Dassault Systèmes Reports Solid Third Quarter Led by Large Accounts Industry Solutions Engagements
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Dassault Systèmes Reports Solid Third Quarter Led by Large Accounts Industry Solutions Engagements

VÉLIZY-VILLACOUBLAY, France — (BUSINESS WIRE) — October 22, 2014Dassault Systèmes (Euronext Paris: #13065, DSY.PA), the 3DEXPERIENCE Company, world leader in 3D design software, 3D Digital Mock Up and Product Lifecycle Management (PLM) solutions, today announced IFRS unaudited financial results for the third quarter and nine months ended September 30, 2014. These results were reviewed by the Company’s Board of Directors on October 21, 2014.

Summary Highlights
(unaudited)

2014 Third Quarter and Nine Months Financial Summary

(unaudited)

           
In millions of Euros, except per share data IFRS   Non-IFRS
        Change   Change in cc*       Change   Change in cc*
Q3 Total Revenue   562.1   14%   16%   579.7   17%   19%
Q3 Operating Margin   18.2%           29.7%        
Q3 EPS   0.28   (20%)       0.45   2%    
                         
In millions of Euros, except per share data IFRS   Non-IFRS
        Change   Change in cc*       Change   Change in cc*
2014 YTD Total Revenue   1,621.1   8%   13%   1,652.6   10%   14%
2014 YTD Operating Margin   17.4%           28.7%        
2014 YTD EPS   0.75   (22%)       1.24   0%    

*In constant currencies (ex fx).

“As our actions during 2014 have demonstrated we have been on an accelerated strategy implementation path with the introduction of our 3DEXPERIENCE platform, initial Cloud offer and expanded Industry Solution Experiences coverage,” commented Bernard Charlès, Dassault Systèmes President and Chief Executive Officer.

“On top of this we have made several critical acquisitions extending our addressable market in a significant manner. With our new brand, BIOVIA, our ability to address the chemistry, biology and material sciences industries represents an incredible expansion of our expertise and market opportunities. In manufacturing we now have an end to end solution extending from digital manufacturing to manufacturing operations management to operations planning and optimization thanks to the combination of DELMIA with the Apriso and Quintiq acquisitions.

“In addition to advancing strategically, we are focused on advancing our execution across the Company. In sales, our decision to design and go to market with Industry Solution Experiences has enabled us to elevate our customer engagements thanks to the very direct relevancy of these solution experiences to our clients’ perspectives on their businesses. In turn, this has led to an improvement in our new licenses traction with large accounts in a number of countries in Asia, in North America and in selected countries in Europe.

“Altogether, the implementation of these strategic and operational initiatives have enabled us to continue to strengthen our market position and offer to companies in the aerospace, automotive, industrial equipment and high tech industries while also extending our market reach and offer to a number of industries in a more comprehensive manner.”

2014 Third Quarter Financial Summary

(unaudited)

           
In millions of Euros, except per share data IFRS   Non-IFRS
        Change   Change in cc*       Change   Change in cc*
Q3 Total Revenue   562.1   14%   16%   579.7   17%   19%
Q3 Software Revenue   497.6   11%   13%   511.7   13%   16%
Q3 Services and other revenue   64.5   45%   46%   68.0   52%   54%
Q3 Operating Margin   18.2%           29.7%        
Q3 EPS   0.28   (20%)       0.45   2%    
 
                         
In millions of Euros IFRS   Non-IFRS
    Q3 2014   Q3 2013   Change in cc*   Q3 2014   Q3 2013   Change in cc*
Americas   165.4   138.8   20%   170.0   140.3   22%
Europe   243.9   219.0   11%   253.8   220.1   15%
Asia   152.8   135.6   22%   155.9   135.7   24%

*In constant currencies.

