DS Reports Second Quarter 2009 Financial Results At High End of Company Objectives
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DS Reports Second Quarter 2009 Financial Results At High End of Company Objectives

PARIS — (BUSINESS WIRE) — July 29, 2009 Dassault Systèmes (DS) (Paris: DSY) (Euronext Paris: #13065, DSY.PA) reports IFRS unaudited financial results for the second quarter and first half ended June 30, 2009. These results have been reviewed by the Company’s Board of Directors.

Summary Financial Highlights
(unaudited)

Second Quarter 2009 Financial Summary

 
In millions of Euros, except per share data   IFRS   Non-IFRS
        Growth   Growth in cc*       Growth   Growth in cc*
Q2 Total Revenue   310.9   (5%)   (11%)   311.2   (5%)   (11%)
Q2 Software Revenue   271.3   (2%)   (9%)   271.6   (2%)   (9%)
Q2 EPS   0.22   (39%)       0.37   (20%)    
Q2 Operating Margin   13.6%           21.9%        

*In constant currencies.

Bernard Charlès, Dassault Systèmes President and Chief Executive Officer, commented, “The second quarter unfolded as anticipated. Revenue, margin and earnings results came in at the high end of our objectives, thanks to continued strong interest in DS solutions across a diversified number of industries, and to our cost savings program which is being implemented without impacting our R&D and sales capacities.

“On balance, business conditions during the second quarter were similar to the first quarter with customers remaining cautious with respect to new business investments. We started to see some increase in activity among larger companies, for which design excellence, simulation and compliance were significant drivers. For smaller companies, in general, it was not the case as we observed some slight further weakening from the first three months of the year.

“We are dedicated to the success of our customers with our investments in R&D. In June, we introduced Version 6 Release 2010 for the PLM market. We are just at the start of the adoption ramp of our V6 platform and software solutions and are therefore pleased by the number of wins we are seeing with more than 130 companies to date, representing the apparel, aerospace, automotive, energy, life sciences and high tech industries, among others.

“This quarter, we obtained a milestone decision, with Renault Group selecting our V6 PLM solution, which will be deployed as their global collaborative innovation platform for all functions involved in engineering and product development, thus replacing legacy PDM and reducing Renault Group’s cost of operations.

“In the Mainstream market, SolidWorks 2010 is set to be released in the fall of 2009 as scheduled. This latest release is uniquely positioned to offer users the ability to easily evaluate design and material alternatives for sustainable product development.”

Second Quarter 2009 Financial Review

           
In millions of Euros IFRS   Non-IFRS
    Q2 2009   Q2 2008   Growth in cc*   Q2 2009   Q2 2008   Growth in cc*
Total Revenue   310.9   326.2   (11%)   311.2   326.2   (11%)
Software Revenue   271.3   278.0   (9%)   271.6   278.0   (9%)
Services and other Revenue   39.6   48.2   (24%)   39.6   48.2   (24%)
PLM software Revenue   206.5   211.6   (9%)   206.8   211.6   (9%)
Mainstream 3D software Revenue   64.8   66.4   (10%)   64.8   66.4   (10%)
                         
Americas   96.5   95.9   (12%)   96.6   95.9   (12%)
Europe   144.2   157.1   (8%)   144.2   157.1   (8%)
Asia   70.2   73.2   (18%)   70.4   73.2   (18%)

*In constant currencies.

Looking at financial results on a sequential basis,

First Half 2009 Financial Summary

           
In millions of Euros, except per share data IFRS   Non-IFRS
        Growth   Growth in cc*       Growth   Growth in cc*
H1 2009 Total Revenue   620.6   (2%)   (9%)   621.9   (2%)   (9%)
H1 2009 Software Revenue   543.1   (1%)   (7%)   544.4   (1%)   (7%)
H1 2009 EPS   0.46   (45%)**       0.74   (15%)    
H1 2009 Operating Margin   13.3%           20.7%        

*In constant currencies. 
**In the 2008 First Half DS recorded a €17 million (€0.13 per share) gain on sale for its prior corporate headquarters facility in other operating income and expense, net.

