Nemetschek SE

XETRA:NEM

Earnings Call Transcript 2021-Q3

[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, VP, Investor Relations, who will lead you through this conference? Please go ahead.

[Stefanie Zimmermann]

Perfect, and thank you, operator. Hello, everybody, and welcome to our conference call. Thank you for joining us to discuss the results for the third quarter and the first 9 months of 2021 results. 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 short presentation with the most important figures and strategic highlights. You will find the presentation, the quarterly report and press release on our Investor Relations website as well. But now let's get started. I would like to hand over to our spokesman, Axel Kaufmann, who will lead you through the presentation. So go ahead, Axel.

[Axel Jörg Kaufmann]

Thank you, Stefanie, and also from my side, a warm welcome to our today's earnings call of the third quarter of this fiscal year. As usual, as Stefanie said, we have prepared a short slide deck. Let me briefly walk you through so that we have sufficient time for the Q&A session afterwards. Starting with Page #3, here's an overview of the key figures of the third quarter. On a high level, a very successful development with a continuation of the trends we saw in the first half of the year, which is strong growth combined with high profitability. Our top line grew by almost 14%. Main growth drivers were once again our subscription and SaaS revenues with an increase of almost 50% on a currency adjusted basis. Based on this, we were able to increase the share of subscription and SaaS revenues to a new record high of 20%. The strong increase in profitability corresponds to a margin of more than 32%, 70 basis points expansion over the already high prior year figure. This was a function of the high level of revenues and improved efficiency as well as a healthy operating leverage. Our earnings per share, EPS, increased overproportionally by 36% to now $0.30 per share. Moving on to the next slide, #4, which illustrates our growth pattern over the last quarters. As we all remember, we felt the main impact of the pandemic in the second quarter of last year before our business picked up again very quickly and started the recovery that prolonged into and even accelerated this fiscal year. So on the next page, we show a summary of our key business highlights after the first 9 months. Despite a substantial foreign exchange headwind in the first half year, mainly stemming from a weaker U.S. dollar, we were able to achieve year-to-date revenues of EUR 494 million, a growth of 13%. On a currency-neutral consideration, we even grew by almost 16%. Besides the strong top line and margin increase, our cash conversion hit new heights with more than 100% conversion rate. As I do not want to focus only on our financial performance, I'd also like to highlight our various ongoing strategic initiatives, which continued successfully. First, our internationalization efforts, so bringing our established European brands to the U.S. and vice versa, which contributed to our growth. Second, and simultaneously, we continued to work on our solutions and the reduction of the group's complexity to make doing business with Nemetschek as easy as possible. Lastly, the ongoing growth of our subscription and SaaS offering underpin the success of the segment tailored strategy in which each segment's subscription strategy is based on its geographic exposure, the customer needs and their acceptance. Moving on to Page #6, where we see the entire picture of the development of our recurring revenues. The executive team is very pleased with the development. The chart on the left side, for example, shows the impressive multiyear development of this revenue category. While we started with a share of just 5% of total reps in 2018, we were able to gradually increase our subscription share from 9% to 15% and even 20%, as mentioned before of today. During the last year, we promised an acceleration on this, of which we're now delivering and there is more to come. And as a consequence, this drove the share of the entire recurring revenues to now be at 63% of total sales. On Page #7, we provide an overview of our most important P&L, balance sheet and cash flow position, once again focusing on cash as one lead indicator for the quality of our earnings. Operating cash flow increased overproportionally by 60%, driven by the strong increase in earnings and supported by an improvement in various working capital measures. Combined with the lower investments compared to last year, free cash flow, ex-M&A, increased even by 64%. Hence, we further improved the healthiness of our balance sheet, represented in important metrics such as the equity ratio, which is now at 52% compared to 45% last year and a net cash position of more than EUR 100 million. This extremely solid balance sheet, virtually no debt, provides us with a high degree of safety and flexibility to act going forward. On the next page, we deep dive into the individual divisions. Starting