Dassault Systèmes Delivers Q2 Software Revenue and EPS at the High-end of its Objectives and Signs with Boeing a New and Expanded Historic Partnership Agreement
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Dassault Systèmes Delivers Q2 Software Revenue and EPS at the High-end of its Objectives and Signs with Boeing a New and Expanded Historic Partnership Agreement

VÉLIZY-VILLACOUBLAY, France — (BUSINESS WIRE) — July 24, 2017Dassault Systèmes (Paris: DSY) (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 second quarter and six months ended June 30, 2017. These results were reviewed by the Company’s Board of Directors on July 24, 2017.

Summary Second Quarter and First Half 2017 Highlights
(Unaudited; revenue figures in constant currencies; non-IFRS)

   

2017 Second Quarter and First Half Financial Highlights

(Unaudited)

 

In millions of Euros, except per share data

  IFRS   Non-IFRS  
      Change   Change in cc*       Change   Change in cc*  
Q2 2017 Total Revenue  

806.4

  7%   6%  

810.6

  8%   6%  
Q2 2017 Operating Margin  

21.0%

         

30.1%

         
Q2 2017 EPS  

0.48

  23%      

0.62

  9%      
                           

In millions of Euros, except per share data

  IFRS   Non-IFRS  
      Change   Change in cc*       Change   Change in cc*  
YTD 2017 Total Revenue  

1,566.2

  8%   6%  

1,576.3

  9%   7%  
YTD 2017 Operating Margin  

18.4%

         

28.2%

         
YTD 2017 EPS  

0.81

  9%      

1.15

  6%      

*In constant currencies

                         
                           

Bernard Charlès, Dassault Systèmes’ Vice Chairman and Chief Executive Officer commented, “In the second quarter, we entered into a new and expanded strategic partnership with Boeing. This agreement spans Boeing’s Commercial Aircraft, Space and Defense divisions, with Boeing adopting the 3DEXPERIENCE Platform for Manufacturing Operations Management and Product Lifecycle Management and extending our software usage for design, engineering simulation and digital manufacturing software.

“This new agreement, with the deployment of our 3DEXPERIENCE platform to support Boeing’s complete value chain, from innovation to manufacturing and after sales, as well as enhancement of data thus created, represents a new step, equivalent to or even more important in potential reach than the previous one, thanks to the ability to holistically evaluate, with the 3DEXPERIENCE platform, all data produced from the different value streams, and to convert this data into assets, thus delivering massive benefits for users and their corporations.

“Looking back, twenty-five years ago, the importance of the digital world’s role in innovation was truly first revealed thanks to Boeing’s historical decision at that time to rely on Dassault Systèmes’ Digital Mock-Up software to design the new B-777, paving the way for digital twins of products.

“Finally, while we were pleased with second quarter results having reached the high-end of our objectives for software revenue and EPS, it is only a step on a trajectory on which Dassault Systèmes should see an acceleration of its growth, based upon the multiple strategic clients’ decisions, like Boeing’s, demonstrating our ideal positioning to bring value to all the industries we serve.”

   

2017 Second Quarter Financial Summary

(Unaudited)

 
In millions of Euros, except per share data   IFRS   Non-IFRS  
      Change   Change in cc*       Change   Change in cc*  
Q2 2017 Total Revenue   806.4   7%   6%   810.6   8%   6%  
Q2 2017 Software Revenue   718.5   7%   6%   722.7   8%   7%  
Q2 2017 Service Revenue   87.9   4%   3%   87.9   4%   3%  
Q2 2017 Operating Margin   21.0%           30.1%          
Q2 2017 EPS   0.48   23%       0.62   9%      
                           
Total Software Revenue in millions of Euros   IFRS   Non-IFRS  
  Q2 2017   Q2 2016   Change in cc*   Q2 2017   Q2 2016   Change in cc*  
Americas   224.4   202.0   8%   225.7   202.0   9%  
Europe   297.4   282.2   6%   300.1   282.2   7%  
Asia   196.7   185.2   4%   196.9   185.2   4%  

*In constant currencies

                         
                           
   

2017 First Half Financial Summary

(Unaudited)