2014 Nine Months Financial Summary

(unaudited)

   
In millions of Euros, except per share data IFRS   Non-IFRS
      Change   Change in cc*       Change   Change in cc*
2014 YTD Total Revenue   1,621.1   8%   13%   1,652.6   10%   14%
2014 YTD Software Revenue   1,442.8   5%   10%   1,469.8   7%   11%
2014 YTD Services and other revenue   178.3   36%   39%   182.8   40%   43%
2014 YTD Operating Margin   17.4%           28.7%        
2014 YTD EPS   0.75   (22%)       1.24   0%    
                         
In millions of Euros IFRS   Non-IFRS
  2014 YTD   2013 YTD   Change in cc*   2014 YTD   2013 YTD   Change in cc*
Americas   460.7   417.6   14%   471.3   420.1   16%
Europe   734.6   665.5   11%   750.1   667.2   13%
Asia   425.8   417.6   14%   431.2   419.5   15%

*In constant currencies.

Cash Flow and Other Financial Highlights

Net operating cash flow was €90.1 million and €444.7 million for the three and nine months ended September 30, 2014, compared to €75.1 million and €428.4 million for the 2013 respective periods.

For the first nine months of 2014, the Company uses of cash were for acquisitions of €935.0 million, net of cash acquired; share repurchases of €151.3 million, cash dividends of €35.8 million and capital expenditures of €27.2 million. The Company received cash for stock options exercised of €48.3 million.

At September 30, 2014, the net financial position was €821.3 million, compared to €1.44 billion at December 31, 2013. Cash, cash equivalents and short-term investments totaled €1.17 billion and long-term debt was €350.0 million, compared to €1.80 billion, and €360.0 million, respectively, at December 31, 2013.

Summary of Recent Business, Technology and Customer Highlights

Acquisitions

Dassault Systèmes Extends 3DEXPERIENCE Platform to Global Business Operations Planning With Completion of Quintiq Acquisition. Quintiq, with 800 employees, is a global leader in supply chain management and optimization with offerings spanning production, logistics and workforce planning applications. Receiving a top ranking by leading industry analysts, Quintiq’s solutions are used today by 250 customers, at 1,000 sites, in more than 90 countries. For Dassault Systèmes, Quintiq provides new reach into industries such as metals, mining, oil & gas, rail, delivery and freight, among key target markets for investment.

Software Introductions

Dassault Systèmes Introduces SOLIDWORKS 2015, giving users access to cloud-based capabilities and a wider range of choices for improving productivity, work processes and operating costs. SOLIDWORKS 2015 covers all comprehensive aspects of the product development process with an intuitive, integrated 3D development environment that includes 3D design, simulation, electrical design, product data management and technical communication. In addition, starting with the new Collaborative Sharing feature, SOLIDWORKS 2015 enables access to Dassault Systèmes’ 3DEXPERIENCE platform and its cloud-based capabilities. Designers and engineers can span multiple disciplines with ease, shortening the design cycle, increasing productivity and collaborating to deliver innovative products to market faster.

Education

Dartmouth College Expands Use of SOLIDWORKS Applications for Innovative Engineering Education. The Thayer School of Engineering at Dartmouth College has expanded its implementation of SOLIDWORKS. Powered by the 3DEXPERIENCE platform, the application is now introduced to all engineering majors as part of the core curriculum in the school. The expansion is an integral part of recent enhancements made to the school’s innovative engineering programs, integrating SOLIDWORKS into more courses and research programs at all levels each year.

Since inception, SOLIDWORKS educational licenses exceed 1.8 million.

Business Outlook

Thibault de Tersant, Senior Executive Vice President, CFO, commented, “Our third quarter performance tracked with our financial objectives, with revenue in line and operating margin evolution somewhat ahead. Our revenue results demonstrated solid demand across our largest brands. We were particularly pleased with the sharply higher new licenses revenue growth for both CATIA and ENOVIA, in the quarter as well as year-to-date on a constant currency basis.