from the left side. Design recorded an increase in revenues of 7.6%, driven by a very strong subscription growth of 74% year-over-year. The EBITDA margin stayed on a similar high level like last quarter's. Please keep in mind that Design's margin in last year's third quarter was somewhat artificially high due to the cost savings measures we quickly implemented during the peak of the uncertainty caused by the pandemic. Moving on, our Build -- to our Build segment, which continued its strong growth momentum from the last quarter with almost 17% growth and a very high margin level. The largest contributor to this result was once again our largest brand, Bluebeam, which continued its strong growth in also new users. The continued success confirms the strategic decision to shift the start of the subscription and SaaS migration of Bluebeam into 2022. In our Manage segment, we saw a continued growth of almost 14%, but we were able to win new significant customers despite a still somewhat challenging market environment. And finally, our Media segment had a stellar quarter with record results in terms of growth, 37% year-over-year, as well as profitability. The segment with its major brand, Maxon, went through a very successful transformation over the last couple of years by many means, which is now paying off nicely. Let's turn to Slide #9, where we often talk about the close relationships we have with our customers. This is an integral part of Nemetschek's DNA and also one of our main strengths, in my opinion. All of this does not just happen by itself. Apart from hard work and a service-orientated mindset, it also requires meeting our customers on a regular basis. Due to the global COVID-19 pandemic, we had to pivot our approach to a more virtual one. The teams did a great job with several high profile events such as the Bluebeam XCON, Graphisoft Building Together conference and most recently, ALLPLAN Global Summit. Those are not substitutes but complementary actions to physical meetings, of course. Therefore, we're very happy that in the beginning of the fourth quarter, we picked up visiting in-person industry shows and trade fairs again, such as the upcoming BIM World MUNICH, which is more than -- with its more than 8,000 participants and where 10 Nemetschek brands will be present on site. As usual, and before we come to our outlook for the full financial year, let me briefly give you an update on the current state of our different end markets. This Page #11 summarizes the AEC segment, where it's fair to say the appealing situation has not materially changed in the recent weeks and months and that almost all lights are still on green regarding the current market environment as well as our future outlook. First, the residential sector continues to be very buoyant, mainly driven by the demand for homes in an environment of historically low interest rates. The same is true for the infrastructure market overall, where we see a very healthy demand situation at the moment, which is additionally supported by the various planned or already passed government investments such as major infrastructure programs. Some degree of uncertainty remains with a subcategory of commercial offices. We are seeing facility managers, for example, still acting a bit more cautiously with their investments while people are getting back to their offices gradually. So to summarize today's key points on the next page, I'd say Nemetschek reports a very successful first 9 months of the year 2021, which featured several strategic and operational highlights. Looking at the bigger picture, we can see that our long-term structural growth drivers, such as the low degree of digitization, increasing BIM regulations or the need for more energy-efficient and environmentally friendly construction are fully intact and offer substantial growth potential for the many years to come. That is why we're convinced that our strong market position, together with our product and our close customer relationships, will further support our growth. With this, concluding the presentation with an updated 2021 outlook on this page. As a result of our strong first 9 months of the year, intact long-term growth drivers, our strong operational business with a high proportion of better plannable revenues and its broad regional and market-related diversification, we're confident to reach the upper end of our previously increased guidance for this fiscal year. Our assessment is based on the assumption that there will be no material deterioration in the economic conditions in the fourth quarter and that the COVID pandemic will continue to be under control. Rest assured that we will continue to monitor the situation very closely and that Nemetschek is well prepared to act swiftly and decisively should the situation change. And with that, I'd like to thank you for your attention during today's call. And we're happy now to take any of your questions. So operator, please, back to you.

[Operator]

[Operator Instructions] The first question is from Chandramouli Sriraman from Stifel.