 
In millions of Euros, except per share data   IFRS   Non-IFRS  
      Change   Change in cc*       Change   Change in cc*  
YTD 2017 Total Revenue   1,566.2   8%   6%   1,576.3   9%   7%  
YTD 2017 Software Revenue   1,388.7   8%   6%   1,398.8   9%   7%  
YTD 2017 Services Revenue   177.5   8%   7%   177.5   8%   7%  
YTD 2017 Operating Margin   18.4%           28.2%          
YTD 2017 EPS   0.81   9%       1.15   6%      
                           
Total Software Revenue in millions of Euros   IFRS   Non-IFRS  
  YTD 2017   YTD 2016   Change in cc*   YTD 2017   YTD 2016   Change in cc*  
Americas   425.7   387.4   6%   428.9   388.4   7%  
Europe   578.1   540.5   7%   584.4   540.9   9%  
Asia   384.9   353.7   5%   385.5   354.0   5%  

*In constant currencies

                         
                           

Cash Flow and Other Financial Highlights

Net operating cash flow increased 32% to €592.5 million for the six months ended June 30, 2017, compared to €449.1 million for the 2016 First Half, reflecting higher net income and working capital improvements.

In the 2017 First Half, the Company uses of cash were principally for cash dividends of €51.3 million (based on the shareholders electing payment of the dividend in cash); share repurchases of €44.8 million; capital expenditures of €45.8 million and payments for acquisitions, net of cash acquired of €8.0 million and for acquisition of non-controlling interests of €14.1 million. The Company received cash for stock options exercised of €21.8 million.

Dassault Systèmes’ net financial position totaled €1.82 billion at June 30, 2017, compared to €1.49 billion at December 31, 2016, reflecting an increase in cash, cash equivalents and short-term investments from €2.49 billion to €2.82 billion, with long-term debt unchanged at €1.00 billion.

Summary of Recent Business, Technology and Customer Announcements

Customers

In a separate press release issued today, Dassault Systèmes announced that it has entered into a new, extended strategic partnership agreement with The Boeing Corporation. Pursuant to the agreement, Boeing will expand its deployment of Dassault Systèmes’ software across Boeing’s commercial aviation, space and defense programs to include Dassault Systèmes’ 3DEXPERIENCE platform. This decision follows a competitive process that included the rigorous analysis of technical and functional capabilities, cost and business benefits across the value chain. The 3DEXPERIENCE platform can reduce integration and support costs, improve productivity, foster new innovation, and aid in the introduction of best practice processes to deliver standard work across the value chain. The 3DEXPERIENCE platform cannot only simulate products and processes, but also find and eliminate potential risks and quality issues before production. The platform’s single source of data across all applications will provide reliable and actionable real-time information and seamless communication throughout the entire enterprise and supply chain as well as across product generations. This digital continuity will improve data and analytics capabilities.

On June 22, 2017 Dassault Systèmes and the Aviation Industry Corporation of China (AVIC) jointly announced the signing of a contract to establish a Sino-French Industry Joint Innovation Center that will operate across the complex system lifecycle specific to the aviation industry and its entire industrial chain. Dassault Systèmes and AVIC will strive to make the center an important contributor of the "Made in China 2025" and “Industrie du Futur” cooperation framework through sustained investment by both companies. The Sino-French Industry Joint Innovation Center will be located in the China Aviation Industry Science and Technology Park of Zhongguancun, Beijing.

Investments

On June 20, 2017, Dassault Systèmes announced that it had acquired a majority stake in Outscale, a leader in enterprise-class cloud services, thereby strengthening the Company’s position to provide an extensive cloud software offer in its market. Founded in France in 2010, Outscale is an ISO/IEC 27001:2013 security certified company that provides enterprise-class cloud computing infrastructure services (IaaS) to customers through its ten data centers in Europe, North America and Asia. With this investment, Dassault Systèmes is now able to adjust and control its cloud resources and services to manage peaks in activity, further diversify its industry segments, deploy new features, and provide advanced on premise, private and hybrid cloud solutions for its customers. The acquisition does not have an impact on the Company’s revenues as it was the principal customer of Outscale prior to this acquisition.