           
In millions of Euros IFRS   Non-IFRS
    H1 2009   H1 2008   Growth in cc*   H1 2009   H1 2008   Growth in cc*
Total Revenue   620.6   633.6   (9%)   621.9   634.1   (9%)
Software Revenue   543.1   547.1   (7%)   544.4   547.6   (7%)
Services and other Revenue   77.5   86.5   (16%)   77.5   86.5   (16%)
PLM software Revenue   407.2   413.5   (8%)   408.5   414.0   (8%)
Mainstream 3D software Revenue   135.9   133.6   (6%)   135.9   133.6   (6%)
                         
Americas   193.9   189.8   (11%)   194.4   190.0   (11%)
Europe   281.8   295.8   (4%)   281.9   296.0   (4%)
Asia   144.9   148.0   (15%)   145.6   148.1   (15%)

*In constant currencies.

IFRS and non-IFRS total revenue was lower by approximately 2% as reported and 9% in constant currencies. Revenue growth rates on a reported basis benefited from the strengthening of both the US dollar and the Japanese yen during the first half of 2009 compared to the 2008 First Half which helped mitigate the impact of lower activity.

Revenue distribution by geographic region in the 2009 First Half remained similar to that of the same period in 2008. As a percentage of total revenue, Europe represented 46% (47% in 2008 First Half), the Americas accounted for 31% (30% in 2008 First Half) and Asia represented 23% (23% in 2008 First Half).

For the 2009 First Half, IFRS and non-IFRS software revenue was lower by approximately 1% as reported and 7% in constant currencies, reflecting periodic licenses, maintenance, and product development revenue growth of 11% which was largely offset by a decrease in new licenses revenue of 38% (all figures in constant currencies except as noted).

Non-IFRS recurring software revenue, comprised of periodic licenses and maintenance revenue, increased 10% in constant currencies and totaled €407.8 million for the 2009 First Half, compared to €345.6 million in the 2008 First Half. Recurring software revenue represented 75% of total software revenue in the 2009 First Half and 63% in the 2008 First Half.

Software revenue growth trends were similarly impacted in both the PLM and Mainstream segments of the Company’s business with a significant decrease in new license revenue activity offset in part by growth in periodic licenses and maintenance revenue.

IFRS net income per diluted share decreased 45.2% principally reflecting the year-over-year decrease in revenue as well as the year-ago benefit from the gain on sale of part of the Company’s prior corporate headquarters facility. Non-IFRS net income per diluted share decreased 14.9%, principally reflecting lower revenue activity.

Cash Flow and Other Financial Highlights

IFRS net operating cash flow was €81.0 million and €177.3 million for the second quarter and first half ended June 30, 2009, respectively.

Cash and short-term investments totaled €932.8 million at June 30, 2009, compared to €840.4 million at December 31, 2008. The Company’s net financial position amounted to €732.6 million at June 30, 2009, net of outstanding debt consisting of €200.2 million of financial long-term debt. During the second quarter 2009, the Company paid cash dividends totaling €54.8 million.

Annual Shareholders’ Meeting Approved Cash Dividend Payment

The Annual Shareholders’ Meeting was held on June 9, 2009. At the meeting shareholders approved for the fiscal year ended December 31, 2008 the payment of an annual cash dividend equivalent to €0.46 per share, equal to the prior year. The Company has consistently paid annual cash dividends since its initial public offering in 1996. The cash dividend was paid on June 25, 2009.

Key Business and Corporate Highlights

Renault Chooses DS Full V6 PLM to Improve the Company’s Productivity and Product Quality. Renault has selected Dassault Systèmes’ V6 PLM as its new global product development solution, in order to improve productivity, and product quality. Renault has already started to implement the ENOVIA V6 based collaborative platform and CATIA V6, and will rapidly move to the full DS V6 portfolio to enable the company and its suppliers to collaborate on the creation of new product designs in real time.

