Nemetschek SE
XETRA:NEM

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Nemetschek SE
XETRA:NEM
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Price: 98.5 EUR 0.51%
Market Cap: 11.4B EUR
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Earnings Call Transcript

Earnings Call Transcript
2019-Q2

from 0
Operator

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 Stefanie Zimmermann, Director, Investor Relations, who will lead you through this conference. Please go ahead.

S
Stefanie Zimmermann

Thank you, operator. Good morning, everybody, and welcome to our conference call. Thank you for joining us to discuss our results for the first half 2019. Today's conference call is being recorded. A replay of the call will be available at our website after the call. As always, we have prepared a presentation with the most important figures and highlights of the second quarter and the first 6 months of 2019. You will find the presentation, the quarterly report and the press release on our Investor Relations website as well. But now let's start with the presentation. I would like to hand over to Patrik Heider, who will lead you through the presentation.

P
Patrik Heider

Thank you, Stefanie, and hello to everyone. I'm glad that you have joined our earnings call today. I will be brief in my presentation so that we have enough time for your questions afterwards. In the second quarter, we delivered again a strong growth of more than 20% on a high profitability level. Overall, I'm extremely pleased with our first half in terms of revenue growth and our operational performance. We are on the way to another record year in 2019. Let me give you a more detailed overview of the first half year highlights on Page 2. Our top key figures for the first half 2019. We had a strong growth in the first half of 2019 and increased our revenues by around 24%. Main drivers remained our recurring revenues with a growth of around 35% and the growth in our international markets with a growth of more than 30%. EBITDA margin reached high, 28.6%. This high margin was partly positively influenced by the new IFRS 16 leasing standard. This margin includes all our investments to sustain our high top line growth, M&A-related costs and additional dilutive EBITDA margin in the Manage segment. Our cash conversion remains very high at 90.4%, so that we can continue to grow our business both organically and via acquisitions. End of June, we performed our share split 3-for-1. Please note the effects in our EPS. On the acquisition side, we had 2 brand-level acquisitions in the first quarter, one in the Manage segment and another one in the Media segment. Both acquisitions are already well integrated. Additionally, we signed a contract with Ricoh to sell our minority stake in DocuWare. This will lead to a one-off gain of around EUR 33 million after closing in the third quarter and will significantly increase our EPS. DocuWare Solutions are successfully integrated in some of our brands, such as Nevaris and Cram solutions. Following the closing, the cooperation between DocuWare and the Nemetschek group brands will continue. Let's turn to Page 3. Some more details on our top key figures in the second quarter. We continued our fast growth of more than 20%. Besides a strong organic growth of 14.9%., Spacewell contributed around EUR 7 million in the second quarter. We still saw in the second quarter a tailwind coming from the U.S. dollar. We expect that this headwind will come down in next half year, with a nearly balanced situation in the next 2 quarters. As already mentioned, recurring revenues from software maintenance, contract and subscription continued with a very strong growth of 36.6%, especially driven by subscription. Our profitability with an EBITDA margin of 29% was, on a high level, also influenced by IFRS 16. The adjusted EBITDA margin of 26.3% is in line with our guidance. The EPS rose significantly by 20.8% to EUR 0.19. Let's turn to Page 4 and the half year figures that show a similar picture. Top line growth was at high 23.9%, with a strong organic growth of 17.9%. Spacewell contributed around EUR 12.9 million in the first half. Additionally, we had a currency tailwind of around EUR 7.5 million. In first half, recurring revenues from software maintenance, contracts and subscription were the main growth driver with a plus of 35.3%. Our profitability with an EBITDA margin of 28.6% was high, and the adjusted EBITDA margin without the IFRS 16 effects was at 25.9% and is in line with our expectations. This margin includes our additional investments for innovations and next-generation solutions, further internationalization and M&A-related costs. Additionally, we have a below-average EBITDA margin of the Spacewell brand in the Manage segment. The EPS rose nicely by 20.3% to EUR 0.36. On Page 5, you can see the distribution of our revenues in recurring and software licenses. Meanwhile, we have