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Dassault Systèmes Reports 18% Increase in New Licenses Revenue in Constant Currencies

PARIS — (BUSINESS WIRE) — April 25, 2012 — Regulatory News:

Dassault Systèmes (Paris: DSY) (Euronext Paris: #13065, DSY.PA), reports IFRS unaudited financial results for the first quarter ended March 31, 2012. These results were reviewed by the Company’s Board of Directors on April 25, 2012.

Summary Highlights
(unaudited)

2012 First Quarter Financial Summary

(unaudited)

 

In millions of Euros, except per share data

     

IFRS

      Non-IFRS
                Change       Change in cc*               Change       Change in cc*
Q1 Total Revenue       462.4       13%       10%       462.4       13%       10%
Q1 Software Revenue      

419.9

      13%       10%       419.9       13%       10%
Q1 EPS       0.58       14%               0.71       13%        
Q1 Operating Margin       22.9%                       29.3%                

*In constant currencies.

 

“Our established PLM business continues to strongly progress as evidenced by new licenses revenue growth in our key brands such as ENOVIA. As announced last quarter, we are ready to pioneer the world of Information Technology to the next level: 3DExperience, as our clients are in the business of creating the best consumer experience,” commented Bernard Charlès, Dassault Systèmes President and Chief Executive Officer.

“Furthering our purpose to provide 3D experiences capable of harmonizing products, nature and life, we are announcing today plans to expand our 3DExperience platform to the world of nature with the creation of a new brand, GEOVIA, to model and simulate our planet. A first important step is the planned acquisition of Gemcom, a global leader in mining industry software solutions. Together, our goal is to help natural resources companies increase their innovation in critical areas including predictability, efficiency, safety and sustainability.”

 
First Quarter Financial Summary

(unaudited)

 
In millions of Euros       IFRS       Non-IFRS
        Q1 2012       Q1 2011       Change in cc*       Q1 2012       Q1 2011       Change in cc*
Total Revenue       462.4       409.5       10%       462.4       409.9       10%
Software Revenue       419.9       372.2       10%       419.9       372.6       10%
Services and other Revenue       42.5       37.3       11%       42.5       37.3       11%
                                                 
PLM software Revenue       321.5       288.1       9%       321.5       288.5       9%
SolidWorks software Revenue       98.4       84.1       13%       98.4       84.1       13%
                                                 
Americas       126.4       112.7       8%       126.4       112.8       8%
Europe       204.1       186.8       8%       204.1       186.8       8%
Asia       131.9       110.0       15%       131.9       110.3       15%

*In constant currencies.

Cash Flow and Other Financial Highlights

Net operating cash flow increased to €166 million in the 2012 first quarter, compared to €134 million in the year-ago first quarter, reflecting principally growth in net income and a working capital improvement.

In the 2012 first quarter, the Company received cash of €33 million for stock options exercised, made additions to property, equipment and intangibles of €14 million and completed cash acquisitions and other investing activities of €23 million, net of cash acquired.

The Company’s net financial position, comprised of cash, cash equivalents and short-term investments less long-term debt and less the €200 million debt which has become short term as of December 31, 2011, was €1.29 billion at March 31, 2012, compared to a net financial position of €1.15 billion at December 31, 2011. At March 31, 2012 compared to December 31, 2011, the Company’s cash, cash equivalents and short-term investments totaled €1.56 billion compared to €1.42 billion and total debt was €292.7 million compared to €301.3 million.

Cash Dividend Recommendation and Annual Shareholders’ Meeting Date

The Board of Directors has scheduled the Annual Shareholders’ Meeting for June 7, 2012 and is recommending a 30% increase in the annual cash dividend per share equivalent to €0.70 per share for the fiscal year ended December 31, 2011, compared to €0.54 per share for the fiscal year ended December 31, 2010. The dividend is subject to approval by shareholders at the Annual Shareholders’ Meeting. Since 2009, the Company has raised its annual cash dividend per share by 52%.

