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

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

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