[Chandramouli Sriraman, Managing Director]

Just a couple of questions from my side. Design growth slowed a bit. I was just wondering if there are any timing issues. I did notice that you mentioned that subscription picked up. Are you seeing a trend here? Or is it too early to draw a line there? Number two is, Bluebeam transition, are we still on for 2022? The demand seems to be quite strong even in Q3. Would you reconsider postponing this? Or are you quite clear that the transition is going to happen next year?

[Axel Jörg Kaufmann]

Yes. Thank you, Chandra, for both of your, I think, very good questions. First of all, let me talk about Design a little bit. As a matter of fact, no, there's no reconsideration or any change in prospectus going forward, positive sentiment that we have on this segment and the division. There's a couple of things maybe to be noted. First of all, we would have seen some people just taking a bit of vacation, probably well deserved, during the August, September, especially in the DACH region, remembering that our Design business is more a European center than maybe with competitors in a prolonged holiday season. And that has led to less people being active. I think that was notably seen both in our own company and other companies with customers. It doesn't mean that, overall, the activity out there and the project, mid and long term, is somewhat seen differently. So definitely structural, I have no doubt be positive about this, and we shouldn't overinterpret, I'd say, one quarter even also if I just look at how the fourth quarter really has started. I'm glad you picked up the strong subscription growth there, which naturally will encounter, right, slight shift here from perpetual, maybe even some from some maintenance contracts going into the subscription, which -- you know that we go through the space approach, and I'm happy to see Design actually moving in that direction finally now after years of very careful considerations and testing and preparations. So that, I think, is just too little elements of maybe an explanation there, notwithstanding the comparables, of course, that you might remember also from the last year when Q2 was certainly a somewhat easier one to be given the sharp decline that we were facing last year. So altogether, positive, absolutely, and no reason to change any of our positive minds here going forward. The same, by the way, for your second part of the question, if I can just say loud and clearly that yes, Bluebeam will continue to prepare very precisely and very professionally the shift from perpetual to subscription. Everything is on track. The team is very motivated. We'll figure out the perfect or best timing really during the next few months. We're back now sitting around the table, analyzing, and business is on an all-time high in terms of the user growth, as you were saying yourself. And that, I think, the very positive one here that whenever we really start launching that then -- which will happen next year, once again, to underline that. We're starting probably from the highest level ever in terms of the installed base and the customer usage, and I think that's a very, very strong position to come from going in such a transition.

[Chandramouli Sriraman, Managing Director]

Great. maybe a quick question on multimedia. It's performing very well. I'm just wondering, it's now almost 1/4 of a much larger build. How should we look at multimedia, your competitive position and more medium-term growth in this space?

[Axel Jörg Kaufmann]

Yes. Thank you very much for the follow-up question. I think we're very proud of what got accomplished there in the last couple of years, thinking that this was kind of the fifth wheel, and we were only minority kind of invested in this one. So all the steps that I think the company has taken there were strategically going in the right direction. The integration was certainly not an easy one, to have various balls in the air. It really pays off very nicely. I think we have built, and that we can say today, we have built a significant player that you should think of kind of another almost separate, very appealing, interesting story, which we will, again, not let -- lose focus from the AEC core business that we're engaged and have a strong position there. But I think we're ramping up something that could be really something big. And we're willing to continue to invest in that business and also talk a bit more about that, which you might have noted we did recently, as requested by many of you for many years. But we first wanted to get some of the homework done before we would go out there and disclose a bit more of our thinking and the outlook. So there's more to come, and I think all reasons to be quite positive on this one.

[Operator]

The next question is from Sven Merkt, Barclays.

[Sven Denis Merkt, Equity Research Analyst]

The first one is just on the guidance. If I look at the high end, it obviously implies now for Q4 just about high single-digit growth, which looks pretty conservative to me. Are there any reasons why growth should slow down sequentially? And then secondly, it was good to hear that the rationalization of the business is progressing well. I'm just wondering what your plans are around that next year. Are you giving internationalization a further push, given that it was probably a bit more difficult to do that over the last 2 years?