Summary Business, Technology and Corporate Highlights

PSA Peugeot Citroën improves powertrain digital manufacturing efficiency with Dassault Systèmes solutions. On February 16th, Dassault Systèmes announced that PSA Peugeot Citroën has deployed DELMIA in its powertrain division, extending Dassault Systèmes’ footprint in the digital manufacturing domain. Replacing solutions from the competition, DELMIA now supports assembly simulation, painting, factory layout, stamping and powertrain. PSA Peugeot Citroën works with the same tools and methodologies in all major departments of the group.

As announced in a separate press release today, Dassault Systèmes has created a new brand, GEOVIA, which aims to model and simulate the planet. As a first step in this initiative, Dassault Systèmes and Gemcom Software International, a leading software company in the mining industry, signed a definitive agreement pursuant to which Dassault Systèmes will acquire Gemcom Software International for cash consideration of approximately USD360 million. The completion of the acquisition is subject to normal closing conditions, including regulatory approvals. The transaction is expected to be completed in July 2012. Gemcom should be accretive to Dassault Systèmes non-IFRS earnings and neutral to its non-IFRS operating margin.

Other Corporate Information

On March 29, 2012, Dassault Systèmes filed its 2011 Document de référence with the French Autorité des marchés financiers. The 2011 Document de référence as well as an English language translation of this document are available on the Company’s website.

On June 15, 2012, Dassault Systèmes will organize on its Vélizy Campus its Capital Markets Day. The event will be webcasted and available for replay on the Company’s website following completion of the event.

Business Outlook

Thibault de Tersant, Senior Executive Vice President and CFO, commented, “Our very healthy new licenses revenue results benefited from our industry and geographic diversification strategies. During the first quarter, we saw broad growth across new industries and a strong dynamic in high growth countries.

Looking ahead, we anticipate a continued good trend in the second quarter. With respect to the second half of 2012, while we remain optimistic on our business, we believe it is appropriate to maintain our cautious stance given the volatility of the economic environment. Therefore, we are updating our 2012 fiscal year financial objectives for the full amount of the first quarter over-performance, and are updating our currency assumptions. We are leaving unchanged our underlying revenue growth assumptions in constant currencies for the remainder of the year in total.

We will incorporate Gemcom in our financial objectives closer to the anticipated time of completion of the acquisition, which is expected to occur in July. Based upon its revenue growth and profitability, we anticipate Gemcom will be accretive to our non-IFRS earnings as well as having a neutral impact on our non-IFRS operating margin.”

The Company’s updated 2012 financial objectives are as follows:

The Company’s objectives are prepared and communicated only on a non-IFRS basis and are subject to the cautionary statement set forth below.

The non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2012 currency exchange rates above: share-based compensation expense estimated at approximately €20 million for 2012 and amortization of acquired intangibles estimated at approximately €84 million for 2012. The above objectives do not include any impact from other operating income and expense, net, principally comprised of acquisition, integration and restructuring expenses of €2 million in the 2012 first quarter. These estimates do not include any new stock option or share grants, or any new acquisitions or restructurings completed after April 26, 2012.

Today’s Webcast and Conference Call Information

Today, Thursday, April 26, 2012, Dassault Systèmes will first host a meeting in London, which will be simultaneously webcasted at 8:30 AM London time/9:30 AM Paris time and will then host a conference call at 9:00 AM New York time/ 2:00 PM London time/3:00 PM Paris time. The webcasted meeting and conference call will be available via the Internet by accessing http://www.3ds.com/company/finance/. Please go to the website at least 15 minutes prior to the webcast or conference call to register, download and install any necessary audio software. The webcast and conference call will be archived for 30 days.

Additional investor information can be accessed at http://www.3ds.com/company/finance/ or by calling Dassault Systèmes’ Investor Relations at 33.1.61.62.69.24.

2012 Key Investor Relations Events

Annual Shareholders’ Meeting, June 7, 2012
Capital Markets Day, June 15, 2012
Second Quarter Earnings, July 26, 2012
Third Quarter Earnings, October 25, 2012

Forward-looking Information

Statements herein that are not historical facts but express expectations or objectives for the future, including but not limited to statements regarding the Company’s non-IFRS financial performance objectives, are forward-looking statements.