clearly more than 50% of our total sales in recurring revenues. We expect that this number will increase over the next quarters because of the smooth transition to subscription. Our revenues in subscription grew extremely strong with growth of 137% in the first half. This number was positively influenced by our acquired brand, Spacewell. End of first half, we have already more than 8% of our total sales in subscription. While we had a very strong growth in subscription, but the revenue recognition is extended over a long period, we also showed a growth of 8.6% in our licensed business over the first 6 months. That is in line with our expectations. The growth in Q2 in our license business looks a bit soft, but please have in mind that we have an extremely strong growth in Q2 last year, with more than 20%, and also a very strong Q1 2019 because of the BAU trades fair. On Page 6, I would like to mention some highlights about our progress towards internationalization. The U.S. remains a strong growing region with a growth rate of more than 30%. Also, Scandinavia continued with an extremely strong growth. The picture also shows that we have a balanced growth over the regions. Turning now to our segment overview on Page 7. The Build segment again achieved a strong revenue growth with around 29%. EBITDA margin was at high 32 -- 33.2%. Adjusted EBITDA margin without the effects of the IFRS 16 was slightly below last year at 29.9%. The Design segment recorded a revenue growth of 12% in the first half year. That is in line with the expectations. Q1 was the main driver, followed by a moderate Q2. Profitability increased strongly to an EBITDA margin of 27.7%. The Managed segment was significantly strengthened through the acquisition of Spacewell. That's why we saw an extremely strong growth of EUR 4.1 million to EUR 17.5 million. Spacewell contributed EUR 12.9 million so that organic growth was at 11.1%. Due to the acquisition costs and the below-average margin level at Spacewell, we saw in the first half year a low-margin of 6.9%. Adjusted for the acquisition-related costs, we would have seen an EBITDA margin of 15.4%. That is in line with our guidance. Revenue in the Media & Entertainment segment increased also nicely by 23.5%. In the second quarter, we saw already the contribution of Redshift of EUR 1 million. Organic growth was high at 16% in first half year. EBITDA margin was below last year because of acquisition-related costs and investments for future growth. Our cash conversion shown on Page 8 remains strong. Our cash conversion rate is on EBITDA on high 90.4%. The operating cash flow increased strongly by around 60%. This growth reflects the strong operating performance, but we also saw positive effects from IFRS 16 and some reporting date effects. Additionally, a onetime effect in the position change in other asset is included. That is related to the new headquarter building of Bluebeam. Cash flow from investing activity is mainly driven by our acquisitions, meaning Axxerion and Redshift. Cash flow from financing activities contains the dividend payment, the repayments of debts and new loans for our acquisitions. This development is leading us toward a net-debt situation of around EUR 90 million by the end of Q2 2019. This leads us to a very strong position to invest further organically and via acquisitions. As we come to the end of my presentation on Page 9, I would like to confirm that our strong double-digit growth will continue in the next quarters. With our first half year results, we have a strong basis to reach another record year in 2019. From today's perspective, and based on the current portfolio, we are planning revenues for 2019 within the range of EUR 540 million to EUR 550 million, which translates into a year-on-year growth of 17% to 19%. Taking our investments and the still below average EBITDA margin for the newly acquired brand, Spacewell, into consideration, group EBITDA margin for 2019 is expected to be between 27% and 29%, including IFRS 16. Thank you very much for your ongoing interest into the Nemetschek Group. I'm now happy to answer your questions.

Operator

We will now begin our question-and-answer session. [Operator Instructions] We've received our first question. It is from Gal Munda of Berenberg Capital Markets.

G
Gal Munda
Analyst

The first one is just around what you're seeing, if you can make a comment around the macro. We've been getting a lot of questions, especially on a global basis, we've seen kind of a very strong performance for you guys, specifically in the U.S., whereas Germany is kind of slightly weaker. Can you comment maybe by region what you're seeing? And considering your strong performance, it doesn't seem like the macro really is impacting you. So do you believe the AC industry today is a bit more protected by the fact that it's less penetrated so there's more structural growth in the industry? That's my first question.