On June 12, 2017 Dassault Systèmes announced the signing of a definitive agreement to acquire AITAC BV, a Dutch company specialized in marine and offshore engineering software. With this acquisition, Dassault Systèmes will further strengthen its solutions designed to bring digital transformation to the marine and offshore industry by providing cutting-edge, industry-specific technologies for its 3DEXPERIENCE platform customers. AITAC’s Smart Drawings software application is used by shipyards and offshore companies to automate the creation of drawings from a master 3D model of a ship, platform or other structure designed using Dassault Systèmes’ CATIA applications.

Products and Industry Solution Experiences

On June 27, 2017, Dassault Systèmes announced that it is working with PSA Retail, the leading automotive distributor in France and second-leading in Europe, and the automotive distribution arm of PSA, to help it transform the customer car buying journey with a compelling digital in-store automotive dealership experience. PSA Retail is using Dassault Systèmes’ “Virtual Garage” industry solution experience to create a digital in-store retail format that infuses high-end digital visualization into the physical showroom sales process.

On June 8, 2017 the Company announced a renewed agreement with Rockwell Collins to extend their PLM journey using the 3DEXPERIENCE platform. Rockwell Collins is a pioneer in the development and deployment of innovative aviation and high-integrity solutions for both commercial and government applications. Rockwell Collins is currently deploying ENOVIA and EXALEAD applications from Dassault Systèmes’ “Co-Design to Target” industry solution experience to build a PLM environment for its engineering and technology sectors around the world. Rockwell Collins invested in Dassault Systèmes’ technologies to improve collaboration across its research, development and manufacturing processes, streamline workflows and change management, and help to reduce management costs for increasingly complex systems. Dassault Systèmes’ solution operates seamlessly on a secure government cloud environment, a vital requirement for Rockwell Collins.

Business Outlook

Thibault de Tersant, Senior Executive Vice President, CFO, commented, “During the second quarter, we delivered our key financial metrics - software, new licenses revenue, earnings per share - at the high end of our guidance and reported a strong operational cash flow increase. The signing of the extended strategic partnership with Boeing was a remarkable milestone. Its ramp-up, starting in 2018, should drive revenue growth for several years and represents a key inflection point in 3DEXPERIENCE adoption by the market.

“Looking forward, we are reconfirming for 2017 our constant currencies objectives for total revenue growth of 6% to 7%, new licenses revenue growth of 8% to 10%, which implies a two-digit new licenses revenue growth in the second half of 2017, and recurring revenue growth of about 6%, with the year as a whole reflecting further strengthening of our competitive positioning.

“While maintaining the revenue and new license growth rate of our objectives, excluding currency impact, we are reflecting the recent strengthening of the euro against all our major currencies, leading to a reduction of our reported revenue range of €50 million. While preserving our investments, we managed to keep our margin target unchanged at around 31.5% and reflected the reduction of reported revenue on EPS.” (All figures on a non-IFRS basis.)

The Company’s third quarter and full year 2017 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 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 €99 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 July 25, 2017.

Today’s Webcast and Conference Call Information

Today, Tuesday, July 25, 2017, Dassault Systèmes will first host from Paris a webcasted meeting at 9:00 AM London time/ 10:00 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 one 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

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.

In preparing such forward-looking statements, the Company has in particular assumed an average US dollar to euro exchange rate of US$1.15 per €1.00 for the 2017 third quarter and US$1.12 per €1.00 for the full year 2017 as well as an average Japanese yen to euro exchange rate of JPY130 to €1.00 for the third quarter and JPY125.9 to €1.00 for the full year 2017 before hedging; however, currency values fluctuate, and the Company’s results of operations may be significantly affected by changes in exchange rates.

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 2016 Document de Référence filed with the AMF on March 22, 2017.

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 220,000 customers of all sizes, in all industries, in more than 140 countries. For more information, visit www.3ds.com.

3DEXPERIENCE, the Compass logo and the 3DS logo, CATIA, SOLIDWORKS, ENOVIA, DELMIA, SIMULIA, GEOVIA, EXALEAD, 3D VIA, BIOVIA, NETVIBES and 3DEXCITE 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.