Such forward-looking statements are based on Dassault Systèmes management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results or performances may differ materially from those in such statements due to a range of factors. If global economic and business conditions continue to be volatile or deteriorate, the Company’s business results may not develop as currently anticipated and may decline below their earlier levels for an extended period of time. Furthermore, due to factors affecting sales of the Company’s products and services, there may be a substantial time lag between any change in global economic and business conditions and its impact on the Company’s business results.

In preparing such forward-looking statements, the Company has in particular assumed an average U.S. dollar to euro exchange rate of US$1.36 per €1.00 and an average Japanese yen to euro exchange rate of JPY115 to €1.00 for the 2012 second quarter; for 2012, the Company has assumed an average U.S. dollar to euro exchange rate of US$1.35 per €1.00 and an average Japanese yen to euro exchange rate of JPY112 to €1.00; however, currency values fluctuate, and the Company’s results of operations may be significantly affected by changes in exchange rates. The Company’s actual results or performance may also be materially negatively affected by changes in the current global economic context, difficulties or adverse changes affecting its partners or its relationships with its partners, changes in exchange rates, new product developments, and technological changes; errors or defects in its products; growth in market share by its competitors; and the realization of any risks related to the integration of any newly acquired company and internal reorganizations. Unfavorable changes in any of the above or other factors described in the Company’s regulatory reports, including the 2011 Document de référence, which was filed with the French Autorité des marchés financiers (AMF) on March 29, 2012, could materially affect the Company’s financial position or results of operations.

Non-IFRS Financial Information

Readers are cautioned that the supplemental non-IFRS information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRS measurements. Also, the Company’s supplemental non-IFRS financial information may not be comparable to similarly titled non-IFRS measures used by other companies. Further specific limitations for individual non-IFRS measures, and the reasons for presenting non-IFRS financial information, are set forth in the Company’s annual report for the year ended December 31, 2011 included in the Company’s 2011 Document de référence filed with the AMF on March 29, 2012.

In the tables accompanying this press release the Company sets forth its supplemental non-IFRS figures for revenue, operating income, operating margin, net income and diluted earnings per share, which exclude the effect of adjusting the carrying value of acquired companies’ deferred revenue, stock-based compensation expense, the expenses for the amortization of acquired intangible assets, other income and expense, net, certain one-time items included in financial revenue and other, net, and the income tax effect of the non-IFRS adjustments. The tables also set forth the most comparable IFRS financial measure and reconciliations of this information with non-IFRS information.

Information in Constant Currencies

When the Company believes it would be helpful for understanding trends in its business, the Company provides percentage increases or decreases in its revenue (in both IFRS as well as non-IFRS) to eliminate the effect of changes in currency values, particularly the U.S. dollar and the Japanese yen, relative to the euro. When trend information is expressed herein "in constant currencies", the results of the "prior" period have first been recalculated using the average exchange rates of the comparable period in the current year, and then compared with the results of the comparable period in the current year.

This press release constitutes the quarterly financial information required by article L.451-1-2 IV of the French Monetary and Financial Code (Code Monétaire et Financier).

About Dassault Systèmes

Dassault Systèmes, the 3D Experience Company, provides business and people with virtual universes to imagine sustainable innovations. Its world-leading solutions transform the way products are designed, produced, and supported. Dassault Systèmes’ collaborative solutions foster social innovation, expanding possibilities for the virtual world to improve the real world. The group brings value to over 150,000 customers of all sizes, in all industries, in more than 80 countries. For more information, visit www.3ds.com.

CATIA, SolidWorks, ENOVIA, SIMULIA, DELMIA, 3D VIA, 3DSwYm, EXALEAD, and Netvibes are registered trademarks of Dassault Systèmes or its subsidiaries in the US and/or other countries.