[Axel Jörg Kaufmann]

Thank you, Sven. I was just writing down your second part of the question. I hope I caught this. So yes, thanks for the remark on the overall guidance in the Q4. I mean, first of all, let's see that we wouldn't say that slow necessarily would slow down. I think that's an interpretation. Well, my personal view is that a double-digit growth really, in Q4, so being very confident to reach the 40%, almost at minimum, right? So that's going to close a very successful year overall. And the comparables, of course, need to be taken into consideration. So I think when we look at individual single quarters, let's not forget about the long-term trend and how we would overall close this year. .The second part of your question regarding 2022. I think all of those activities that we were having seen in this regard are going to continue. I wouldn't see any of them dropping down that proved us right from the aspect that you mentioned, internationalization, for example, to some of the segment strategies that we shared with you. That's going to continue. We're not done yet. I think there's, again, more to come. That's going to mean some work. But again, it proves us right that we can do that, and we'll march on.

[Sven Denis Merkt, Equity Research Analyst]

Yes. I didn't want to imply that you would slow down or stop that. I would just ask if there's an opportunity to essentially accelerate a bit internationalization of if travel reopens next year.

[Axel Jörg Kaufmann]

Yes. Thank you. I mean we're going both directions across the Atlantic, we could say. And again, I think Design is making great progress currently in some of the pockets of the business and brands going to the U.S. We're certainly -- we're not the incumbent, but we're the challenger, and that's also an appealing position. And I'm seeing the numbers, and I'm actually pleased by them. But we're also going the other direction. We've invested into, for example, an installed team here across Europe in various places, most recently in the DACH region for the Bluebeam organization. And we're seeing significant wins that make us -- enable us to reach a critical mass and also some good showcases. So yes, that's part of the growth as the last few quarters as well, and we're actually committed to let this continue that way because I think this is the complementary growth that gets us become more international.

[Operator]

The next question is from Florian Treisch, ODDO BHF.

[Florian Treisch, Analyst]

Two left on my side. So the first one is on the cost base. So you mentioned now looking into Q4, you would see big fairs in critical form again. You are still only seeing below 3% employee growth year-over-year in Q3, so probably clearly below a typical run rate for you. So what is probably your best guess for the coming quarters? Will we kind of finally really see a nice acceleration in OpEx levels? And the second part is, as you mentioned, now above EUR 100 million net cash, so probably not a bank collecting money. So what can you do with that? Is there any change in kind of more aggressive M&A willing to pay higher multiples and so on?

[Axel Jörg Kaufmann]

Thank you, Florian, for the 2 questions. So first of all, I don't think we'll see a dramatic change in the OpEx levels overall, just comparing month after month, but we'll see a gradual one. So here is a commitment to go out there to the customers to spend time as you say, on fairs to recruit people, to hire, to increase the staff because we know that there is a burden on the existing organization. We know that we're operating in a top labor and job market out there. But I think we're a very attractive address to attract talent and will continue, and the intent and the ambition is clearly there. So those would be the main categories of OpEx growth. No doubt that we would have seen that already in the last couple of weeks and months, and we'll continue to see that, but not, well, completely drastic. I think more sequentially really quarter-over-quarter in a well-managed way. That's definitely the commitment. Second, you're right, there's a firepower that we ought to use but only if it's really right, right? So I don't think we were ever shy in paying the right multiple for the right assets of good quality. We're having our radar screen spend. We have start-ups that we would have invested. We have the own organization that we would invest. We have a few medium-sized things that we currently are finding ourselves in diligence. But again, as I said over the last 2 quarters, in this kind of environment, you may want to be well advised, in my opinion, to be carefully looking at things twice rather than just break something over the knee as we like to see. So M&A remains -- be it M&A, be it start-ups, remains a complementary area to invest. That's what we are planning to use the firepower for, and I'm positive that there's going to be one or other announcement in those regards going forward.

[Operator]

The next question is from Knut Woller, Baader Bank.