Piaggio Aero Selects DS V6 for Global Product Development. Piaggio Aero Industries, one of the world’s most prestigious aircraft manufacturers, has selected DS V6 as its global product development platform including all required applications to support the company’s business needs and industry leadership strategy. Piaggio Aero Industries is implementing the ENOVIA V6 platform and DS PLM applications including ENOVIA and CATIA to enable the company and its core risk-sharing partners to collaborate on the creation of new product designs in real time.

ELDO Selects DS PLM Solutions for its Italian Fashion Label, FREESOUL. Eldo S.r.l, a Florence, Italy-based holding company, has selected Dassault Systèmes’ ENOVIA Apparel Accelerator for Design and Development to rapidly bring new clothing lines for its FREESOUL brand of denim products to the market. Launched in 1994, FREESOUL is one of Europe’s top denim fashion brands.

Wittur Group Standardizes on SolidWorks Enterprise PDM to Create Global Collaboration Network of Designers. The Wittur Group has selected SolidWorks Enterprise PDM for document and workflow management to unify and organize its global offices more transparently. Its goals are improved teamwork between designers, optimized development processes, and more secure and efficient data management through a consolidated database.

Sanjel Corp. Slashes Development Time with SolidWorks 3D CAD and Simulation Software. In developing the custom cementing unit, Sanjel is using SolidWorks’ simulation software to ensure it is rugged enough to withstand being loaded up onto the back of a winch truck, being lifted onto a cargo ship by crane, sustaining impacts from vehicles and machinery, and enduring conditions commonly encountered in the oilfield.

DS Launches V6R2010. On June 23rd, DS announced the launch of its Version 6, Release 2010. Dassault Systèmes’ V6 collaborative platform has been widely adopted in industries including:

DS Reaffirms Its Position as the Leading Supplier of PLM Solutions to the Aerospace Industry. On June 15, 2009, DS made a series of customer announcements at Le Bourget International Air Show that reinforces the company’s position as the leading PLM provider for the Aerospace and Defense industry. Already recognized for working with the world’s Top 20 Aerospace Companies and the world’s major OEMs, Dassault Systèmes’ technology has become the standard for all new major aircraft programs.

DS SolidWorks Surpasses One Million Licenses. On April 30, 2009 DS SolidWorks announced that a cutting-edge athletic equipment company purchased the one millionth license of its 3D CAD software. In the 14 years between this landmark and DS SolidWorks’ first sale to a robotic arm designer, thousands of innovative products have been developed with SolidWorks software.

Business Outlook

Thibault de Tersant, Senior Executive Vice President and CFO, commented, “Our results for the second quarter confirm our realistic assessment of market conditions which we made at the time of our first quarter press release.

“With respect to operating profitability, our focus on cost containment is proceeding as planned, with over €55 million in cost savings realized during the first half of this year. We also continued with our broader goals of improving our operational efficiency across DS with shared services and co-location initiatives, all of which will bring additional benefits to DS as we move into 2010. Our progress quarter to quarter is evident in the sequential improvement in our non-IFRS operating margin. And, for the full year, we continue to target an operating margin of about 25% on a non-IFRS basis, unchanged from our previous goal.

“Looking ahead to the third quarter, we are assuming no change to business conditions and historical seasonal revenue patterns, leading to the assumption of a sequential decrease in revenue results in comparison to the second quarter. But with our ongoing cost actions, and based upon our revenue objective, we are targeting a stable to improving sequential performance from an earnings and operating margin perspectives for the third quarter.

“As we move into the second half of the year, we are narrowing our full year revenue objective range but otherwise holding the mid-point unchanged on a constant currency basis. Similarly we are narrowing our EPS objective range. Given the strengthening of the Euro we think it is appropriate to update our US dollar and Japanese yen exchange rates assumptions in comparison to the Euro, and therefore are adjusting our reported revenue range and earnings per share, accordingly.”

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 Company’s current objectives are the following:

The non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2009 currency exchange rates above: (i) deferred revenue write-downs estimated at approximately €1.4 million for 2009; (ii) share-based compensation expense estimated at approximately €22 million for 2009, and (iii) amortization of acquired intangibles estimated at approximately €40 million for 2009. The above objectives do not include any impact from other operating income and expense, net principally comprised of restructuring expenses. These estimates also do not include any new stock option or share grants, or any new acquisitions or restructurings completed after July 30, 2009.