“We said at the start of the year that we were focused on driving a substantial improvement in our organic operating margin to mitigate the dilution impact of our acquisitions and we have, with a year-to-date improvement of about 150 basis points in our organic non-IFRS operating margin.

“Turning to our objectives, despite the more difficult economic environment, notably in Europe, we reaffirm our financial objectives and update them for the inclusion of the recently closed Quintiq acquisition and currency exchange rate assumptions.”

The Company’s fourth quarter and full year 2014 financial objectives, including the recently completed acquisition of Quintiq, 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 2014 non-IFRS objectives set forth above do not take into account the following accounting elements, are estimated based upon the 2014 currency exchange rates above and include the impact from the recently completed Quintiq acquisition: deferred revenue write-downs estimated at approximately €52 million, share-based compensation expense, including related social charges, estimated at approximately €41 million and amortization of acquired intangibles estimated at approximately €129 million. The above objectives do not include any impact from other operating income and expense, net principally comprised of acquisition, integration and restructuring expenses. Finally, these estimates do not include any new stock option or share grants, or any new acquisitions or restructurings completed after October 23, 2014.

Today’s Webcast and Conference Call Information

Today, Thursday, October 23, 2014, 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 also 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/investors/. 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/investors/ or by calling Dassault Systèmes’ Investor Relations at 33.1.61.62.69.24.

2014 Key Investor Relations Events

Fourth Quarter 2014 Earnings, February 5, 2015

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. The Company’s current outlook for 2014 takes into consideration, among other things, an uncertain macroeconomic outlook, but if global economic and business conditions further deteriorate, the Company’s business results may not develop as currently anticipated and may drop below their earlier levels for an extended period of time. Furthermore, due to factors affecting sales of the Company’s products and services as described above, there may be a substantial time lag between an improvement in global economic and business conditions and an upswing in the Company’s business results.

In preparing such forward-looking statements, the Company has in particular assumed an average US dollar to euro exchange rate of US$1.30 per €1.00 for the fourth quarter and US$1.34 per €1.00 for the full year as well as an average Japanese yen to euro exchange rate of JPY140 to €1.00 for the 2014 fourth quarter and JPY139.6 to €1.00 for the full year; 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 numerous risks and uncertainties, as described in the “Risk Factors” section of the 2013 Document de Référence, filed with the AMF on March 28, 2014, and also available on the Company’s website www.3ds.com.

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, 2013 included in the Company’s 2013 Document de Référence filed with the AMF on March 28, 2014.

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, share-based compensation expense and related social charges, the amortization of acquired intangible assets, other operating 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 and certain one-time tax effects. 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 3DEXPERIENCE 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 190,000 customers of all sizes, in all industries, in more than 140 countries. For more information, visit www.3ds.com.

CATIA, SOLIDWORKS, ENOVIA, DELMIA, SIMULIA, GEOVIA, EXALEAD, 3D VIA, 3DSWYM, BIOVIA, 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, share-based compensation expense and related social charges, amortization of acquired intangible assets, other operating income and expense, net, certain one-time financial revenue items and the income tax effects of these non-IFRS adjustments and certain one-time tax effects.

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

In millions of Euros, except per share data and percentages   Three months ended   Nine months ended
   

September 30,

2014

 

September 30,

2013

  Change  

Change

in cc*

 

September 30,

2014

 

September 30,

2013

  Change  

Change

in cc*

Non-IFRS Revenue € 579.7   € 496.1   17%   19%   € 1,652.6   € 1,506.8   10%   14%
 
Non-IFRS Revenue breakdown by activity
Software revenue 511.7 451.5 13% 16% 1,469.8 1,375.8 7% 11%
of which new licenses revenue 123.4 100.0 23% 23% 381.5 343.2 11% 14%
of which periodic licenses, maintenance and

other software-related revenue

388.3 351.5 10% 14% 1,088.3 1,032.6 5% 11%
Services and other revenue 68.0 44.6 52% 54% 182.8 131.0 40% 43%
 