[Knut Woller, Analyst]

Also a couple of questions from my side. First, looking at the recurring revenues. We saw after a pretty slow start reflecting the license momentum last year that maintenance picked up now in the third quarter. So adding all the moving parts together, is it fair to assume that the recurring growth should continue to accelerate going into 2022? The second question on the margin. I know you provided guidance at the beginning of the year, but it looks like you're now ahead of your already raised margin targets, understanding the shift to subscriptions next year, understanding that it will be a burden to margins. But is it fair to assume that we should be roughly in the same margin range, probably not at the high end next year, but the same margin range as this year? And the last question on the Ambition 2023. I didn't find any reiteration here in the presentation. When will you provide us with a new likely longer-term ambition?

[Axel Jörg Kaufmann]

Yes. Thank you very much, Knut, for the 3 questions. I think the second and the third one almost I'd like to answer in a combined way. But let me first comment on the recurring. I think it's good, like you noted, to see that the part that is probably the most attractive one within the recurring category, as we have defined it for many years, which is the subscription and the SaaS revenue, that is growing overproportionally very nicely. And we know why we do it for many reasons. It lands well with the customers. We see a greater level of demand there. It is a stickier part in the customer relationship and also allows us to position and price the product adequately. So many good reasons to drive that category with a clear focus on it, notwithstanding that there's other categories within there. So yes, why would we not see a slightly increasing overall portion of the recurring from the total revenues. But the area where I would like to draw your attention to the most is really the subscription and the SaaS because that is where the management is really putting the greatest degree and level of focus on currently, given our conviction that this is making the most sense. And you've seen the numbers, and there's actually a nice delivery on the previously made promises, when we got to know each other first and just remembering last year, for example. Then on your margin question as well as on the '22/'23 question. I think it'd be fair to say it's a bit too early, and we'll come out in the first quarter with a clear guidance as usual. I think it's good practice here at the Nemetschek Group that with the full year 2021 results, we educate you and guide you more into what we would see for the coming years, not just right now already. But as we can say today, you may remember the last time we gave a multiyear guidance over a 3-year period, I think it was in spring this year. And to me, there's no reason to believe that this -- does no longer stand. We're completely committed, and we believe that this is definitely still achievable overall when it comes to the big picture and the key parameters. Your specific question about the margin and the level of profitability next year compared to this year, I would say that, again, that belongs into a category where we have to make the math still, and we wouldn't disclose our entire thinking. At this point of time, I'd be surprised if the aspect from one of the previous questions that we would continue to invest into the business and do things that we weren't able to do over the last 18 months as well as the change to subscription, regardless when the timing will be, but there's going to be a small impact definitely. Altogether, those ones are going against us, but luckily coming from a very high attractive level. So again, also there is no reason to believe that our view would have changed completely. But please give us the opportunity and respect that we would continue with a good practice coming out there in a few months from now.

[Operator]

The next question is from David Vignon, Bryan Garnier.

[David Vignon, Research Analyst]

Excellent. Two questions on my side. The first is, could you give us a bit of insight into the growth of Build and most particularly Bluebeam in the different regions, Europe and APAC, helping in sustaining the high growth rate? And the second question is, is the quarter-on-quarter growth pace of subscription revenue has been accelerating in the past 3 quarters. You've moved from 5% quarter-on-quarter growth in Q1 to 14% in Q3. Should we expect this to continue to accelerate next quarter and also in 2022?