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   Six months ended  
     

June 30,
2017

 

June 30,
2016

  Change  

Change
in cc*

 

June 30,
2017

 

June 30,
2016

  Change  

Change
in cc*

 
Non-IFRS Revenue       € 810.6   € 754.0   8%   6%   € 1,576.3   € 1,447.5   9%   7%  
                                       
Non-IFRS Revenue breakdown by activity                                  
Software revenue       722.7   669.4   8%   7%   1,398.8   1,283.3   9%   7%  
of which new licenses and other software-related revenue       211.8   194.5   9%   8%   384.8   354.7   8%   7%  
of which periodic licenses, maintenance       510.9   474.9   8%   6%   1,014.0   928.6   9%   7%  
Services revenue       87.9   84.6   4%   3%   177.5   164.2   8%   7%  
                                       
Non-IFRS software revenue breakdown by product line                          
CATIA software revenue       249.7   244.0   2%   1%   486.2   465.5   4%   3%  
ENOVIA software revenue       84.4   81.7   3%   2%   158.0   152.6   4%   2%  
SOLIDWORKS software revenue       176.7   152.2   16%   14%   350.9   303.7   16%   13%  
Other software revenue       211.9   191.5   11%   9%   403.7   361.5   12%   9%  
                                       
Non-IFRS Revenue breakdown by geography                              
Americas       258.1   232.9   11%   8%   493.9   449.3   10%   6%  
Europe       337.1   320.2   5%   6%   660.1   613.2   8%   8%  
Asia       215.4   200.9   7%   5%   422.3   385.0   10%   6%  
                                       
Non-IFRS operating income       € 243.8   € 229.2   6%       € 444.5   € 410.9   8%      
Non-IFRS operating margin       30.1%   30.4%           28.2%   28.4%          
Non-IFRS net income attributable to shareholders       € 159.4   € 146.3   9%       € 295.1   € 277.4   6%      
Non-IFRS diluted net income per share       € 0.62   € 0.57   9%       € 1.15   € 1.08   6%      
Closing headcount       15,456   14,310   8%       15,456   14,310   8%      
                                       
Average Rate USD per Euro       1.10   1.13   -3%       1.08   1.12   -4%      
Average Rate JPY per Euro       122.6   121.9   1%       121.8   124.4   -2%      

* 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   Six months ended  
 

June 30,
2017

 

June 30
2016

 

June 30,
2017

 

June 30,
2016

 
         
New licenses and Other software revenue   211.8   194.5   384.8   354.1  
Periodic and Maintenance revenue   506.7   474.9   1,003.9   927.5  
Software revenue   718.5   669.4   1,388.7   1,281.6  
Services revenue   87.9   84.6   177.5   163.8  
Total Revenue   € 806.4   € 754.0   € 1,566.2   € 1,445.4  

Cost of software revenue (excluding amortization
of acquired intangibles)

  (38.0)   (37.7)   (78.4)   (75.2)  
Cost of services and other revenue   (79.0)   (78.7)   (161.8)   (155.8)  
Research and development   (156.2)   (138.7)   (305.9)   (269.2)  
Marketing and sales   (258.5)   (232.2)   (518.3)   (460.0)  
General and administrative   (61.5)   (56.0)   (121.8)   (110.4)  
Amortization of acquired intangibles   (39.3)   (38.2)   (80.5)   (77.4)  
Other operating income and expense, net   (4.5)   (11.1)   (10.6)   (13.5)  
Total Operating Expenses   (637.0)   (592.6)   (1,277.3)   (1,161.5)  
Operating Income   € 169.4   € 161.4   € 288.9   € 283.9  
Financial revenue and other, net   15.3   (7.6)   22.5   (16.8)  
Income before income taxes   184.7   153.8   311.4   267.1  
Income tax expense   (61.8)   (50.9)   (102.1)   (73.5)  
Net Income   € 122.9   € 102.9   € 209.3   € 193.6  
Non-controlling interest   0.1   (1.6)   (1.3)   (2.4)  

Net Income attributable to equity holders of
the parent

  € 123.0   € 101.3   € 208.0   € 191.2  
Basic net income per share   0.48   0.40   0.82   0.75  
Diluted net income per share   € 0.48   € 0.39   € 0.81   € 0.74  

Basic weighted average shares outstanding (in
millions)

  254.5   253.8   254.2   253.8  

Diluted weighted average shares outstanding (in
millions)