Webcast and Conference Call Information

Dassault Systèmes will host an analyst meeting in Paris which will be webcasted and a conference call today, Thursday, July 30, 2009. Management will host the webcast at 8:30 AM London time/9:30 AM CET time and will then host the conference call at 9:00 AM New York time /2:00 PM London time/3:00 PM CET. The webcast and conference call will be available via the Internet by accessing http://www.3ds.com/company/finance/. Please go to the website at least fifteen 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.

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 DS 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. In preparing such forward-looking statements, the Company has in particular assumed an average U.S. dollar to euro exchange rate of US$1.42 per €1.00 and an average Japanese yen to euro exchange rate of JPY134 to €1.00 for the 2009 full year; however, currency values fluctuate, and the Company’s results of operations may be significantly affected by changes in exchange rates. The Company has tried to factor in the potential impact of the current global economic crisis on its 2009 third quarter and full year objectives, but conditions could worsen. Further the Company has assumed that its increased responsibility for both indirect and direct PLM sales channels, and the resulting commercial and management challenges, will not cause it to incur substantial unanticipated costs and inefficiencies. The Company’s actual results or performance may also be materially negatively affected by the current global economic crisis, difficulties or adverse changes affecting its partners or its relationships with its partners, including the Company’s longstanding, strategic partner, IBM; 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 Document de référence, as filed with the French “Autorité des marchés financiers” (AMF) on April 2, 2009, could materially affect the Company’s financial position or results of operations.

Non-IFRS Financial Information

Readers are cautioned that the supplemental non-IFRS (previously referred to as “adjusted 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, 2008 included in the Company’s 2008 Document de référence filed with the AMF on April 2, 2009.

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 and other income and expense, net (in each case, as explained respectively in the Company’s 2008 Document de référence). 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 "current" period have first been recalculated using the average exchange rates of the comparable period in the preceding year, and then compared with the results of the comparable period in the preceding year.

About Dassault Systèmes

As a world leader in 3D and Product Lifecycle Management (PLM) solutions, Dassault Systèmes brings value to more than 100,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systèmes develops and markets PLM application software and services that support industrial processes and provide a 3D vision of the entire lifecycle of products from conception to maintenance to recycling. The Dassault Systèmes portfolio consists of CATIA for designing the virtual product - SolidWorks for 3D mechanical design - DELMIA for virtual production - SIMULIA for virtual testing - ENOVIA for global collaborative lifecycle management, and 3DVIA for online 3D lifelike experiences. Dassault Systèmes’ shares are listed on Euronext Paris (#13065, DSY.PA) and Dassault Systèmes’ ADRs may be traded on the US Over-The-Counter (OTC) market (DASTY). For more information, visit http://www.3ds.com

CATIA, DELMIA, ENOVIA, SIMULIA, SolidWorks and 3DVIA 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, and other operating income and expense, net.

Comparable IFRS financial information and a reconciliation of the IFRS and non-IFRS measures are set forth in the proceeding tables.

  Three months ended   Six months ended
   

June 30,
2009

 

June 30,
2008

  Variation  

Variation
in cc*

 

June 30,
2009

 

June 30,
2008

  Variation  

Variation
in cc*

Non-IFRS Revenue € 311.2   € 326.2   (5%)   (11%)   € 621.9   € 634.1   (2%)   (9%)
 
Non-IFRS Revenue breakdown by activity
Software revenue 271.6 278.0 (2%) (9%) 544.4 547.6 (1%) (7%)
of which new licenses revenue 69.4 101.2 (31%) (36%) 134.0 201.9 (34%) (38%)

of which periodic licenses, maintenance and
 product development revenue

202.2 176.8 14% 6% 410.4 345.7 19% 11%
Services and other revenue 39.6 48.2 (18%) (24%) 77.5 86.5 (10%) (16%)
 