Non-IFRS Recurring software revenue 385.6 349.3 10% 14% 1,081.5 1,028.3 5% 10%
 
Non-IFRS software revenue breakdown by product line
CATIA software revenue 203.8 198.0 3% 7% 608.1 603.6 1% 6%
ENOVIA software revenue 60.0 55.9 7% 8% 185.0 177.0 5% 8%
SOLIDWORKS software revenue 110.5 97.7 13% 14% 321.8 305.2 5% 9%
Other software revenue 137.4 99.9 38% 38% 354.9 290.0 22% 27%
 
Non-IFRS Revenue breakdown by geography
Americas 170.0 140.3 21% 22% 471.3 420.1 12% 16%
Europe 253.8 220.1 15% 15% 750.1 667.2 12% 13%
Asia   155.9   135.7   15%   24%   431.2   419.5   3%   15%
 
Non-IFRS operating income € 172.1 € 157.0 10% € 473.8 € 455.4 4%
Non-IFRS operating margin 29.7% 31.6% 28.7% 30.2%
Non-IFRS net income 115.4 112.3 3% 316.6 316.9 (0%)
Non-IFRS diluted net income per share   € 0.45   € 0.44   2%       € 1.24   € 1.24   0%    
Closing headcount   13.133   10.713   23%       13.133   10.713   23%    
 
Average Rate USD per Euro 1.33 1.32 1% 1.35 1.32 2%
Average Rate JPY per Euro   137.7   131.0   5%       139.5   127.4   9%    

*In constant currencies

DASSAULT SYSTEMES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (IFRS)

(unaudited; in millions of Euros, except per share data)

   
In millions of Euros, except per share data and percentages Three months ended   Nine months ended
September 30,   September 30, September 30,   September 30,
    2014   2013   2014   2013
New licenses revenue 122.5 100.0 380.2 343.2
Periodic licenses, maintenance and other software-related revenue 375.1   348.8   1,062.6   1,026.5
Software revenue 497.6 448.8 1,442.8 1,369.7
Services and other revenue 64.5   44.6   178.3   131.0
Total Revenue € 562.1 € 493.4 € 1,621.1 € 1,500.7
Cost of software revenue (excluding amortization of acquired intangibles) (28.8) (23.5) (80.9) (71.2)
Cost of services and other revenue (57.7) (38.3) (152.7) (120.4)
Research and development (103.7) (87.1) (298.1) (279.0)
Marketing and sales (181.7) (161.7) (544.6) (495.1)
General and administrative (43.5) (37.7) (138.9) (113.2)
Amortization of acquired intangibles (34.6) (26.7) (92.2) (75.5)
Other operating income and expense, net (9.8)   (5.2)   (31.5)   (9.4)
Total Operating Expenses (€ 459.8)   (€ 380.2)   (€ 1,338.9)   (€ 1,163.8)
Operating Income € 102.3 € 113.2 € 282.2 € 336.9
Financial revenue and other, net 5.6   3.5   13.0   15.3
Income before income taxes 107.9 116.7 295.2 352.2
Income tax expense (36.3) (26.8) (103.1) (105.9)
Net Income 71.6 89.9 192.1 246.3
Non-controlling interest (0.1)   (0.4)   (0.2)   (2.1)
Net Income attributable to equity holders of the parent € 71.5   € 89.5   € 191.9   € 244.2
Basic net income per share 0.28   0.36   0.77   0.98
Diluted net income per share € 0.28   € 0.35   € 0.75   € 0.96
Basic weighted average shares outstanding (in millions) 251.3   250.8   250.7   249.5
Diluted weighted average shares outstanding (in millions)   255.5   256.5   255.2   255.1
 