  257.9   257.3   257.1   257.3  
                   

IFRS revenue variation as reported and in constant currencies

 
       

 

 
           
    Three months ended June 30, 2017   Six months ended June 30, 2017  
    Change*   Change in cc**   Change*   Change in cc**  
IFRS Revenue   7%   6%   8%   6%  
IFRS Revenue by activity                  
Software revenue   7%   6%   8%   6%  
Services Revenue   4%   3%   8%   7%  
IFRS Software Revenue by product line              
CATIA software revenue   2%   1%   4%   3%  
ENOVIA software revenue   3%   2%   4%   2%  
SOLIDWORKS software revenue   16%   14%   16%   13%  
Other software revenue   8%   7%   9%   7%  
IFRS Revenue by geography                  
Americas   10%   7%   9%   6%  
Europe   4%   5%   7%   7%  
Asia   7%   5%   10%   6%  

*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  

June 30,
2017

 

December 31,
2016

 
     
           
ASSETS          
Cash and cash equivalents   2,769.2   2,436.7  
Short-term investments   48.2   56.1  
Accounts receivable, net   610.3   820.4  
Other current assets   264.2   257.2  
Total current assets   3,691.9   3,570.4  
Property and equipment, net   156.7   135.4  
Goodwill and Intangible assets, net   2,770.6   2,926.5  
Other non-current assets   286.5   310.7  
Total Assets   € 6,905.7   € 6,943.0  
LIABILITIES AND SHAREHOLDERS' EQUITY          
Accounts payable   137.3   144.9  
Unearned revenues   928.7   853.1  
Other current liabilities   501.0   467.6  
Total current liabilities   1,567.0   1,465.6  
Long-term debt   1,000.0   1,000.0  
Other non-current obligations   545.5   594.6  
Total long-term liabilities   1,545.5   1,594.6  
Non-controlling interests   2.5   22.6  
Parent shareholders' equity   3,790.7   3,860.2  
Total Liabilities and Shareholders' equity   € 6,905.7   € 6,943.0  
           

DASSAULT SYSTEMES

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (IFRS)

(unaudited; in millions of Euros)

 
In millions of Euros  

Three months ended

  Six months ended  
 

June 30,
2017

 

June 30,
2016

  Change  

June 30,
2017

 

June 30,
2016

  Change  
Net Income attributable to equity holders of the parent   123.0   101.3   21.7   208.0   191.2   16.8  
Non-controlling interest   (0.1)   1.6   (1.7)   1.3   2.4   (1.1)  
Net Income   122.9   102.9   20.0   209.3   193.6   15.7  
Depreciation of property & equipment   11.1   10.9   0.2   22.9   21.4   1.5  
Amortization of intangible assets   41.3   40.5   0.8   84.6   81.7   2.9  
Other non cash P&L Items   2.6   0.5   2.1   10.4   (8.8)   19.2  
Changes in working capital   66.7   (15.0)   81.7   265.2   161.2   104.0  
Net Cash provided by operating activities   € 244.6   € 139.8   € 104.8   € 592.4   € 449.1   € 143.3  
                           
Additions to property, equipment and intangibles   (27.4)   (9.6)   (17.8)   (45.8)   (18.4)   (27.4)  
Payments for acquisition of businesses, net of cash acquired   (7.6)   (11.2)   3.6   (8.0)   (11.2)   3.2  
Sale (purchase) of short term investments, net   12.5   (1.0)   13.5   3.7   19.8   (16.1)  
Investments, loans and others   -   (0.5)   0.5   6.4   0.6   5.8  
Net Cash provided by (used in) investing activities   (€ 22.5)   (€ 22.3)   (€ 0.2)   (€ 43.7)   (€ 9.2)   (€ 34.5)  
                           
Acquisition of non-controlling interests   (14.1)   -   (14.1)   (14.1)   -   (14.1)  
(Purchase) Sale of treasury stock   (47.9)   (9.0)   (38.9)   (44.8)   (43.3)   (1.5)  
Proceeds from exercise of stock-options   16.5   7.3   9.2   21.8   10.5   11.3  
Cash dividend paid   (51.3)   (100.1)   48.8   (51.3)   (101.9)   50.6  
Net Cash provided by (used in) financing activities   (€ 96.8)   (€ 101.8)   € 5.0   (€ 88.4)   (€ 134.7)   € 46.3  
                           

