquire Thoma Bravo shares or option 3, which is an attractive one, too, is to do an IPO. But if we do an IPO, the IPO will be only for Thoma Bravo shares. We will not sell shares at the Nemetschek level. We will still stay as a high owner and majority owner of the Nemetschek Group. So then on the implied enterprise value. So here clearly, what we have done to make this deal was to take EBITDA of both business, HCSS EBITDA and Build and Construct EBITDA. And then, of course, you put a multiple on top of it. If it would have been over a year ago, this deal, as you know, the multiple will be in the 35 or even above. If you look at today, we are probably in the 20-plus type of multiples. So it's really relative. Whatever the multiple is, if you take this piece of EBITDA split, the ownership split will be 20% for Nemetschek and 30% for Thoma Bravo. Here, we preempted deal. I started the discussion with Thoma Bravo a long time ago. We had HCSS in our radar a very long time ago. This is from my view, the leader in infrastructure and heavy civil software in North America. And we really wanted to increase significantly our presence in the construction and build segment, in particular, in infrastructure and the public sector and heavy civil. These assets have been impossible for us to acquire in a normal process. And Thoma Bravo didn't want to sell these assets, wanted to do a full process later. And -- but this would not have been accessible for us. So we started to brainstorm and I suggested this creative structure so that we are able to acquire HCSS without impacting our leverage and of course, our balance sheet and potential future investment power. Of course, with a slight small control premium. But at the end of the day now, if you take also the fact that we are financing all the HCSS debt, which is around EUR 450 million, we will finance via some cash and, of course, debt. We are now at slightly around above 22% ownership and the 28% ownership for Thomaravo.

Yes. And I think what we should really highlight here is that we are entering this highly attractive segment on these parameters, as Yves just outlined. It's not a plain vanilla deal, but we are really combining forces and combining the joint forces between Thoma Brava and ourselves to continue to create value. I think there's a huge testimonial to the value creation potential that is in here. And I think also that we get the direct access now to this highly attractive segment, we get the direct access to this underlying business of proprietary data, domain knowledge, et cetera, in the segment that would have taken us a long time to build up if we would not have acquired this and to also retain our full flexibility of our balance sheet for future additional growth on top. I think that is a unique opportunity at this kind of financial profile that is unseen in the market.

And then to answer your last question, I can say in a very comfortable way and that clearly, we see the Build segment in 2028 to be above the EUR 1 billion revenue and also at an even much higher profitability than today. Again, we are talking above 40% EBITDA margin over EUR 1 billion revenue with 95% of this revenue being recurring. So clearly, a transformation deal for us.

The next question comes from Agarwal Deepshikha from Goldman Sachs.

I just had a couple -- like 3 of them. So first of all, like looking at the asset at HCSS, where is it on the move to the subscription journey? I think it said that the majority is like on subscription. So just get a sense of how much of that ARR is on traditional maintenance versus subscription? And while you said -- while it said ARR growth last year was 21%, what has been the trend line growth of it in the past? Second question is basically on the competitive dynamics. Can you just give a little bit of detail in terms of what are the key players that this asset typically comes across in North America? And how do you see it differentiated versus them? And the third one will be basically like on the overall -- just basically like a follow-up of that like a question in terms of how to look at the valuation of the asset in terms of -- would it be like based on what you said, would it be fair to assume that roughly it would be closer to a 20-plus EBITDA multiple on the asset?

So if you look -- thank you for your question. So if you look at HCSS, yes, they have around 85% of the revenue is recurring. Out of this 85%, it is mainly subscription. So -- and when you say subscription, 60% is cloud. So it's cloud connected. So 60% is cloud and SaaS and 40% is subscription, but on-prem software subscription like we also have some of the Nemetschek portfolio. And then if you look at the ARR growth in the recent years, it was very similar in the 20-plus type of percent ARR growth. Maybe second question on the key players. So as I say, I would say that they are the leader in heavy civil and infrastructure software in North America. They are #1, clearly a big #1. And then you have a smaller #2. And in the #2, you would have Innate, you would have also then Trimble. And then you have a much smaller player such as Procore and Autodesk, but they have a very small market share. So clearly, Innate and Trimble are kind of the #2-ish and then Autodesk and Procore much smaller. And then you have a very small long -- highly fragmented across ERP and some OEM extension and long-tail point solutions of small players.

