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Dassault Systèmes Reports Double-digit Software Revenue and EPS Growth for 2012

Regulatory News:

Dassault Systèmes (Euronext Paris: #13065, DSY.PA) (Paris:DSY), the 3DEXPERIENCE Company, world leader in 3D design software, 3D Digital Mock Up and Product Lifecycle Management (PLM) solutions, today reports IFRS unaudited financial results for the fourth quarter and year ended December 31, 2012. These results were reviewed by the Company’s Board of Directors on February 4, 2013.

Summary Highlights
(unaudited)

  • Q4 2012 financial results well in line with Company objectives
  • 2012 EPS up 14% (IFRS) and 15% to €3.37 (non-IFRS)
  • 2012 non-IFRS operating margin expands 120 basis points to 31.6%
  • 2012 net operating cash flow up 26% to €566 million
  • 3DEXPERIENCE strategy and Industry Solutions Experience launched in 2012
  • 20,000 new customers in 2012 through expansion of indirect sales channels
  • Initiates 2013 objectives: non-IFRS revenue growth of 5-7% in constant currencies

2012 Financial Summary

(unaudited)

 
In millions of Euros, except per share data       IFRS       Non-IFRS
              Change       Change in cc*               Change       Change in cc*
FY 2012 Total Revenue       2,028.3       14%       9%       2,038.5       14%       9%
FY 2012 Software Revenue       1,843.2       14%       9%       1,853.4       15%       10%
FY 2012 EPS       2.66       14%               3.37       15%        
FY 2012 Operating Margin       24.7%                       31.6%                

*In constant currencies.

                             

“2012 represents an important juncture, with the unveiling of the new Dassault Systèmes, the 3DEXPERIENCE Company, and the launching of our Social Industry Experience strategy. It was a year of unprecedented transformation within the Company in order to best position us to access a market sized at $32 billion, doubling the current addressable market,” commented Bernard Charlès, Dassault Systèmes President and Chief Executive Officer. “We successfully launched value-driven Industry Solutions Experience to cover key client processes across the different industries we address.”

“The reception of 3DEXPERIENCE as the next Company horizon was very good, with key customers wins to illustrate it. In addition, thanks to our indirect channels capacity extension, we won 20,000 new customers in 2012, a record so far, and thanks to our brands, we reached 10 million users.”

“Finally, 2012 was also a record year financially for both revenue and earnings. We crossed the €2 billion revenue milestone thanks to non-IFRS software revenue growth of 10% in constant currencies and delivered non-IFRS earnings per share growth of 15%, demonstrating our ability to execute on our ambitious roadmap for the future while also maintaining a strong operational focus.”

2012 Fourth Quarter Financial Summary

(unaudited)

 

In millions of Euros, except per share data       IFRS       Non-IFRS
              Change       Change in cc*               Change       Change in cc*
Q4 Total Revenue       563.5       10%       7%       568.2       11%       8%
Q4 Software Revenue       510.8       11%       8%       515.5       12%       9%
Q4 EPS       0.76       12%               1.02       17%        
Q4 Operating Margin       27.9%                       34.7%                
                                                 
 
 
In millions of Euros IFRS       Non-IFRS
      Q4 2012       Q4 2011       Change in cc*       Q4 2012       Q4 2011       Change in cc*
Total Revenue       563.5       512.1       7%       568.2       512.1       8%
Software Revenue       510.8       462.1       8%       515.5       462.1       9%
Services and other Revenue       52.7       50.0       3%       52.7       50.0       3%
                                                 
PLM software Revenue       407.4       371.0       7%       412.1       371.0       8%
SOLIDWORKS software Revenue       103.4       91.1       11%       103.4       91.1       11%
                                                 
Americas       152.6       135.7       8%       154.0       135.6       9%
Europe       265.8       251.3       5%       266.7       251.4       5%
Asia       145.1       125.1       12%       147.5       125.1       14%

*In constant currencies.