P
Patrik Heider

Gal, thank you for the question. It's very early for you. Thank you for that. For the macro, we don't see any bigger impact at the moment for our business. As I always say that we are not completely de-linked to the macroeconomics, but take, for example, the normal construction indicators we have. So from that perspective, we normally would grow in Germany only a 1.5% to 2%, but we are growing high-single digit in Germany, which is in line with our guidance, and that means we are standing for another type to the business and that means digitalization to the value chain. And this is why we believe, together with the BIM regulations, which are taking place even tougher in 2020. By being then a hard law, we don't believe that we are so sensitive to the macroeconomics. Yes, we do see them as well. Take, for example, also Germany, at the moment. You can't expect, given our market leadership, but also given the economy situation in Germany that we go into the organic range of 13% to 15%. That would be unrealistic. But we see, for example, in the U.S., that's very interesting. It remains still the fastest-growing market for us, with more than 30%. What we also notice is that we are standing, with our portfolio, 75% into buildings and 25% into infrastructure. Infrastructure, meaning, for example, streets, building, air streets, bridges and tunnels, and those are normally state driven but they grow even a bit more than the buildings part. So the state investments are not going to be reduced somehow in those markets. And this is why we are still positive for the year, even despite the fact that the macro discussion we are also hearing, but that doesn't impact our portfolio too much. I hope that helps.

G
Gal Munda
Analyst

Perfect. Yes, that's very helpful. And then just as a follow-up. I think Q2 is the first quarter where the perpetual license is actually declined in constant currency. Can you please talk a bit more about the growth in subscription that's driving the overall growth of the business now? It's kind of exciting to see that shift happening. It must be more than a few brands now, right, more than just kind of organic growth of the acquired brands, which geographies and which brands are really picking up subscriptions. And maybe if you just comment what the pricing looks like when you kind of think about perpetual versus subscription offerings. So what's kind of the breakeven period for you guys to see the full benefit of that recurring revenue model.

P
Patrik Heider

Yes, of course. This first -- this -- how you phrased it, the first indicator in the license growth even declined a bit. To be honest, it should not be perceived as a change in the model transformation, not at all. Because in our view, it was on plan, in plan, because we -- and this is why I brought it into my speech as well, because we saw a tremendous good Q2, and that's not an excuse, but it needs to be explained, of course, and I think it's acceptable because last year, in license growth in Q2, we had more than 20%. And then we had this BAU in the Q1, and then you normally have those catch-up effects. And this is why in the overall H1 view, we are in line with our expectations. So that's what we never said that we go into the organic growth corridor with license, perpetual license grows as well. So 13% to 15% would be unrealistic, but high single digit is realistic for the year. So we've not at all seen, oh! Q2 is something warning or goes to a complete change, no. So this is the perpetual license. But positively said, you are right. Subscription in the recurring revenues grew nicely, but also via trend transparent communication, a huge part is coming from the acquisition of Spacewell. So the 3-digit percentage rate, which looks always very nice on a smaller base, is clearly around 60% when you take that one out. 60% in subscription is also nice for the portfolio. That means it's in higher traction. And here, also no news in the U.S. market maybe. And for the brand, as you know, we are having now 3.5% brands in full subscription. All the others are starting more or less in the hybrid models, but the 3.5% are mainly in the U.S. We get that subscription higher. So all in all, for us, no surprise in Q2. Yes, of course, it could be received as a change in model, but not at all because of the 2 given reasons.

Operator

We've received another question. It is from Andreas Wolf of Warburg Research.

A
Andreas Wolf
Research Analyst

It's Andreas Wolf, Warburg Research. I have 3, if I may. So the first one would be on the change to reimbursement of architects in Germany, the -- one of our outerknown architect. And obviously, the judges don't see it as compliance with EU regulation. Would you foresee any impact on your business resulting from a new reimbursement scheme for architects? The second would be on Deutsche Bank. Obviously, Deutsche Bank plans to or has to invest more than EUR 80 billion into its infrastructure. Could it somehow also have an impact on your business? I would assume positively. What's your view on that? I would assume more architecture offices would hire architects, et cetera. So maybe you could provide your view here. And then on the U.S. business, which is growing very nicely. Is it still your new solutions that you're bringing from, let's say, Germany and the concrete solutions that are being adopted? Or do we also see other effects here?