But I think also, Yves, we can add to that, that ETS is substantially larger, has a substantial minority piece in the market. And then the other ones are really much smaller. So I think this is really, as you said, the way we look at it is this is the leader.

Yes. So it's clearly 3 to 4x bigger than the second 2 or top 3 player in the market. And I explained the fact that they have 2 end-to-end solutions for infrastructure.

The next question comes from Michael Briest from UBS.

A couple from me as well. Just in terms of the Thoma Bravo, do they get a seat on the group Nemetschek Board? Or will they not be represented there? There's no mention of the accretion you expect from the deal, and I appreciate it's a complex structure. But could you give any indication on 2027 accretion? And then the debt that you're inheriting, I appreciate you want to pay some down and refinance quickly. But clearly, it's multiyear debt, there's a cost to that. Can you give any sense of what the interest payments would be in a full year and how quickly you expect to be able to bring those down?

Thank you very much. So clearly, Thoma Bravo, they do not have any Board seat at the group level. They will have a minority Board presence just for the Build and Construct segment as they have 28% minority in the business, and we have around 72%...

Yes. And as to the accretion, yes, it will be accretive after 2027. I think it's important to see we always have -- of course, we need to -- that needs to play out when we close the deal, right? But also we always have some haircuts, et cetera, at the beginning. But I say it's definitely an accretive deal. And also as to your question of interest rates, et cetera, let us come back with that as soon as possible. You can assume, so to say, our normal financing conditions. You also know where we are standing in the market with a very good investment-grade rating. So of course, very comfortable interest rates there. But we have still not really decided what part of cash and debt we will use. That's a little bit depending also on the final amount. But let us come back to that, Michael, as soon as we close the deal.

Sorry, did you say after 2027, it will be accretive?

Yes. Just depending a little bit also how the purchase price adjustments come, et cetera, but that's closely there, so to say. So definitely after 2027, give or take, but definitely not thereafter. Also thereafter, of course, but not later. Also there are [indiscernible] but not major.

Yes.

The next question comes from Victor Cheng from Bank of America.

Congrats on the deal. A number of my questions have been answered but maybe a couple of follow-ups. You talked about competition maybe on the North America side. As we look at Europe as well, any kind of opportunities to expand here? Who are you seeing as the bigger competitors in the Europe side? And then secondly, when I look at the customer size as well, you mentioned a wide range of customer size, but I think that the average ticket size is a lot bigger than the typical Bluebeam customer. So just wondering kind of is it a different kind of go-to-market? How much synergies can you extract from there? And I guess, lastly, I just want to double check what you said earlier, you mentioned that Thoma Bravo will be also paying 28% of the debt interest since you said that will be on the build and construct segment.

Yes. Thank you very much, Victor. So yes, clearly, as I said, we are in my view, the leader, HCSS in North America for civil and infrastructure. Now if you look at competition outside North America, so first, we are doing this deal really to focus on North America. We see huge opportunity of growth in North America alone. So as we may also go a little bit more broader internationally, but we will probably pick more carefully in which markets because if you look at this business outside North America, especially in Europe or in Asia, it is highly fragmented. It's not like you have a huge big player in -- in Europe, for example. So you will have a localized regional by region, like you have one good player or a couple of player in Scandinavia, in U.K. and in DACH, Central Europe, et cetera. So we are really going to be very careful on our internationalization piece because the growth, we see it still there for a long, long time in North America. Nevertheless, we see strong opportunities for us in Germany, especially also thanks to Nevaris because Nevaris has already some capabilities there. And now they will enhance -- we will enhance Nevaris capabilities with HCSS to really tap even further and stronger infrastructure and heavy civil market in Germany. And then there could be also some other markets we are currently defining in Europe. So for example, Thoma Bravo in HCSS, they made a small acquisition in France last year, but there could be also other opportunities maybe in the Pacific, et cetera. Now if you look at the customer size, you're completely right, Victor. HCSS, first of all, they only do direct go-to-market. Only have their own sales team and they sell directly. They don't have indirect, they don't have web store. So it's high touch in some pieces, but it's clearly bigger type of customers. Of course, they have also very small customers, but a big part of their revenue is coming from e-plus larger type of customers. And this is where it's beautiful because, as you know, Bluebeam, yes, we also have very, very large construction companies as customers. So that's why these guys are also sometimes HCSS customers and Bluebeam customers. But interestingly, what HCSS will benefit is the fact that Bluebeam is very, very strong in SMB. Bluebeam is already strong in SMB also in infrastructure and in heavy civil. And we will be able, thanks to our channel go-to-market, but also web store to really help accelerate some of the growth of HCSS, it's indirect and web store go-to-market capabilities that they do not have today.