Recurring software revenue 200.8 176.9 14% 6% 407.8 345.6 18% 10%
 
Non-IFRS software revenue breakdown by product line
PLM software revenue 206.8 211.6 (2%) (9%) 408.5 414.0 (1%) (8%)
of which CATIA software revenue 117.9 126.6 (7%) (13%) 234.4 249.3 (6%) (12%)
of which ENOVIA software revenue 40.1 43.3 (7%) (15%) 74.2 81.6 (9%) (16%)
Mainstream 3D software revenue 64.8 66.4 (2%) (10%) 135.9 133.6 2% (6%)
 
Non-IFRS Revenue breakdown by geography
Americas 96.6 95.9 1% (12%) 194.4 190.0 2% (11%)
Europe 144.2 157.1 (8%) (8%) 281.9 296.0 (5%) (4%)
Asia   70.4   73.2   (4%)   (18%)   145.6   148.1   (2%)   (15%)
 
Non-IFRS operating income € 68.1 € 81.8 (17%) € 128.5 € 152.0 (15%)
Non-IFRS operating margin 21.9% 25.1% 20.7% 24.0%
Non-IFRS net income 43.9 55.0 (20%) 87.3 103.7 (16%)
Non-IFRS diluted net income per share   € 0.37   € 0.46   (20%)       € 0.74   € 0.87   (15%)    
Closing headcount   7,903   7,707   3%       7,903   7,707   3%    
 
Average Rate USD per Euro 1.36 1.56 (13%) 1.33 1.53 (13%)
Average Rate JPY per Euro   132.6   163.4   (19%)       127.3   160.6   (21%)    

*In constant currencies.

   

DASSAULT SYSTEMES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (IFRS)

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

 
Three months ended   Six months ended
June 30,   June 30, June 30,   June 30,
    2009   2008   2009   2008
New licenses revenue 69.4 101.2 134.0 201.9
Periodic licenses, maintenance and product development revenue 201.9   176.8   409.1   345.2
Software revenue 271.3 278.0 543.1 547.1
Services and other revenue 39.6   48.2   77.5   86.5
Total Revenue € 310.9 € 326.2 € 620.6 € 633.6
Cost of software revenue (excluding amortization of acquired intangibles) (14.1) (12.8) (28.1) (27.4)
Cost of services and other revenue (35.6) (38.9) (73.5) (74.5)
Research and development (80.3) (76.6) (162.4) (150.3)
Marketing and sales (91.5) (95.2) (185.4) (187.7)
General and administrative (28.0) (25.7) (56.8) (52.0)
Amortization of acquired intangibles (11.9) (9.0) (22.6) (18.6)
Other operating income and expense, net (7.1)   (2.5)   (9.2)   14.7
Total Operating Expenses (€ 268.5)   (€ 260.7)   (€ 538.0)   (€ 495.8)
Operating Income € 42.4 € 65.5 € 82.6 € 137.8
Financial revenue and other, net (4.5)   0.0   (4.2)   0.2
Income before income taxes 37.9 65.5 78.4 138.0
Income tax expense (12.2) (22.3) (23.9) (37.7)
Net Income 25.7 43.2 54.5 100.3
Minority interest (0.1)   (0.1)   (0.1)   (0.1)
Net Income attributable to shareholders € 25.6   € 43.1   € 54.4   € 100.2
Basic net income per share 0.22   0.37   0.46   0.86
Diluted net income per share € 0.22   € 0.36   € 0.46   € 0.84
Basic weighted average shares outstanding (in millions) 117.4   116.9   117.4   117.1
Diluted weighted average shares outstanding (in millions)   118.1   118.9   118.1   119.3
           

IFRS revenue variation as reported and in constant currencies

 
Three months ended June 30, 2009       Six months ended June 30, 2009
        Variation*       Variation in cc**       Variation*       Variation in cc**
IFRS Revenue (5%)       (11%) (2%)       (9%)
IFRS Revenue by activity
Software Revenue (2%) (9%) (1%) (7%)
Services and other Revenue (18%) (24%) (10%) (16%)
IFRS Software Revenue by product line
PLM software revenue (2%) (9%) (2%) (8%)
of which CATIA software revenue (7%) (13%) (6%) (12%)
of which ENOVIA software revenue (7%) (15%) (9%) (16%)
Mainstream 3D software revenue (2%) (10%) 2% (6%)
IFRS Revenue by geography
Americas 1% (12%) 2% (11%)
Europe (8%) (8%) (5%) (4%)
Asia       (4%)       (18%)       (2%)       (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)