IFRS revenue variation as reported and in constant currencies

   
Three months ended September 30, 2014   Nine months ended September 30, 2014
    Change*   Change in cc**   Change*   Change in cc**
IFRS Revenue 14%   16% 8%   13%
IFRS Revenue by activity
Software revenue 11% 13% 5% 10%
Services and other revenue 45% 46% 36% 39%
IFRS Software Revenue by product line
CATIA software revenue 3% 7% 1% 7%
ENOVIA software revenue 7% 8% 5% 8%
SOLIDWORKS software revenue 13% 13% 5% 8%
Other software revenue 27% 27% 15% 19%
IFRS Revenue by geography
Americas 19% 20% 10% 14%
Europe 11% 11% 10% 11%
Asia   13%   22%   2%   14%

*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)

   
In millions of Euros September 30, December 31,
    2014   2013
 
ASSETS
Cash and cash equivalents 1,103.9 1,737.9
Short-term investments 67.4 65.8
Accounts receivable, net 415.3 472.6
Other current assets 211.2 143.7
Total current assets 1,797.8 2,420.0
Property and equipment, net 128.9 100.4
Goodwill and Intangible assets, net 2,672.9 1,531.7
Other non-current assets 154.5   135.8
Total Assets   € 4,754.1   € 4,187.9
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable 104.5 85.0
Unearned revenues 594.2 489.0
Short-term debt 21.0 20.0
Other current liabilities 332.5 294.3
Total current liabilities 1,052.2 888.3
Long-term debt 350.0 360.0
Other non-current obligations 520.2 315.5
Total long-term liabilities 870.2 675.5
Non-controlling interests 26.8 13.6
Parent shareholders' equity 2,804.9   2,610.5
Total Liabilities and Shareholders' equity   € 4,754.1   € 4,187.9
 

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

In millions of Euros   Three months ended   Nine months ended
   

September 30,

2014

 

September 30,

2013

  Change  

September 30,

2014

 

September 30,

2013

  Change
Net Income attributable to equity holders of the parent 71.5   89.5   (18.0)   191.9   244.2   (52.3)
Non-controlling interest 0.1   0.4   (0.3)   0.2   2.1   (1.9)
Net Income 71.6 89.9 (18.3) 192.1 246.3 (54.2)
Depreciation of property & equipment 9.4 8.6 0.8 26.5 25.7 0.8
Amortization of intangible assets 34.7 28.7 6.0 97.6 80.7 16.9
Other non cash P&L Items (7.9) 8.6 (16.5) 2.5 16.0 (13.5)
Changes in working capital (17.7)   (60.7)   43.0   126.0   59.7   66.3
Net Cash provided by operating activities € 90.1 € 75.1 € 15.0 € 444.7 € 428.4 16.3
 
Additions to property, equipment and intangibles (13.1) (7.9) (5.2) (27.2) (31.1) 3.9
Payments for acquisition of businesses, net of cash acquired (277.7) (182.7) (95.0) (935.0) (209.1) (725.9)
Sale (purchase) of short term investments, net 28.6 5.6 23.0 2.0 (6.7) 8.7
Purchase of investments, loans and others 5.8   (1.2)   7.0   (1.0)   0.9   (1.9)
Net Cash provided by (used in) investing activities (€ 256.4) (€ 186.2) (70.2) (€ 961.2) (€ 246.0) (€ 715.2)
 
Proceeds (Repayments) of short-term and long-term debt - (0.7) 0.7 (10.3) 337.8 (348.1)
(Purchase) Sale of treasury stock (21.3) - (21.3) (151.3) - (151.3)
Proceeds from exercise of stock options 13.7 8.5 5.2 48.3 30.1 18.2
Cash dividend paid (3.5)   (3.2)   (0.3)   (35.8)   (34.8)   (1.0)
Net Cash provided by (used in) financing activities (€ 11.1) € 4.6 (€ 15.7) (€ 149.1) 333.1 (€ 482.2)
 
Effect of exchange rate changes on

cash and cash equivalents

27.8 (20.1) 47.9 31.6 (22.7) 54.3
                     
Increase (decrease) in cash and cash equivalents  

(€ 149.6)