(Tables to follow)

TABLE OF CONTENTS

Non-IFRS key figures

Condensed consolidated statements of income

Condensed consolidated balance sheets

Condensed consolidated cash flow statements

IFRS – non-IFRS reconciliation

DASSAULT SYSTEMES

NON-IFRS KEY FIGURES
(unaudited; in millions of Euros, except per share data, headcount and exchange rates)

Non-IFRS key figures exclude the effects of adjusting the carrying value of acquired companies’ deferred revenue, stock-based compensation expense, amortization of acquired intangible assets, other operating income and expense, net and certain one-time financial revenue items and the income tax effects of these non-IFRS adjustments.

Comparable IFRS financial information and a reconciliation of the IFRS and non-IFRS measures are set forth in the separate tables within this Attachment.

 
      Three months ended
       

March 31,
2012

     

March 31,
2011

      Change      

Change
in cc*

Non-IFRS Revenue € 462.4       € 409.9       13%       10%
 
Non-IFRS Revenue breakdown by activity
Software revenue 419.9 372.6 13% 10%
of which new licenses revenue 120.3 99.0 22% 18%

of which periodic licenses, maintenance and
product development revenue

299.6 273.6 10% 7%
Services and other revenue 42.5 37.3 14% 11%
 
Recurring software revenue 297.6 273.3 9% 6%
 

Non-IFRS software revenue breakdown by
product line

PLM software revenue 321.5 288.5 11% 9%
of which CATIA software revenue 189.9 177.0 7% 6%
of which ENOVIA software revenue 58.1 48.0 21% 17%
SolidWorks software revenue 98.4 84.1 17% 13%
 
Non-IFRS Revenue breakdown by geography
Americas 126.4 112.8 12% 8%
Europe 204.1 186.8 9% 8%
Asia       131.9       110.3       20%       15%
 
Non-IFRS operating income € 135.3 € 116.1 17%
Non-IFRS operating margin 29.3% 28.3%
Non-IFRS net income 88.9 78.7 13%
Non-IFRS diluted net income per share       € 0.71       € 0.63       13%        
Closing headcount       9,630       9,195       5%        
 
Average Rate USD per Euro

1.31

1.37 (4%)
Average Rate JPY per Euro       104.0       112.6       (8%)        

*In constant currencies

 

DASSAULT SYSTEMES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (IFRS)
(unaudited; in millions of Euros, except per share data)

 
      Three months ended
       

March 31,
2012

     

March 31,
2011

New licenses revenue 120.3       99.0

Periodic licenses, maintenance and product
development revenue

299.6       273.2
Software revenue 419.9 372.2
Services and other revenue 42.5       37.3
Total Revenue € 462.4 € 409.5
Cost of software revenue (excluding amortization of acquired intangibles) (22.4) (19.0)
Cost of services and other revenue (43.1) (39.3)
Research and development (86.4) (76.9)
Marketing and sales (144.6) (131.5)
General and administrative (36.1) (30.9)
Amortization of acquired intangibles (21.5) (21.3)
Other operating income and expense, net (2.2)       0.2
Total Operating Expenses (€ 356.3)       (€ 318.7)
Operating Income € 106.1 € 90.8
Financial revenue and other, net 4.3       3.3
Income before income taxes 110.4 94.1
Income tax expense (37.2) (30.2)
Net Income 73.2 63.9
Non-controlling interest (1.1)       (0.1)
Net Income attributable to equity holders of the parent € 72.1       € 63.8
Basic net income per share 0.59       0.53
Diluted net income per share € 0.58       € 0.51
Basic weighted average shares outstanding (in millions) 122.8       121.2
Diluted weighted average shares outstanding (in millions)       125.3       124.0
 

IFRS revenue variation as reported and in constant currencies

 
Three months ended March 31, 2012
        Change*       Change in cc**
IFRS Revenue 13% 10%
IFRS Revenue by activity
Software Revenue 13% 10%
Services and other Revenue 14% 11%
IFRS Software Revenue by product line
PLM software revenue 12% 9%
of which CATIA software revenue 8% 6%
of which ENOVIA software revenue 21% 17%
SolidWorks software revenue 17% 13%
IFRS Revenue by geography
Americas 12% 8%
Europe 9% 8%
Asia       20%       15%

* Variation compared to the same period in the prior year. ** In constant currencies.

