In this Research Note, we examine the Manage segment of Nemetschek, which provides software for the management and operations phase in the building lifecycle.  It is based on the 2021 annual results, investor presentations, and report of the parent company published on 22^nd March 2022 and the group’s M&A strategy in the smart buildings space.

The Nemetschek Group, the No 1 Architecture, Engineering and Construction (AEC) software provider in Europe and one of the top three global AEC software vendors, is digitizing the building industry, through its portfolio of independent brands, including Allplan, Bluebeam, dRofus, GraphiSoft, Nevaris, Vectorworks and Solibri focused on Building Information Management (BIM).  Listed since 1999 and quoted on the Frankfurt Stock Exchange, the Munich-based company generated revenues of €681.5 million in 2021.

Nemetschek Group strengthened its portfolio in the building operations management market in 2018, addressing a new customer group and extending its target markets beyond Design and Construction. The Manage segment had previously consisted of Crem Solutions, a German provider of software solutions for commercial and technical real estate management. The business was augmented through the acquisition of MCS Solutions, now rebranded as Spacewell, for a purchase price representing a revenue multiple of between 3-3.5x. based on 2018 revenues of around €15 million.  

Spacewell offers an Integrated Workplace Management System (IWMS) that covers core functional areas in real estate, facility and workplace management for large private and public organizations. Additionally, the firm has developed a smart building platform based on COBUNDU IoT sensors and big data analytics to optimize productivity and efficiency in both occupant experience and facility service delivery.

In January 2019, Nemetschek strengthened the Manage segment further with the acquisition of Axxerion, a Dutch SaaS provider of workflow-based cloud software active in facility management, property & real estate management. Axxerion revenues were around €12 million in 2018 and the purchase price amounted to around €75 million.

In December 2020, Spacewell acquired Dexma Sensors S.L., Barcelona, Spain for a purchase price of €19.2 million in cash. The company is a provider of Software-as-a-Service solutions with AI/machine learning capabilities for energy data management.  The acquisition expands the Spacewell portfolio with an AI-powered energy management solution. Dexma 2020 revenue amounted to €3.5 million.

The smallest of four reportable segments accounting for 6% of Nemetschek 2021 revenues, the Manage segment increased revenue growth by 7.0% to €43.7 million. Similar to the previous year, Covid-19 led to continued adverse effects on demand from customers in the facility management sector. EBITDA increased by 10.1% to EUR 4.1 million.

The deployment of Spacewell’s smart workplace solutions across multiple locations in the finance sector in the Nordic region was one of the highlights of 2021. With the recent win of a Nordic-Baltic banking group – on top of an existing customer base of major financial players in Northern Europe – Spacewell claims to lead in the workplace software segment for the finance sector in the Nordics. Spacewell’s total scope in this vertical currently includes more than 100.000 users across 723 locations.

In April 2021, Spacewell released a new workplace app for the hybrid workplace. Developed from COBUNDU’s Personal Assistant app, the Workplace app shows real-time floor plans and occupancy of different rooms and workstations across different floors. With this, co-workers can: find a free spot quickly, locate team members and see live how busy it is in a particular room or on a particular floor. In addition to occupancy, employees can also check the temperature and air quality at their chosen locations, book the desk or space, and order catering and equipment.

Revenue growth of 7.0% in the Manage segment was lower than Nemetschek Group’s overall growth of 14.2% and compares unfavorably with their Design and Build software businesses, which saw growth of 11.7% and 14.9% respectively. 

Spacewell ranks high in the global IWMS market but has yet to gain significant traction in the broader smart buildings space. 

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.