Thomas Karlovits presented his in-depth investment thesis on RIB Software (Germany: RIB) at European Investing Summit 2017.
RIB is a German building and construction software vendor with a market capitalization of about EUR 750 million (EUR 150 million net cash), operating in the field of building information modeling, adding “time and cost” (“5D BIM”) to traditional 3D CAD software. The sector benefits from structural growth due to 1) the construction industry’s need to invest more in IT to correct massive historical underspending (causing productivity growth to lag other industries), and 2) EU regulatory changes taking effect in 2020 that require 5D BIM software for public buildings with the use of such software mandatory in Germany from 2020. Although still in the early stages, the BIM software market recently passed the point of inflection. We anticipate significant acceleration of growth going forward. Thanks to three major strategic steps last year, the management team has repositioned the company, and while investors have not given the company credit for this, industry participants already consider RIB a pioneer in modernizing the construction industry. At recent multiples of 14.5x EV to EBITDA and 5.6x EV to sales (both for 2017E), Thomas views RIB’s quotation as based on past assumptions and perspectives that are no longer valid. Read more.
About the instructor:
Thomas Karlovits founded Blackwall Capital in 2014, having worked in the equity research sector for over 23 years. From 2003 to 2014, Thomas was at Kepler Cheuvreux (Kepler Capital Markets prior to the takeover of Cheuvreux). Thomas most recently held the role of Head of European Equity Research from 2013, and was Deputy Head from 2007. During this time, Thomas was also in charge of investment strategy for the wider group. Between 2005 and 2007 Thomas headed the European Telecom sector. Thomas studied Business Administration and Economics at the University in Vienna.
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