 

(€ 126.6)

  (€ 23.0)   (€ 634.0)  

€ 492.8

  (€ 1,126.8)
                         
Cash and cash equivalents at beginning of period € 1,253.5 € 1,778.7 € 1,737.9 € 1,159.3
Cash and cash equivalents at end of period   € 1,103.9   € 1,652.1       € 1,103.9   € 1,652.1    
 

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, 2013 filed with the AMF on March 28, 2014. 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 September 30,   Change
2014   Adjustment (1)   2014   2013   Adjustment (1)   2013   IFRS   Non-IFRS (2)
  IFRS     non-IFRS   IFRS     non-IFRS    
Total Revenue € 562.1 17.6 579.7 € 493.4 2.7 € 496.1 14% 17%
Total Revenue breakdown by activity
Software revenue 497.6 14.1 511.7 448.8 2.7 451.5 11% 13%
New Licenses 122.5 0.9 123.4 100.0 23% 23%
Other software-related revenue 2.7 2.2 23%
Periodic Licenses and Maintenance 372.4 13.2 385.6 346.6 2.7 349.3 7% 10%
Recurring portion of Software revenue 75% 75% 77% 77%
Services and other revenue 64.5 3.5 68.0 44.6 45% 52%
 
Total Software Revenue breakdown by product line
CATIA software revenue 203.8 198.0 3%
ENOVIA software revenue 60.0 55.9 7%
SOLIDWORKS software revenue 110.5 97.7 13%
Other software revenue 123.3 14.1 137.4 97.2 2.7 99.9 27% 38%
 
Total Revenue breakdown by geography
Americas 165.4 4.6 170.0 138.8 1.5 140.3 19% 21%
Europe 243.9 9.9 253.8 219.0 1.1 220.1 11% 15%
Asia   152.8   3.1   155.9   135.6   0.1   135.7   13%   15%
 
Total Operating Expenses (€ 459.8) 52.2 (€ 407.6) (€ 380.2) 41.1 (€ 339.1) 21% 20%
Share-based compensation expense (7.8) 7.8 - (9.2) 9.2 - - -
Amortization of acquired intangibles (34.6) 34.6 - (26.7) 26.7 - - -
Other operating income and expense, net   (9.8)   9.8   -   (5.2)   5.2   -   -   -
 
Operating Income € 102.3 69.8 € 172.1 € 113.2 43.8 € 157.0 (10%) 10%
Operating Margin 18.2% 29.7% 22.9% 31.6%
Financial revenue & other, net 5.6 (1.8) 3.8 3.5 0.1 3.6 60% 6%
Income tax expense (36.3) (24.0) (60.3) (26.8) (21.1) (47.9) 35% 26%
Non-controlling interest (0.1) (0.1) (0.2) (0.4) 0.0 (0.4) (75%) (50%)
Net Income attributable to shareholders € 71.5 43.9 € 115.4 € 89.5 22.8 € 112.3 (20%) 3%
Diluted Net Income Per Share (3)   € 0.28   0.17   € 0.45   € 0.35   0.09   € 0.44   (20%)   2%

(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 related social charges, 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 and certain one-time tax effects.

  Three months ended September 30,
In millions of Euros 2014 IFRS   Adjustment   2014   2013 IFRS   Adjustment   2013
            non-IFRS           non-IFRS
Cost of revenue (86.5) 0.3 (86.2) (61.8) 0.3 (61.5)
Research and development (103.7) 3.2 (100.5) (87.1) 3.9 (83.2)
Marketing and sales (181.7) 2.8 (178.9) (161.7) 3.1 (158.6)
General and administrative (43.5) 1.5 (42.0) (37.7) 1.9 (35.8)
Total share-based compensation expense       7.8           9.2    

(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 255.5 million diluted shares for Q3 2014 and 256.5 million diluted shares for Q3 2013.