 
June 30, December 31,
        2009       2008
 
ASSETS
Cash and cash equivalents 845.2 794.1
Short-term investments 87.6 46.3
Accounts receivable, net 269.1 329.4
Other current assets 79.5 138.4
Total current assets 1,281.4 1,308.2
Property and equipment, net 66.7 69.3
Goodwill and Intangible assets, net 690.8 722.0
Other non current assets 84.7       42.5
Total Assets       € 2,123.6       € 2,142.0
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable 73.7 70.1
Unearned revenues 246.9 250.7
Other current liabilities 166.5 202.2
Total current liabilities 487.1 523.0
Long-term debt 200.2 200.7
Other non current obligations 123.1 113.8
Total long-term liabilities 323.3 314.5
Minority interests 1.0 1.6
Shareholders' equity 1,312.2       1,302.9
Total Liabilities and Shareholders' equity       € 2,123.6       € 2,142.0
           

DASSAULT SYSTEMES

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (IFRS)

(unaudited; in millions of Euros)

 
   

June 30,
2009

 

June 30,
2008

  Variation  

June 30,
2009

 

June 30,
2008

  Variation
Net Income attributable to equity holders of the parent 25.6 43.1 (17.5) 54.4 100.2 (45.8)
Minority interest 0.1   0.1   0.0   0.1   0.1   0.0
Net Income 25.7 43.2 (17.5) 54.5 100.3 (45.8)
Depreciation and amortization of property & equipment 5.9 5.3 0.6 11.5 11.2 0.3
Amortization of intangible assets 12.5 10.1 2.4 24.6 20.7 3.9
Other non cash P&L Items 4.0 2.7 1.3 2.7 (13.8) 16.5
Changes in working capital 32.9   45.0   (12.1)   84.0   76.4   7.6
Net Cash provided by operating activities 81.0 106.3 (25.3) 177.3 194.8 (17.5)
 
Acquisition of assets and equity, net of cash acquired (10.4) (14.3) 3.9 (16.8) (24.6) 7.8
Sale of fixed assets 0.3 (0.2) 0.5 0.5 36.0 (35.5)
Purchase of short term investments, net (41.5) (58.2) 16.7 (42.1) (57.2) 15.1
Loans and others 0.2   0.5   (0.3)   0.0   0.3   (0.3)
Net Cash provided by (used in) investing activities (51.4) (72.2) 20.8 (58.4) (45.5) (12.9)
 
Borrowings 0.0 0.0 0.0 0.0 0.0 0.0
Share repurchase 0.0 0.0 0.0 0.0 (35.0) 35.0
DS stock option and preferred stock Exercise 0.2 19.1 (18.9) 0.5 23.3 (22.8)
Cash dividend paid (54.8) (53.7) (1.1) (54.8) (53.7) (1.1)
Payments on capital lease obligations 0.0   0.0   0.0   0.0   0.0   0.0
Net Cash provided by (used in) financing activities (54.6) (34.6) (20.0) (54.3) (65.4) 11.1
 
Effect of exchange rate changes on

cash and cash equivalents

(32.4) 0.4 (32.8) (13.5) (25.0) 11.5
                     
Increase in cash and cash equivalents   (57.4)   (0.1)   (57.3)   51.1   58.9   (7.8)
                         
Cash and cash equivalents at beginning of period 902.6 656.2 794.1 597.2
Cash and cash equivalents at end of period   845.2   656.1       845.2   656.1    
 

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, 2008 filed with the AMF on April 2, 2009. 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,   Variation
2009  