Effect of exchange rate changes on
cash and cash equivalents

  (121.5)   28.1   (149.6)   (127.8)   0.1   (127.9)  
                           
Increase (decrease) in cash and cash equivalents   € 3.8   € 43.8   (€ 40.0)   € 332.5   € 305.3   € 27.2  
                           
Cash and cash equivalents at beginning of period   € 2,765.4   € 2,542.0       € 2,436.7   € 2,280.5      
Cash and cash equivalents at end of period   € 2,769.2   € 2,585.8       € 2,769.2   € 2,585.8      
                           

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, 2016 filed with the AMF on March 22, 2017. 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 June 30,   Change  
 

2017 IFRS

 

Adjustment (1)

  2017 non-IFRS   2016 IFRS   Adjustment (1)   2016 non-IFRS   IFRS   Non-IFRS (2)  
                 
Total Revenue   € 806.4   € 4.2   € 810.6   € 754.0       € 754.0   7%   8%  
Total Revenue breakdown by activity                                  
Software revenue   718.5   4.2   722.7   669.4       669.4   7%   8%  
New licenses and Other software revenue   211.8       211.8   194.5       194.5   9%      
Periodic and Maintenance revenue   506.7   4.2   510.9   474.9       474.9   7%   8%  
Recurring portion of Software revenue   71%       71%   71%       71%          
Services revenue   87.9       87.9   84.6       84.6   4%      
Total Software Revenue breakdown by product line                                  
CATIA software revenue   249.7       249.7   244.0       244.0   2%   2%  
ENOVIA software revenue   84.4       84.4   81.7       81.7   3%   3%  
SOLIDWORKS software revenue   176.7       176.7   152.2       152.2   16%   16%  
Other software revenue   207.7   4.2   211.9   191.5       191.5   8%   11%  
Total Revenue breakdown by geography                                  
Americas   256.8   1.3   258.1   232.9       232.9   10%   11%  
Europe   334.4   2.7   337.1   320.2       320.2   4%   5%  
Asia   215.2   0.2   215.4   200.9       200.9   7%   7%  
Total Operating Expenses   (€ 637.0)   € 70.2   (€ 566.8)   (€ 592.6)   € 67.8   (€ 524.8)   7%   8%  
Share-based compensation expense   (26.4)   26.4   -   (18.5)   18.5   -          
Amortization of acquired intangibles   (39.3)   39.3   -   (38.2)   38.2   -          
Other operating income and expense, net   (4.5)   4.5   -   (11.1)   11.1   -          
Operating Income   € 169.4   € 74.4   € 243.8   € 161.4   € 67.8   € 229.2   5%   6%  
Operating Margin   21.0%       30.1%   21.4%       30.4%          
Financial revenue & other, net   15.3   (16.0)   (0.7)   (7.6)   6.4   (1.2)   -301%   -42%  
Income tax expense   (61.8)   (22.0)   (83.8)   (50.9)   (29.2)   (80.1)   21%   5%  
Non-controlling interest   0.1       0.1   (1.6)       (1.6)   -106%   -106%  
Net Income attributable to shareholders   € 123.0   € 36.4   € 159.4   € 101.3   € 45.0   € 146.3   21%   9%  
Diluted Net Income Per Share (3)   € 0.48   € 0.14   € 0.62   € 0.39   € 0.18   € 0.57   23%   9%  

(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.

 
    Three months ended June 30,  
In millions of Euros   2017 IFRS   Adjustment  

2017
non-IFRS

  2016 IFRS   Adjustment  

2016
non-IFRS

 
Cost of revenue   (117.0)   1.3   (115.7)   (116.4)   0.8   (115.6)  
Research and development   (156.2)   11.1   (145.1)   (138.7)   7.4   (131.3)  
Marketing and sales   (258.5)   8.8   (249.7)   (232.2)   6.6   (225.6)  
General and administrative   (61.5)   5.2   (56.3)   (56.0)   3.7   (52.3)  
Total share-based compensation expense       € 26.4           € 18.5      

(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 257.9 million diluted shares for Q2 2017 and 257.3 million diluted shares for Q2 2016.

