Business Outlook
Thibault de Tersant, Senior Executive Vice President, CFO, commented, “First quarter financial results were well aligned with our objectives. We saw a strong global performance for recurring software revenue. SOLIDWORKS new licenses activity continued to demonstrate an excellent dynamic, benefitting from its leadership position. For larger clients, sales during the first quarter reflected the increased seasonality of decision-making as expected, while discussions with clients gave us improved visibility for the year.
“Looking forward, we anticipate a year of improved new licenses revenue growth, accompanied by recurring software revenue growth of about 6% in the coming quarters. Drivers animating our revenue growth are 3DEXPERIENCE, pioneering the next generation innovation platform, and expansion in our core and diversification industries thanks to the end to end digital continuity provided by our industry solutions experiences, enabling our customers to build their value chain. For 2017, we are reconfirming and upgrading our financial objectives for the full amount of the currency upside during the first quarter leading to a target revenue growth of about 6 to 7% in constant currencies translating to €3.290 to €3.315 billion in total revenue, a non-IFRS operating margin of about 31.5% and non-IFRS EPS growth of about 7 to 9%.” (All figures on a non-IFRS basis)
The Company’s second quarter and full year 2017 financial objectives are as follows:
- Second quarter 2017 non-IFRS total revenue objective of about €805 to €815 million based upon the exchange rates assumptions below, growing about 6% to 7% in constant currencies; non-IFRS operating margin of about 29.4% to 30.4%; and non-IFRS EPS of about €0.60 to €0.62;
- 2017 non-IFRS revenue growth objective of about 6% to 7% in constant currencies at €3.290 to €3.315 billion (reflecting the principal 2017 currency exchange rate assumptions below for the US dollar and Japanese yen) as well as the potential impact from additional currencies representing about 10% of the Company’s total revenue in 2016;
- 2017 non-IFRS operating margin of about 31.5% compared to 2016 where the non-IFRS operating margin was 31.2%;
- 2017 non-IFRS EPS of about €2.67 to €2.72, representing a growth objective of about 7% to 9%;
- Objectives are based upon exchange rate assumptions of US$1.10 per €1.00 for the 2017 second quarter and US$1.09 per €1.00 for the full year; and JPY117 per €1.00 for the 2017 second quarter and JPY118 per €1.00 for the full year before hedging.
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 2017 non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2017 principal currency exchange rates above: deferred revenue write-downs estimated at approximately €12 million, share-based compensation expense, including related social charges, estimated at approximately €81 million and amortization of acquired intangibles estimated at approximately €161 million. The above objectives also do not include any impact from other operating income and expense, net principally comprised of acquisition, integration and restructuring expenses, from one-time items included in financial revenue and from one-time tax restructuring gains and losses. Finally, these estimates do not include any new stock option or share grants, or any new acquisitions or restructurings completed after April 26, 2017.
Today’s Webcast and Conference Call Information
Today, Wednesday, April 26, 2017, Dassault Systèmes will first host a webcasted meeting from London 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/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 1 year.
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.
Key Investor Relations Events
Annual Meeting of Shareholders, May 23, 2017
Second Quarter 2017
Earnings, July 25, 2017
Third Quarter 2017 Earnings, October 25,
2017
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 2017 takes into consideration, among other
things, an uncertain global economic environment. In light of the
continuing uncertainties regarding economic, business, social and
geopolitical conditions at the global level, the Company’s revenue, net
earnings and cash flows may grow more slowly, whether on an annual or
quarterly basis. While the Company makes every effort to take into
consideration this uncertain macroeconomic outlook, the Company’s
business results, however, may not develop as anticipated. Further,
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. 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 2016 Document de
Référence (Annual Report) filed with the AMF (French Financial
Markets Authority) on March 22, 2017, and also available on the
Company’s website
www.3ds.com .