 

DASSAULT SYSTEMES
CONDENSED CONSOLIDATED BALANCE SHEETS (IFRS)
(unaudited; in millions of Euros)

 

       

March 31,
2012

     

December 31,
2011

           
ASSETS
Cash and cash equivalents 1,343.0 1,154.3
Short-term investments 216.7 268.7
Accounts receivable, net 464.4 494.3
Other current assets 148.2 139.4
Total current assets 2,172.3 2,056.7
Property and equipment, net 107.3 106.6
Goodwill and Intangible assets, net 1,211.5 1,241.9
Other non current assets 127.2       111.6
Total Assets       € 3,618.3       € 3,516.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable 85.2 99.9
Unearned revenues 542.2 492.0
Short-term debt 226.5 228.9
Other current liabilities 300.8 317.3
Total current liabilities 1,154.7 1,138.1
Long-term debt 66.2 72.4
Other non current obligations 214.3 222.6
Total long-term liabilities 280.5 295.0
Non-controlling interests 16.3 17.5
Parent shareholders' equity 2,166.8       2,066.2
Total Liabilities and Shareholders' equity       € 3,618.3       € 3,516.8
 

DASSAULT SYSTEMES
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (IFRS)
(unaudited; in millions of Euros)

 
      Three months ended
       

March 31,
2012

     

March 31,
2011

      Change
Net Income attributable to equity holders of the parent 72.1       63.8       8.3
Non-controlling interest 1.1       0.1       1.0
Net Income 73.2 63.9 9.3
Depreciation of property & equipment 9.1 6.2 2.9
Amortization of intangible assets 22.5 22.1 0.4
Other non cash P&L Items 5.5 0.5 5.0
Changes in working capital 55.4       41.0       14.4
Net Cash provided by operating activities € 165.7 € 133.7 € 32.0
 
Additions to property, equipement and intangibles (14.4) (9.2) (5.2)
Payments for acquisition of businesses, net of cash acquired (18.1) (29.5) 11.4
Sale of fixed assets 0.2 0.1 0.1
Sale (purchase) of short term investments, net 50.9 (162.9) 213.8
Loans and others (5.0)       (3.2)       (1.8)
Net Cash provided by (used in) investing activities € 13.6 (€ 204.7) € 218.3
 
Repurchase of common stock 0.0 (111.1) 111.1
Proceeds from exercise of stock-options 32.7       80.1       (47.4)
Net Cash provided by (used in) financing activities € 32.7 (€ 31.0) € 63.7
 

Effect of exchange rate changes on
cash and cash equivalents

(23.3) (37.7) 14.4
                 
Increase (decrease) in cash and cash equivalents       € 188.7       (€ 139.7)       € 328.4
                         
Cash and cash equivalents at beginning of period € 1,154.3 € 976.5
Cash and cash equivalents at end of period       € 1,343.0       € 836.8        
 

DASSAULT SYSTEMES
SUPPLEMENTAL NON-IFRS FINANCIAL INFORMATION
IFRS – NON-IFRS RECONCILIATION
(unaudited; in millions of Euros, except per share data)

Readers are cautioned that the supplemental non-IFRS information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRS measurements. Also, the Company’s supplemental non-IFRS financial information may not be comparable to similarly titled non-IFRS measures used by other companies. Further specific limitations for individual non-IFRS measures, and the reasons for presenting non-IFRS financial information, are set forth in the Company’s Document de référence for the year ended December 31, 2011 filed with the AMF on March 29, 2012. To compensate for these limitations, the supplemental non-IFRS financial information should be read not in isolation, but only in conjunction with the Company’s consolidated financial statements prepared in accordance with IFRS.