 

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, 2016 filed with the AMF on March 22, 2017. 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   Six months ended June 30,   Change  
  2017
IFRS
 

Adjustment
(1)

  2017
non-IFRS
  2016
IFRS
 

Adjustment
(1)

  2016
non-IFRS
  IFRS  

Non-IFRS
(2)

 
Total Revenue   € 1,566.2   € 10.1   € 1,576.3   € 1,445.4   € 2.1   € 1,447.5   8%   9%  
Total Revenue breakdown by activity                                  
Software revenue   1,388.7   10.1   1,398.8   1,281.6   1.7   1,283.3   8%   9%  
New licenses and Other software revenue   384.8       384.8   354.1   0.6   354.7   9%   8%  
Periodic and Maintenance revenue   1,003.9   10.1   1,014.0   927.5   1.1   928.6   8%   9%  
Recurring portion of Software revenue   72%       72%   72%       72%          
Services revenue   177.5       177.5   163.8   0.4   164.2   8%   8%  
Total Software Revenue breakdown by product line                                  
CATIA software revenue   486.2       486.2   465.5       465.5   4%   4%  
ENOVIA software revenue   158.0       158.0   152.6       152.6   4%   4%  
SOLIDWORKS software revenue   350.9       350.9   303.7       303.7   16%   16%  
Other software revenue   393.6   10.1   403.7   359.8   1.7   361.5   9%   12%  
Total Revenue breakdown by geography                                  
Americas   490.7   3.2   493.9   448.2   1.1   449.3   9%   10%  
Europe   653.8   6.3   660.1   612.6   0.6   613.2   7%   8%  
Asia   421.7   0.6   422.3   384.6   0.4   385.0   10%   10%  
Total Operating Expenses   (€ 1,277.3)   € 145.5   (€ 1,131.8)   (€ 1,161.5)   € 124.9   (€ 1,036.6)   10%   9%  
Share-based compensation expense   (54.4)   54.4   -   (34.0)   34.0   -          
Amortization of acquired intangibles   (80.5)   80.5   -   (77.4)   77.4   -          
Other operating income and expense, net   (10.6)   10.6   -   (13.5)   13.5   -          
Operating Income   € 288.9   € 155.6   € 444.5   € 283.9   € 127.0   € 410.9   2%   8%  
Operating Margin   18.4%       28.2%   19.6%       28.4%          
Financial revenue & other, net   22.5   (22.7)   (0.2)   (16.8)   11.8   (5.0)   -234%   -96%  
Income tax expense   (102.1)   (45.8)   (147.9)   (73.5)   (52.6)   (126.1)   39%   17%  
Non-controlling interest   (1.3)       (1.3)   (2.4)       (2.4)   -46%   -46%  
Net Income attributable to shareholders   € 208.0   € 87.1   € 295.1   € 191.2   € 86.2   € 277.4   9%   6%  
Diluted Net Income Per Share (3)   € 0.81   € 0.34   € 1.15   € 0.74   € 0.34   € 1.08   9%   6%  

(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.

 
    Six months ended June 30,  
In millions of Euros   2017 IFRS   Adjustment   2017
non-IFRS
  2016 IFRS   Adjustment   2016
non-IFRS
 
Cost of revenue   (240.2)   2.3   (237.9)   (231.0)   1.4   (229.6)  
Research and development   (305.9)   22.9   (283.0)   (269.2)   13.9   (255.3)  
Marketing and sales   (518.3)   18.1   (500.2)   (460.0)   11.8   (448.2)  
General and administrative   (121.8)   11.1   (110.7)   (110.4)   6.9   (103.5)  
Total share-based compensation expense       € 54.4           € 34.0      

(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 257.1 million diluted shares for H1 2017 and 257.3 million diluted shares for H1 2016.

 

 



Contact:

Dassault Systèmes:
François-José Bordonado/Béatrix Martinez, +33.1.61.62.69.24
or
United States and Canada:
Email Contact
or
FTI Consulting:
Rob Mindell, +44.20.3727.1000
or
Arnaud de Cheffontaines, +33.1.47.03.69.48