[Axel Jörg Kaufmann]

Yes. Thank you, and [Foreign Language], David. Thank you very much for both of the questions. Let me start with Bluebeam. I think it's an excellent question to just highlight once again, as I try to answer in one of the earlier questions already, that the international growth does definitely contribute nicely to pay back some of the investments that we have made in the infrastructure. We're talking international, and this is not only Scandinavia and traditionally the U.K., but also parts of Asia as well as then DACH. So we look at the year-to-date growth in the U.S., and I think it's fair to say that the international growth was overproportionally contributing to the overall result. But very interesting that there's not a big difference altogether. The reason that I'd like to point out here is the DACH region, just to give you one number with 25% of a growth. And that is fantastic because that shows that we're now finally hitting a critical mass of a level of where there's more noise created, more customers getting wind of it, and that is to be continued overall. I wouldn't pin it down to just one individual regions of the ones that I mentioned. But overall, as part of your question, let me ensure you that, yes, there's going to be a strong focus on both to defend and continue to grow the local home market as well as the internationalization, which currently is growing overproportionally.And the same, I think, is true for your second part of the question, which is the subscription and SaaS. And again, thanks for noting the achievements in the last 2 to 3 years. And I think that all of you can really see that this has become a major focus topic. But we do it in a phased approach. We do it in a segment tailored approach. We don't want to afford neither for customers, nor investors or shareholders that drastic move because we don't think it would make sense given our business model, our geographic footprint for the customers. So you may want to start preparing all of the products to be ready. You may want to continue to explain to the customers the value in what they could do with a subscription over a perpetual, try to position the product and its sub features in the right way. And then go region by region, brand by brand, sometimes in a parallel, in a dual mode and have a strong focus on -- continue driving that. And I think you've seen that in the numbers, and you will continue to see that in the numbers committed.

[Operator]

The next question is from the [indiscernible], Berenberg.

[Unknown Analyst]

Congrats on a solid quarter. I'd probably just start off with a question on Bluebeam. Now that you've confirmed the transition to begin in 2022, I was wondering if you could share some insights into how we should think about the time line of the overall transition, especially with regards to the impact we will see in the financials.

[Axel Jörg Kaufmann]

Yes. Thank you very much. And again, also on the nice comment on the successful third quarter. We indeed are happy to see that the current product offering of Bluebeam is getting such great feedback from the market. Obviously, also a very booming and very good market environment. We are committed to start the transition again with the exact timing still to be nailed down, probably more likely to happen in the second half when it comes to the financials as part of your questions. The overall transition -- of course, any transition in the time line looks a little bit different, and we cannot precisely forecast and then dictate it because, again, our customer-centric approach requires that we do that together with the customers and also for the customers. And that's what we're currently exploring. But I would say it's fair to say that the majority of that transition to be seen in the financials should be within -- seen in a time period of 24 months. I think that overall is the time frame that we have analyzed so far, given several parameters, and again, appreciating this is a complex transition and transformation, if you want so.

[Unknown Analyst]

That's really helpful. I got 2 more follow-up -- well, 3 more questions, if I may. First one on the margins, we've had a very strong performance in terms of EBITDA margin this year so far. And I was wondering, if we look back a couple of quarters back, we talked about how the margin improvement were helped by some delays in costs not coming back in terms of the hirings that you hadn't been able to quite as bit as you would have liked to. So would you be able to quantify how much of the margin improvement is driven by these cost savings? And then how much of it is driven by the structural and operational improvements?

[Axel Jörg Kaufmann]

Thank you very much. I guess we're talking about today's situation. And again, coming back to the earlier question going forward, I think that remains yet to be seen. But clearly, we have estimated in our previous discussions and calls the amount of the so-called unforced savings because we couldn't do the things that we wanted to do in a mid-single-digit million magnitude, roughly. There's probably another part of that in a similar magnitude that we could call what you called, I think, the operational improvements there. And again, we're intending to do more on the first section, if we could, which it looks like we're able to bring people on board and we're able to go out there and be with the customers. So that, I think, an investment that will make for the sake of the future business. But that's roughly how I would quantify.

[Unknown Analyst]

That was really helpful. And last question. On the international expansions, you mentioned about Bluebeam introduction into the European regions. Any other brands that we should be aware of with regards to this expansion?