P
Patrik Heider

Yes, of course. Thank you very much for your questions. The first one, we are really proud of because we believe that we were an influence on that because sitting in all those committees, we always said that, that so-called famous [ Hawaii ], that's what you said. This is the regulation for architects. This is a burden to execute on BIM. So what we believe is this was a good signal for the market and -- but I would be now the manage [indiscernible] if I would now raise expectations that we would see [ Hugo state ] out of this development. So given our market position, except is exactly in the architectural market, I would say that, yes, that's positive for the overall BIM movement in Germany, but you should not expect from that move a higher growth in our portfolio, but it's positive. The Deutsche Bank is also positive. Of course, every investment is in somehow positive. But we would even see it more to the Build segment because, yes, it could have also what you said to architectural market in the Design segment, but we see it more to the Build segment when it comes to brands like Nevaris and Bluebeam. And here, we are also already participating. We are in those projects already involved. And every investment also in Germany is needed, especially when it comes to trains and all the other parts, and which is great for us, but more to the Build segment related. In the U.S., there are several factors why we are successful there. Definitely, I would say across all the regions, except the Manage segment. Yes, the Design segment is very nicely growing with profits in the home-based Vectorworks brand. And also, RISA is doing a great job. You remember, we bought them 2 years ago, and they are the market leader, what Scia is doing in the European base, and they are also a part of the subscription growth, and they are doing very well. Coming to the Build segment, no surprise for you. Also, Bluebeam remains a big contributor to the U.S. market. And going to Maxon, and you see the Maxon rate. And you know that Maxon already has a high share of more than 50% in the U.S. market, and we bought the Redshift organization as well and acquisition. So also, the M&E segment is contributing to the U.S., which is, in my view, positive but we are not depending only on one brand contributing to the [ U.S. ] business, but the broad range of portfolio is contributing to the U.S. [ Technical Difficulty ]

S
Stefanie Zimmermann

Operator, could you continue. Hello?

Operator

Mr. Jungfleisch, your line is now open.

M
Martin Jungfleisch
Junior Equity Research Analyst

I didn't get the notification. So I have 2 questions, if I may. The first on Bluebeam and the benefits from the last price increase has obviously faded a bit. Would you consider another price increase in this brand? Or does the environment not really an upward right now? And secondly, can you also comment a bit on the competition with Autodesk's PlanGrid brand, and how that has developed since the acquisition? And then finally, on Bluebeam, in terms of penetration levels, would you say that the U.S. market is now almost fully penetrated? And then in which markets do you still see the largest potential benefits for now on Bluebeam, then I'll go back in the queue.

P
Patrik Heider

Okay. Thank you very much for your question, Martin. And yes, for Bluebeam, the price increase so -- is 2 in a row, the year before and last year. And this one, as we stated, is flat down for this year. And we go to a guidance of around 20% in growth. And could we do another one on the actual product portfolio? Not. This is why we developed other opportunities in Bluebeam. And so the answer is no. To the competition, Autodesk's PlanGrid, no change, to be honest, in the first 6 months. I think they bought them before Christmas last year. No change. It's a highly competitive market. Not only Autodesk with PlanGrid, by the way. It's also Trimble with Viewpoint. It's Aconex -- Oracle with Aconex. It's also Procore in there. So it's a highly competitive market, but no changing in the dynamics here. For the U.S. market, obviously, Bluebeam went big for the first, beginning, in the U.S. market. I mean, when we bought them, you know that we had 98% in the U.S. market. Now they are into 92% of the big and large construction companies and contractors. Yes, they are even in all big entities, but they are still good growing in the U.S., but their main dimension of growth is obviously internationalization. And here it comes with a focus to Europe to the following countries, the Nordics, Scandinavia. And you saw it in my speech, Scandinavia is nicely growing. A high portion of that is definitely coming from Bluebeam as well. They have their headquarter in Sweden. It's the U.K., where BIM regulations is already fast progressing, and they are already in BIM level 3. So it's the best example of BIM execution in Europe. And they are also in DACH, especially in Germany. So they started last October in Germany as well, and we see good progress. Those are the focus areas in Europe. And then when we go outside Europe, they are interestingly nicely performing in Australia where we're also having Graphisoft and dRofus and Solibri there. So Australia and the Asia Pac region is a nice region to grow. Also, they are partly in Japan, but the higher focus would be within Australia. So this is around Bluebeam. Hope that helps.