 

In millions of Euros, except per share data and
percentages

      Three months ended March 31,       Change
     

2012
IFRS

     

Adjustment
(1)

     

2012
non-IFRS

     

2011
IFRS

     

Adjustment
(1)

     

2011
non-IFRS

      IFRS      

Non-IFRS (2)

Total Revenue € 462.4                   € 409.5       0.4       € 409.9       13%       13%
Total Revenue breakdown by activity
Software revenue 419.9 372.2 0.4 372.6 13% 13%
New Licenses 120.3 99.0 22%
Product Development 2.0 0.3
Periodic Licenses and Maintenance 297.6 272.9 0.4 273.3 9% 9%
Recurring portion of Software revenue 71% 73% 73%
Services and other revenue 42.5 37.3 14%

Total Software Revenue breakdown
by product line

PLM software revenue 321.5 288.1 0.4 288.5 12% 11%
of which CATIA software revenue 189.9 176.6 0.4 177.0 8% 7%
of which ENOVIA software revenue 58.1 48.0 21%
SolidWorks software revenue 98.4 84.1 17%
Total Revenue breakdown by geography
Americas 126.4 112.7 0.1 112.8 12% 12%
Europe 204.1 186.8 9%
Asia       131.9                       110.0       0.3       110.3       20%       20%
Total Operating Expenses (€ 356.3) 29.2 (€ 327.1) (€ 318.7) 24.9 (€ 293.8) 12% 11%
Stock-based compensation expense (5.5) 5.5 - (3.8) 3.8 - - -
Amortization of acquired intangibles (21.5) 21.5 - (21.3) 21.3 - - -
Other operating income and expense, net       (2.2)       2.2       -       0.2       (0.2)       -       -       -
Operating Income € 106.1 29.2 € 135.3 € 90.8 25.3 € 116.1 17% 17%
Operating Margin 22.9% 29.3% 22.2% 28.3%
Financial revenue & other, net 4.3 (2.6) 1.7 3.3 (3.3) 0.0 30% N/A
Income tax expense (37.2) (9.8) (47.0) (30.2) (7.1) (37.3) 23% 26%
Non-controlling interest (1.1) 0.0 (1.1) (0.1) 0.0 (0.1) 1000% 1000%
Net Income attributable to shareholders € 72.1 16.8 € 88.9 € 63.8 14.9 € 78.7 13% 13%
Diluted Net Income Per Share (3)       € 0.58       0.13       € 0.71       € 0.51       0.12       € 0.63       14%       13%

(1) In the reconciliation schedule above, (i) all adjustments to IFRS revenue data reflect the exclusion of the deferred revenue adjustment of acquired companies; (ii) adjustments to IFRS operating expense data reflect the exclusion of the amortization of acquired intangibles, share-based compensation expense, and other operating income and expense, (iii) adjustments to IFRS financial revenue and other, net reflect the exclusion of certain one-time items included in financial revenue and other, net, and (iv) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted net income per share, the income tax effect of the non-IFRS adjustments.

 
In millions of Euros       Three months ended March 31,
      2012 IFRS       Adjustment      

2012
non-IFRS

      2011 IFRS       Adjustment      

2011
non-IFRS

Cost of revenue (65.5)       0.2       (65.3)       (58.3)       0.1       (58.2)
Research and development (86.4) 2.6 (83.8) (76.9) 1.8 (75.1)
Marketing and sales (144.6) 1.4 (143.2) (131.5) 1.0 (130.5)
General and administrative (36.1) 1.3 (34.8) (30.9) 0.9 (30.0)
Total stock-based compensation expense               5.5                       3.8        

(2) The non-IFRS percentage increase (decrease) compares non-IFRS measures for the two different periods. In the event there is non-IFRS adjustment to the relevant measure for only one of the periods under comparison, the non-IFRS increase (decrease) compares the non-IFRS measure to the relevant IFRS measure.

(3) Based on a weighted average 125.3 million diluted shares for Q1 2012 and 124.0 million diluted shares for Q1 2011.


Contact:

Dassault Systèmes :
François-José Bordonado/Beatrix Martinez, 33-1-61-62-69-24
or
United States and Canada:
Email Contact
or
FTI Consulting :
Jon Snowball, 44-20-7831-3113
or
Clément Bénétreau/ Yannick Duvergé, 33-1-47-03-68-10