Yes. And maybe last but not least, yes, the debt would be Build and Construct debt. So that will, of course, be carried by the Build and Construct division and therefore, also proportionally by both shareholders.

[Operator Instructions] the next question comes from Naing Nay Soe from Berenberg.

I've got 2 as well, if I may. The first one and maybe one for Yves, starting with your product strategy going forward or product road map. You've done a few acquisitions, including GoCanvas and Firmus AI as well, really building up a strong product portfolio in the Build segment. I was wondering if you got any -- how should we think about consolidating these different acquired assets going forward because we've seen in the industry of how much technical debt it could create if you go through multiple acquisitions in a short span of time. And then my second question is around customer overlap. Considering that HCSS has got a big presence in infrastructure and heavy civil industries that Nemetschek has less presence in. Is it correct to assume that there is little customer overlap between HCSS and Nemetschek Group today?

Thank you. So clearly, if you look at our road map and also on the M&A front, we are focusing on is really more technology acquisitions, so buy versus make. And we are looking a lot, as you know, in AI acquisitions. So -- or at least in AI venture investments. So that's why we made around 16 start-up investment over the last 3.5 years in AI. We acquired Firmus.ai last year and also manufacturing, which has also an AI angle. But of course, we are continuing to focus on AI. Doing more consolidation in the market, this could be an option. But I would say that for the moment, we want to digest first is a very important strategic transformation deal for the Nemetschek Group. If there are interesting opportunities, and there will be, we will, of course, look at them. But as you know, we are very sensitive on how we pick our M&A activities. So we want to make sure that when we do something, we are either #1 or #2 in the market. and also making sure that we have very strong technology, very strong potential growth for the future and of course, strong profitability so that this business is not going to dilute too much our growth, of course, and our EBITDA. And AI is very indifferent. So AI, we will build a much smaller type of companies. Yes, might be a little bit more EBITDA dilutive, but at the end, with a much, much, much smaller scale, but this will accelerate our vertical AI leadership in AEC. If you look at the customer overlap, I mean, there are some customer overlap, but it's mainly coming from Bluebeam because Bluebeam and HCSS are both very strong in the U.S. So a good portion of HCSS customers are already using Bluebeam, but it's not like it's 80%. So it's like a good percentage is already using Bluebeam. And of course, with Allplan, this is more in the design and planning phase. We have Allplan still, which is more for purely transportation, bridge, road tunnel design. For example, Autobahn here is a very strong customer. Here, there might be also some nice also opportunities potentially to cross-sell Allplan solutions to some of HCSS customers. Of course, that's not clearly a big part of the synergy, but it is an opportunity. And when I look at other interesting opportunities is that we have already some HCSS customers who are also using feed management solution from GoCanvas, for example. So here, there is also an overlap, not huge, but still, there are clearly GoCanvas customers, who are also HCSS customers.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to the management for any closing remarks.

Yes. So thank you very much for your questions and the discussions and thanks for attending our call today. And if you have any follow-up questions, so please do not hesitate to contact me or Patrick. We are available, of course, today, tomorrow, whenever you have a question. And if there are no further questions, let's conclude our call today. Thanks again for joining and catch up soon. Thank you very much.