M
Martin Jungfleisch
Junior Equity Research Analyst

Yes. And then as a -- I have a quick follow-up. I think one of your projects was also to target larger construction groups and also to some increased cross or cross-selling. Could you maybe provide an update on that, how that has developed since the Capital Market's Day last year?

P
Patrik Heider

Yes. Steady progress and it's in the Design segment, and I would say, most probably by the year-end toward the beginning of next year, we will have -- we will hear some market announcement.

Operator

The next question is from Knut Woller of Baader Bank.

K
Knut Woller
Analyst

Just a question getting back on the Build segment, Patrik. We have seen that growth slowed by 4 percentage points. You're still in line with around 20% slightly above that. What you're expecting after the price increase has not faded out. The decline in the margin of the Build segment, is that due to your investments in the CDE, for example, just to maintain the kind of growth rates in this region that you just cited? Then secondly, just getting back on the situation in Germany in the Design segment, I think you touched already on the 2 elements a bit. We have seen the BAU trade fair at the beginning of the year. We have had the good growth last year. So is -- are these the only reasons for the slower growth momentum, both in Germany and also in the Design segment? Or is that something -- or anything else we need to read into that here? And then lastly, on the operating cash flow. I think adjusted for IFRS 16, we have seen, I think, 48% growth, and you cited some other effects impacting the operating cash flow. Can you give us an idea of what the conversion rate you're expecting for the full year if these effects are balancing out over the course of the year, with the exception of IFRS 16, of course?

P
Patrik Heider

Thank you, Knut, for the questions. For the Build segment, definitely, this is what we said for the Bluebeam and the overall part of the Build segment, the general part. And the major part is coming from Bluebeam, no surprise, is definitely Bluebeam's are 18% to 20%. Around the 20% is reasonable for the year's perspective. In the margin part -- or let's raise one thing before. Also what you need to consider, and this is what we state also, we sometimes forget the smaller brand, Nevaris is performing very well here. So Nevaris is clearly above the average corridor of 13% to 15%. And this is great. Nevaris, years ago, it was, we call it, the problem brand, and it was really -- it's nicely growing, and they are the main competitor also to another German company, [ RRV ]. And this is really great, and they are also contributing well. And last year, we had the [ 1, 2, 3 ] first part into. And so we have also in the margin, slightly some inorganic impacts here. So nothing worrying, but yes, you are right. Also, part of it is Bluebeam is investing into Germany stronger. So nothing worrying for me. It's only a slight impact, but it's the investment for the future growth opportunities. To Germany, I wouldn't -- I would not, we, as a management would not read something into the German market. In the Design segment, given our market leadership with a more than 60% market leadership in that area, I would not read something else into this market. What we -- what our plans are definitely and with brands of Nevaris and Bluebeam, that's very helpful to grow further in the Build segment. Because there, we definitely don't have that market leadership as we have in the Design segment, and that will positively impact also of EBIT stable in the German market. So the idea is nothing read into the German market. The German market since years is not the most exploding market. I would appraise it like this. So it's around touching the double digit, but it's not more. And your last part to the conversion rate, you're absolutely right. I mean, we grow operational in line with the EBITDA by 30%. And yes, the EBITDA is impacted by IFRS 16. So this is the impact we saw, 30%, 30% fit. And then we only had one-off effect into where we, as always, transparent and reported it. We had a lot more contribution for the Bluebeam headquarters in the building where the landlord paid now something back, which was contractual agreed. But all in all, it doesn't impact the year-on-year guidance on a conversion rate. We would see it around the 85%, 80% to 85%. So we are really happy with the cash flow management as well and all the operations here, and we see it really positive, but no other impacts here.

Operator

The next question is from Chandramouli Sriraman of MainFirst.

C
Chandramouli Sriraman
Managing Director

So a couple of questions from me, Patrik. On the margins, you obviously had started the year quite well. Your guidance is still quite wide. Would you be able to qualify some -- give some qualifying comments on your guidance on EBITDA margins? And the second question is essentially on your Build margins, which have rocketed up. It's now at 34% on EBITDA. Are there some plans to increase investments here? These are -- obviously, business was underperforming the group. What do you think is the long-term margins of this business?

