Operating profit of DM 5.1 million during the first half of 2001 / Board reacts to yet another economic downturn in the construction industry.

Nemetschek AG Intensifies Restructuring Program and establishes the basis for future growth Operating profit of DM 5.1 million during the first half of 2001 / Board reacts to yet another economic downturn in the construction industry Nemetschek AG, one of the leading global IT companies for building design, construction and management, steps up its restructuring measures introduced early this year. Says Gerhardt Merkel, Nemetschek's Chairman of the Board since last January: "The market does not favor Nemetschek during the year of consolidation. That is one reason why our measures to lower cost and increase efficiency will not take effect as quickly as originally expected. That is why we are intensifying the Nemetschek Group's restructuring process."

These restructuring measures include a detailed inventory of the companies acquired within the last few years. According to Merkel: "Within the next few months, we will conduct an analysis of all subsidiaries to assess their synergies with the Group's overall activities as well as their future viability. Consequently, we may well consolidate our stakes in these companies or sell them off again. We will consider all of our options without restrictions." In July, Nemetschek already sold its 51% stake in the e-commerce company "Nemetschek direct GmbH".

In order to achieve higher market penetration, Nemetschek is aggressively implementing the Group's sales and marketing initiative. The goal is to build closer relationships with customers and to significantly increase revenue derived from reference and key account customer-based solution and project business, which currently accounts for about 20% of the Group's total sales.

According to Chairman of the Board Gerhardt Merkel: "Our market presence will be more active and we will focus our efforts on those business segments that generate strong sales and attractive margins." As part of the sales and marketing initiative, Nemetschek AG has assembled a new management team and filled three key positions at its Munich headquarters: As of last spring, Frank Wuschech (41) is the new sales manager for Germany, while Werner Maas (45) took over the position of international sales manager on June 1. As Nemetschek Group's marketing manager, Peter Kroyer (39) has been in charge of corporate marketing since August 1.

Cost management efforts are being intensified once again for the entire Group. As a result of this strategy, as well as the consolidation measures with respect to participating interests and the company's restructuring plans, the Group will cut an overall 150 jobs in 2001. As of June 30, 2001, Nemetschek Group employed 1,118 people, compared to 1,170 during the previous year (converted to full-time jobs, including Nemetschek North America).

First six months of 2001: A 6% sales increase

Nemetschek's sales revenue for the first half of 2001 was DM 128.3 million, a year-on-year increase of 6.1% (previous year: DM 121 million). This figure reflects the effects of consolidation, since revenue generated by Nemetschek North America in the amount of DM 14.8 million was included for the first time. Due to goodwill amortization, the effect on the overall result is DM –0.5 million. The good news was that the international percentage of total Group sales increased to 34% from 25% during the previous year.

The Architecture and Civil Engineering core business units in particular once again suffered the effects of reduced demand on the German market. The Facility & Real Estate Management business unit also performed below expectations during the first six months The subsidiaries Nemetschek North America, APSIS Software and MAXON Computer posted significant growth rates of about 80%, with combined sales of DM 25 million. During the second quarter, Nemetschek Group's sales revenue increased by 7.5% to DM 65 million (previous year: DM 60.4 million).

Totaling DM 5.1 million, group earnings before interest and taxes (EBIT) according to IAS accounting standards were lower than the previous year's figure (DM 14.2 million) and thus failed to meet planned projections. This was partly due to special expenditures amounting to DM 3.5 million that resulted from restructuring efforts. These expenses were higher than originally planned. After taxes and minority interests, results for the first half of this year amounted to KDM 129, compared to DM 5.2 million during the previous year.

All of the figures for the first half of 2001 include the results at equity for MYBAU AG, the subsidiary founded in May 2000, since Nemetschek now holds only 33% of the company's shares. The announced merger of MYBAU AG and Congate AG has been approved under merger-control regulations. The Board expects the merger to be entered in the commercial register in August.

EBIT for the second quarter amounted to DM 1.4 million, down from DM 6.6 million for the previous year. Reported results after taxes and minority interests will amount to DM –0.4 million, compared to a quarterly surplus of DM 2.7 million last year.

A solid balance sheet and good liquidity

As of June 30, the Group's balance sheet remains solid. Compared to the end of December 2000, the balance sheet total decreased by just under 2%, from DM 309.7 million to DM 304.4 million. At 72%, the equity capital ratio is quite comfortable (compared to 70% at the end of 2000). By mid-year, the Group's liquid capital amounted to DM 46.5 million (DM 55.7 million at the end of 2000), with financial obligation (short-term and long-term) of only DM 6.7 million (DM 7.9 million at the end of 2000).

Outlook: Measures will take full effect during 2002

The Nemetschek Group must compete in a market that has taken yet another downturn. Last spring, the German institute for economic research (Deutsches Institut für Wirtschaftsforschung) still predicted a 2.3% decrease in construction spending. This prediction was revised in July to a decrease of 5.4%. This development affects the investment decisions of Nemetschek customers.

Given the circumstances, Nemetschek Group expects a slight increase in sales for 2001 over the previous year. Given that software vendors are disproportionately vulnerable to the effects of sales fluctuations on profitability, the Group will not be able to meet its announced EBIT of DM 29 million. The revised prognosis predicts an EBIT value of around DM 10 million. According to Chairman of the Board Gerhardt Merkel: "The measures introduced to restructure Nemetschek AG are appropriate and will be stepped up. The full effect of these measures will take hold during the coming year."

Supervisory Board changes

Ms. Ingrid Nemetschek has voluntarily resigned her seat on the Supervisory Board, effective June 30, 2001. A new member has not been named yet.