Adjustment

  2009   2008  

Adjustment

  2008   IFRS  

Non-IFRS

    IFRS  

(1)

  non-IFRS   IFRS  

(1)

  non-IFRS      

(2)

Total Revenue € 310.9 0.3 € 311.2 € 326.2 (5%) (5%)
 
Total Revenue breakdown by activity
Software revenue 271.3 0.3 271.6 278.0 (2%) (2%)
New Licenses 69.4 101.2 (31%)
Product Development 1.4 (0.1)
Periodic Licenses and Maintenance 200.5 0.3 200.8 176.9 13% 14%
Recurring portion of Software revenue 74% 74% 64%
Services and other revenue 39.6 48.2 (18%)
Total Software Revenue breakdown by product line
PLM software revenue 206.5 0.3 206.8 211.6 (2%) (2%)
of which CATIA software revenue 117.9 126.6 (7%)
of which ENOVIA software revenue 40.1 43.3 (7%)
Mainstream 3D software revenue 64.8 66.4 (2%)
 
Total Revenue breakdown by geography
Americas 96.5 0.1 96.6 95.9 1% 1%
Europe 144.2 157.1 (8%)
Asia   70.2   0.2   70.4   73.2           (4%)   (4%)
Total Operating Expenses (€ 268.5) 25.4 (€ 243.1) (€ 260.7) 16.3 (€ 244.4) 3% (1%)
Stock-based compensation expense (6.4) 6.4 - (4.8) 4.8 - - -
Amortization of acquired intangibles (11.9) 11.9 - (9.0) 9.0 - - -
Other operating income and expense, net   (7.1)   7.1   -   (2.5)   2.5   -   -   -
Operating Income € 42.4 25.7 € 68.1 € 65.5 16.3 € 81.8 (35%) (17%)
Operating Margin 13.6% 21.9% 20.1% 25.1%
Income before Income Taxes 37.9 25.7 63.6 65.5 16.3 81.8 (42%) (22%)
Income tax expense (12.2) (7.4) (19.6) (22.3) (4.4) (26.7) - -
Income tax effect of adjustments above (7.4) 7.4 - (4.4) 4.4 - - -
Minority interest (0.1) (0.1) -
Net Income attributable to shareholders € 25.6 18.3 € 43.9 € 43.1 11.9 € 55.0 (41%) (20%)
Diluted Net Income Per Share (3)   € 0.22   0.15   € 0.37   € 0.36   0.10   € 0.46   (39%)   (20%)

(1) In the reconciliation schedule above, (i) all non-IFRS adjustments to IFRS revenue data reflect the exclusion of the deferred revenue adjustment; (ii) non-IFRS adjustments to operating expense data reflect the exclusion of the amortization of acquired intangibles, other operating income and expense, net and stock-based compensation expense (as detailed below); and (iii) all non-IFRS adjustments to IFRS net income data reflect the combined effect of these non-IFRS adjustments.

  Three months ended June 30,
In millions of Euros   2009 IFRS   Adjustment  

2009
non-IFRS

  2008 IFRS   Adjustment  

2008
non-IFRS

Cost of services and other revenue (35.6)   0.2   (35.4)   (38.9)   0.2   (38.7)
Research and development (80.3) 3.7 (76.6) (76.6) 2.8 (73.8)
Marketing and sales (91.5) 1.3 (90.2) (95.2) 0.9 (94.3)
General and administrative (28.0) 1.2 (26.8) (25.7) 0.9 (24.8)
Total stock-based compensation expense       6.4           4.8    

(2) The non-IFRS percentage increase (decrease) compares non-IFRS measures for the two different periods. In the event there is a 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 118.1 million diluted shares for Q2 2009 and 118.9 million diluted shares for Q2 2008.