P
Patrik Heider

Yes. For the EBITDA margin, as you know, this year is a little bit complicated. It's not our fault. It's someone else who founded the IFRS 16. So the range was 25% to 27%. And then after, with the impacts of IFRS 16, it was 27% to 29%.You saw in Q2 a bit higher IFRS 16 impact. And this comes normally from the normal business activities. I mean there are new leasing contracts falling under the IFRS 16 consideration. So all in all, for the EBITDA guidance, you could definitely see that we see the guidance in -- up to the upper end of the guidance of 27% to 29%, that's realistic. So not in the middle, not down to the 27%. So you definitely would say that it's realistic to see ourselves in the year-end in the upper end. And then I'm hopefully sure that you meant the Build segment and not the Manage segment in the next question.

C
Chandramouli Sriraman
Managing Director

Yes, Build. Build. Sorry.

P
Patrik Heider

I would have been happy to see the 34 in the Manage segment, but you are right, in the Build segment. And in the Build segment, yes, of course, I mean, on the one hand side, as the CFO, I appreciate those margins. But on the other side, you're absolutely correct. And yes, there will be some investments. But on the other side, it's also nice to see that we scale the business. I mean, that was always a target as well with Bluebeam. When we bought them, they were around the 15% to 16%. And no surprise here as well with the large revenues and the size they are having, they are largely also contributing to the margin side. But yes, of course, we try to reinvest that into future growth opportunities. On the other side, we are not unhappy to take that margin, of course.

Operator

The next question is from Victoria Kruchevska of Commerzbank.

V
Victoria Kruchevska
Equity Analyst of Technology

I have a couple of questions in terms of -- well, first, talking about the subscription and licenses. If you can help sort of like provide us some better understanding in terms of the cannibalization impact from the -- from that conversion in this [sense] [indiscernible], kind of look at if fee licenses or if more customers would go for licenses instead of subscription, what would be the -- again what would be the growth rate? That will be my first question. The second question in terms of sort of like one-off positive impact from your trade fair and also price increase in the first quarter this year. Just also to have a better understanding what is the impact so we can track maybe better the growth rate per segment, and particularly in Design segment, also Build segment. And the very last question in terms of the visibility. I mean, how far in the future you can actually see your pipeline or your revenues and sales growing? I mean, looking at the first half of the year, we're having -- I mean, you're clearly above your guidance, which is 17% to 19%. Currently, you're around 24%. So do you think at one point, you would actually consider upgrading, raising your top line guidance? You have been telling in terms of the EBITDA margin that you see it at the upper end. But in terms of the top line, there is a clear, I guess, upside pressure on that side. Yes, that will be very helpful.

P
Patrik Heider

Thanks, Victoria, for the questions. The first one, I would say you can stretch the word cannibalization because it's not at all a cannibalization from perpetual license or subscription because as we -- as you know, that we have 3 full subscription brands. They are attracting new customers. And the perpetual license copy, again, this is what I answered, I think, in the second question -- in the second part of the question. This has nothing to do with a business model change. We had those effects from the last year. So the period of Q2 2018 was very strong with 21% in license growth. So an easy math would be take the 2 periods together, and you are in a healthy license mode. I know that the capital market does not want to hear it, that's the [problem] we are in today, but we see it as it is. And the Q1 was also with the trade fair of BAU. So this leads me to your second question, as fair you to see our performance as the half year results. Because here, you are seeing the different trends, which fits also to our guidance. So when you take, for example, the Design segment or starting with the license growth, as we say, the license growth will end in the year-end high single digit, 8% to 10% is realistic. The Design segment, I would say, as always stated, is realistic 10% to 12% in growth. The Build segment was down a bit, so around the 20%. The price increase now has still an impact, but it will flatten down of Bluebeam. And by the way, Bluebeam is the only one where we had those significant price increases. So all in all, to summarize the first 2 question, cannibalization, I wouldn't see there's this. We're going to have this hybrid model as a group outside, and we are benefiting in both roles, in license and in subscription from new customer gains. The positive impact for the Q1 to Q2, look at the H1 figures, and you see clearly a better picture than only looking to one quarter. And the last one, also what we've said to the margin side, it's also valued to the revenue side. We definitely will end up in the upper end of the guidance. But also, one thing I considered or we considered in the call was this huge currency impact, the EUR 7.5 million we had in H1. This will also flatten out a year to go, we see around about EUR 8 million in the revenue impact. So that's what we stated, Q3 and Q4 will be somehow flat in the currency impact, but nobody knows it from today's perspective. That's, yes, our perspective today, but we would consider, of course, to the next call, meaning September, September, October, if we do see that this will continue this positive trend, then we are also willing and able to operate.