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, 2013 filed with the AMF on March 28, 2014. 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   Nine months ended September 30,   Change
2014   Adjustment (1)   2014   2013   Adjustment (1)   2013   IFRS   Non-IFRS (2)
  IFRS     non-IFRS   IFRS     non-IFRS    
Total Revenue € 1,621.1 31.5 € 1,652.6 € 1,500.7 6.1 € 1,506.8 8% 10%
Total Revenue breakdown by activity
Software revenue 1,442.8 27.0 1,469.8 1,369.7 6.1 1,375.8 5% 7%
New Licenses 380.2 1.3 381.5 343.2 11% 11%
Other software-related revenue 6.8 4.3 58%
Periodic Licenses and Maintenance 1,055.8 25.7 1,081.5 1,022.2 6.1 1,028.3 3% 5%
Recurring portion of Software revenue 73% 74% 75% 75%
Services and other revenue 178.3 4.5 182.8 131.0 36% 40%
Total Software Revenue breakdown by product line
CATIA software revenue 608.1 603.6 1%
ENOVIA software revenue 185.0 177.0 5%
SOLIDWORKS software revenue 321.8 305.2 5%
Other software revenue 327.9 27.0 354.9 283.9 6.1 290.0 15% 22%
 
Total Revenue breakdown by geography
Americas 460.7 10.6 471.3 417.6 2.5 420.1 10% 12%
Europe 734.6 15.5 750.1 665.5 1.7 667.2 10% 12%
Asia   425.8   5.4   431.2   417.6   1.9   419.5   2%   3%
 
Total Operating Expenses (€ 1,338.9) 160.1 (€ 1,178.8) (€ 1,163.8) 112.4 (€ 1,051.4) 15% 12%
Share-based compensation expense (36.4) 36.4 - (27.5) 27.5 - - -
Amortization of acquired intangibles (92.2) 92.2 - (75.5) 75.5 - - -
Other operating income and expense, net   (31.5)   31.5   -   (9.4)   9.4   -   -   -
 
Operating Income € 282.2 191.6 € 473.8 € 336.9 118.5 € 455.4 (16%) 4%
Operating Margin 17.4% 28.7% 22.4% 30.2%
Financial revenue & other, net 13.0 (1.8) 11.2 15.3 (0.6) 14.7 (15%) (24%)
Income tax expense (103.1) (64.7) (167.8) (105.9) (45.2) (151.1) (3%) 11%
Non-controlling interest (0.2) (0.4) (0.6) (2.1) 0.0 (2.1) (90%) (71%)
Net Income attributable to shareholders € 191.9 124.7 € 316.6 € 244.2 72.7 € 316.9 (21%) (0%)
Diluted Net Income Per Share (3)   € 0.75   0.49   € 1.24   € 0.96   0.28   € 1.24   (22%)   0%

(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 related social charges, 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 and certain one-time tax effects.

  Nine months ended September 30,
In millions of Euros 2014 IFRS   Adjustment   2014   2013 IFRS   Adjustment   2013
            non-IFRS           non-IFRS
Cost of revenue (233.6) 1.0 (232.6) (191.6) 0.7 (190.9)
Research and development (298.1) 14.4 (283.7) (279.0) 11.6 (267.4)
Marketing and sales (544.6) 10.8 (533.8) (495.1) 9.2 (485.9)
General and administrative (138.9) 10.2 (128.7) (113.2) 6.0 (107.2)
Total share-based compensation expense       36.4           27.5    
 

(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 255.2 million diluted shares for YTD 2014 and 255.1 million diluted shares for YTD 2013.



Contact:

Dassault Systèmes:
François-José Bordonado/Béatrix Martinez, +33.1.61.62.69.24
North America:
Email Contact
or
FTI Consulting:
Rob Mindell, +44.20.3727.1000
Clément Bénétreau, +33.1.47.03.68.10