[Axel Jörg Kaufmann]

Well, yes, thank you. I think it, again, reminds me of always thinking in both directions. I think there is a brand within the design, for example, area. And I just mentioned Graphisoft, for example, and we've recently combined the SDS2 steel business with the Allplan business, has become a stronger player also, but not exclusively in the U.S. market. So I think it goes both directions. The Bluebeam example is probably the largest one coming from the U.S. and seeing a great deal of potential outside the U.S. in other territories.But again, the Design brands are a good example. Manage as well where we see a European more centric historical installed base of users that offers the opportunity to go out there, for example, to the North American market. So we think of those ones and we look at the numbers, and they're contributing nicely to that equally as much the Bluebeam example landing well in Europe these days.

[Operator]

Your next question is from George Webb, Morgan Stanley.

[George W Webb, Equity Analyst]

I have just a couple of follow-ups left. Firstly, just coming back on to the kind of midterm targets to accelerate to mid-teens growth by 2023. I think you're indicating in that high single-digit growth for 2022. I guess a big element of both of those assumptions was predicated on Bluebeam transitioning in the second half of 2021, which is perhaps now [ 28 to '22 ]. Do those targets just mechanically shift back slightly? Is that how we should be thinking about that at all? And then secondly, on Media & Entertainment, 2 parts. Firstly, just given the very high rate of growth you've seen, what sort of growth are you expecting within your guidance for Q4 just on Media & Entertainment? And then on the EBITDA margin, it looks like it's been high 13% percent year-to-date and actually quite a lot of investments gone into there in the last few years, even if a big chunk of that was inorganic. Is that level of margin sustainable when you think about that 15% to 20% growth ambition you have in the next few years?

[Axel Jörg Kaufmann]

Thank you, George, and it almost feels like you have given part of the answer to one of the questions yourself. So let me try to repeat this because I tend to agree with many things that you said. Although on the Bluebeam, let me start with this one maybe. The Bluebeam transition, yes, we postponed it because of the great level of feedback and the high pressure on the organization currently, so that we want really to take advantage of the -- and grab as much share as possible in the current core market, which is, for example, the U.S. .No, you'd be surprised, but I don't think at this point, we can already say that our ambitions for 2022 and '23 would have changed dramatically because we're seeing really a nice business overall. And yes, maybe it makes it a little bit tougher, but the ambition is there and the ingredients, I think, are there. So we're still committed to those ones, and we consider them definitely achievable. And overall, give us a bit more time to fine-tune this and come out again as good practice in the course of the first quarter when we give the guidance for next year, but then also try to update as good as we can by then the midterm outlook. So that's rather, I would say, a positive and trying to compensate maybe something that you indicate there. Similar on Media, I think the numbers that you were quantifying is, to me, rather to be seen on the higher end of that band. So the 10% to 15% that you mention, I'd like to see the unit producing a 15% growth. And I think it's doable given the explosion of the 3D really content and the lots of activities that we see in the multimedia space there currently, and we're really well positioned. And I think we've prepared this to really well to become a significant player there. So that's overall my midterm kind of ambition, and I think that is feasible. Again, too early to give precise guidance for the group for next year going forward or even 1 level further down on the divisional level, but that would be my ad hoc reaction, right? So on the fourth quarter, I think that will, for this year, continue to be an attractive level and conclude a super successful quarter. By the way, not only in terms of financials, and I'm saying this not oftenly enough because we haven't done this as a Nemetschek group too oftenly because of also the lots of great work that the team did in terms of the integration, the organization, the pricing, the solutions, the web shore -- store, the channel consolidation, everything was turned really from formerly 3 companies to become now 1 player, and you see what the results could be, right? So that, to me, is not to be forgotten.

[Operator]

So far, we have no further questions. I would like to turn back the conference to you, speakers.

[Stefanie Zimmermann]

So if there are no further question, we will conclude the call. Thank you all for your participation. Talk to you soon, hopefully, and have a nice day. Thank you very much.

[Axel Jörg Kaufmann]

Thank you, everyone. Bye-bye. .

[Stefanie Zimmermann]

Bye.

[Operator]

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