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, 2008 filed with the AMF on April 2, 2009. 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,   Variation
2009  

Adjustment

  2009   2008  

Adjustment

  2008   IFRS  

Non-IFRS

    IFRS  

(1)

  non-IFRS   IFRS  

(1)

  non-IFRS      

(2)

Total Revenue € 620.6 1.3 € 621.9 € 633.6 0.5 € 634.1 (2%) (2%)
 
Total Revenue breakdown by activity
Software revenue 543.1 1.3 544.4 547.1 0.5 547.6 (1%) (1%)
New Licenses 134.0 201.9 (34%)
Product Development 2.6 0.1
Periodic Licenses and Maintenance 406.5 1.3 407.8 345.1 0.5 345.6 18% 18%
Recurring portion of Software revenue 75% 75% 63% 63%
Services and other revenue 77.5 86.5 (10%)
Total Software Revenue breakdown by product line
PLM software revenue 407.2 1.3 408.5 413.5 0.5 414.0 (2%) (1%)
of which CATIA software revenue 234.4 249.0 0.3 249.3 (6%) (6%)
of which ENOVIA software revenue 74.2 81.4 0.2 81.6 (9%) (9%)
Mainstream 3D software revenue 135.9 133.6 2%
 
Total Revenue breakdown by geography
Americas 193.9 0.5 194.4 189.8 0.2 190.0 2% 2%
Europe 281.8 0.1 281.9 295.8 0.2 296.0 (5%) (5%)
Asia   144.9   0.7   145.6   148.0   0.1   148.1   (2%)   (2%)
Total Operating Expenses (€ 538.0) 44.6 (€ 493.4) (€ 495.8) 13.7 (€ 482.1) 9% 2%
Stock-based compensation expense (12.8) 12.8 - (9.8) 9.8 - - -
Amortization of acquired intangibles (22.6) 22.6 - (18.6) 18.6 - - -
Other operating income and expense, net   (9.2)   9.2   -   14.7   (14.7)   -   -   -
Operating Income € 82.6 45.9 € 128.5 € 137.8 14.2 € 152.0 (40%) (15%)
Operating Margin 13.3% 20.7% 21.7% 24.0%
Income before Income Taxes 78.4 45.9 124.3 138.0 14.2 152.2 (43%) (18%)
Income tax expense (23.9) (13.0) (36.9) (37.7) (10.7) (48.4) - -
Income tax effect of adjustments above (13.0) 13.0 - (10.7) 10.7 - - -
Minority interest (0.1) (0.1) -
Net Income attributable to shareholders € 54.4 32.9 € 87.3 € 100.2 3.5 € 103.7 (46%) (16%)
Diluted Net Income Per Share (3)   € 0.46   0.28   € 0.74   € 0.84   0.03   € 0.87   (45%)   (15%)

(1) In the reconciliation schedule above, (i) all non-IFRS adjustments to IFRS revenue data reflect the exclusion of the deferred revenue adjustment; (ii) non-IFRS adjustments to operating expense data reflect the exclusion of the amortization of acquired intangibles, other operating income and expense, net and stock-based compensation expense (as detailed below); and (iii) all non-IFRS adjustments to IFRS net income data reflect the combined effect of these non-IFRS adjustments.

  Six months ended June 30,
In millions of Euros   2009 IFRS   Adjustment  

2009
non-IFRS

  2008 IFRS   Adjustment  

2008
non-IFRS

Cost of services and other revenue (73.5)   0.3   (73.2)   (74.5)   0.4   (74.1)
Research and development (162.4) 7.4 (155.0) (150.3) 5.7 (144.6)
Marketing and sales (185.4) 2.5 (182.9) (187.7) 1.9 (185.8)
General and administrative (56.8) 2.6 (54.2) (52.0) 1.8 (50.2)
Total stock-based compensation expense       12.8           9.8    

(2) The non-IFRS percentage increase (decrease) compares non-IFRS measures for the two different periods. In the event there is a 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 118.1 million diluted shares for H1 2009 and 119.3 million diluted shares for H1 2008.



Contact:

Dassault Systèmes:
François-José Bordonado/Beatrix Martinez
33.1.61.62.69.24
or
United States and Canada:
Email Contact
or
Financial Dynamics:
Juliet Clarke/Haya Chelhot/Erwan Gouraud
44.20.7831.3113
or
Eloi Perrin-Aussedat/Clément Bénétreau/
Florence de Montmarin
33.1.47.03.68.10