Operator

The next question is from Nika Zimmermann of Deutsche Bank.

N
Nika Zimmermann
Research Associate

Congratulations on the results. My question, I have only one left. I think the other ones have already been answered by now. My question is about your organic growth guidance of 13% to 15%. If I'm correct, or correct me if I'm wrong. This refers to the 11.9% growth in Q2. Like how do you see this going forward? Do you expect this to go up again such that you reached the 13% to 15% guidance?

P
Patrik Heider

So you see everything correct, but also valid is the -- first of all, thank you for the question. I'm sorry. You see it absolutely correct. And -- but also related to the answer to Victoria, please see the first year, half year results. Q2 was there a bit weaker but we see it in line. We are at the moment, 14.5% roundabout in the organic growth. And we see it in the half year. That's exactly the corridor we're always stating, 13% to 15% organic growth. That's our organic corridor. And that one, it means, from your side, Q2, it needs to be going up a little bit again, yes. But we will remain within this corridor of 14% to 15%.

N
Nika Zimmermann
Research Associate

So where do you exactly see this acceleration kind of growth coming from in H2?

P
Patrik Heider

Yes. Acceleration, I wouldn't phrase it like this because when we see that -- also what I stated, the license world needs to be go up, and that's highly also through the Design segment. You could see also that in Q3 and Q4, we will end up a little bit higher in the Design segment. So the performance needs to come also highly from the Design segment. And this is from the license, which needs to be going up because H1, all in all, the license growth is in that area of the 8%, 8.5%, and currency adjusted a little bit deeper. And when we want to end between 8% to 10%, that means it comes also from the license part. And it doesn't mean a higher acceleration, but it means from the overall year, and the guidance is based on the overall year, we definitely see Q3 and Q4 here a little bit stronger.

Operator

The next question is from Robin Brass of Hauck & Aufhäuser.

R
Robin Brass
Equity Analyst

My one question is, I guess, the Manage segment. I guess, you're very confident here in this segment given all the acquisitions in the last month. But generally, what do you expect for this, essentially growth rate on organic base in the future for the segment? Do you think that also more than 20%, like in the Build segment could be achievable? Or is it a little bit too early to say? And the second question would be, do you have any time line when you might release a new midterm guidance?

P
Patrik Heider

Thank you, Robin, for the questions. Yes, the Manage segment, as we're stating this year, they will remain in that organic corridor of 13% to 15%, high contribution of Spacewell on the inorganic part. And yes, you are also right. That's what we always stated that this will be definitely going up higher than the organic growth corridor of 13% to 15%. And we see it in the high teens, realistic, 18% to 20%. And already next year, I guess that the guidance for this segment should be different. So this is why, first of all, acquisition effects, but also investments into these future growth opportunities are seen in the Manage segment. So next year, definitely, the margins should recover and the growth rate should be already a bit higher than the organic growth corridor. For the midterm guidance, we believe that in the beginning of next year, it makes sense. As you know that we went through a reorganization, and at the moment, into the segmentation to the segments, we call them divisions. And now we are dealing with those division strategies, et cetera, which makes sense and started very well. And this is what I believe it makes sense to have this new mid-term guidance on a sustainable base from each strategy by the beginning of next year, first half next year, it makes sense.

Operator

As there are no further questions, I will hand back to you.

P
Patrik Heider

Yes. Thank you very much for your interesting questions, for your interest into the Nemetschek Group. I wish you all a nice summer period. I'm looking forward to talk to you soon. All the best. Thank you.

Operator

Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.