                             
  • Revenue results for the fourth quarter were well in line with the Company’s expectations, evidenced by a mixed economic climate as reflected in lower seasonal growth in new licenses revenue and also reflected a strong year-ago comparison, notably for Europe.
  • Total revenue grew 7% (IFRS) and 8% (non-IFRS) in constant currencies. By region and in constant currencies, non-IFRS revenue growth was highest in Asia, up 14%, led by Japan, Korea and China. In the Americas, non-IFRS revenue increased 9% year on year through growth in both North America and Latin America. Non-IFRS revenue growth in Europe of 5% was led by Germany and France.
  • Software revenue increased 8% (IFRS) and 9% (non-IFRS), with recurring revenue up 10% (IFRS) and 11% (non-IFRS) and new licensing revenue up 3%. Recurring revenue is comprised of maintenance and rental licensing, the latter being up 20%. Regionally, new licenses revenue growth was strongest in Asia while rental licensing activity was strongest in Europe and the Americas (All growth comparisons are in constant currencies).
  • IFRS operating income increased 16% to €157.0 million and IFRS earnings per diluted share increased 12% to €0.76. Non-IFRS earnings per diluted share increased 17% to €1.02 on operating income growth of 18% and the non-IFRS operating margin was 34.7% compared to 32.8% in the year-ago period.
  • PLM software revenue increased 7% (IFRS) and 8% (non-IFRS). Non-IFRS PLM software revenue growth was led by Other PLM, with strong performances by SIMULIA, DELMIA and 3DVIA up double-digits and including the addition of Gemcom. CATIA software revenue increased 1%. ENOVIA software revenue growth was flat (All growth comparisons are in constant currencies).
  • SOLIDWORKS software revenue increased 11% in constant currencies benefiting from both new licensing activity and growth in recurring software revenue. New SOLIDWORKS commercial seats licensed in the quarter increased 13% to 13,751.

2012 Financial Summary

(unaudited)

 
In millions of Euros       IFRS       Non-IFRS
      FY 2012       FY 2011       Change in cc*       FY 2012       FY 2011       Change in cc*
Total Revenue       2,028.3       1,783.0       9%       2,038.5       1,783.5       9%
Software Revenue       1,843.2       1,616.9       9%       1,853.4       1,617.4       10%
Services and other Revenue       185.1       166.1       7%       185.1       166.1       7%
                                                 
PLM software Revenue       1,440.0       1,275.9       8%       1,450.2       1,276.4       9%
SOLIDWORKS software Revenue       403.2       341.0       12%       403.2       341.0       12%
                                                 
Americas       564.3       488.8       7%       567.3       488.8       7%
Europe       908.9       827.1       8%       910.9       827.3       8%
Asia       555.1       467.1       13%       560.3       467.4       14%

*In constant currencies.

                             
  • IFRS and non-IFRS total revenue increased 9% primarily driven by software revenue growth of 9% (IFRS) and 10% (non-IFRS), respectively. Software revenue represented 91% of total revenue. Services and other revenue increased 7% and the services gross margin improved to 5.7%. 2012 results include the acquisition of Gemcom and the divestiture of Transcat PLM GmbH. Excluding the six-month impact of the Gemcom acquisition as well as the sale of Transcat PLM GmbH, Dassault Systèmes non-IFRS revenue growth would have been 8% (All growth comparisons are in constant currencies).
  • Regionally, Asia was the best performing with non-IFRS revenue increasing 14%, reflecting a further return to investment by Japanese customers and strong growth in China and Korea. Despite the impact of the macro-environment softening which began to affect regional results in Europe in the third quarter, full year performance was solid with revenue higher by 8%, led by Germany and France. In the Americas, there were a number of important wins and contract renewals during the year in the Company’s PLM sales channels and good growth in its Professional channel leading to a 7% increase in total revenue for that region. High growth countries posted 16% revenue growth on broad strength (All growth comparisons are in constant currencies).
  • New business activity was reflected in both new licenses revenue and rental licensing revenue which recorded a 17% growth and is a component of recurring software revenue. IFRS and non-IFRS new licenses revenue increased 9% in constant currencies with new licenses revenue highest in Asia, followed by Europe and the Americas. SIMULIA, CATIA and SOLIDWORKS reported strong new licenses revenue growth.
  • Recurring software revenue increased 9% (IFRS) and 10% (non-IFRS) in constant currencies benefiting from growth in maintenance from new licensing activity, strong renewal rates and growth in rental licensing. SIMULIA, ENOVIA and SOLIDWORKS reported strong recurring software revenue growth. Recurring software revenue represented 71% of total software revenue in 2012.
  • The Company reported strong growth in operating income principally reflecting higher revenue. IFRS operating income increased 17% to €501.0 million and the operating margin improved 70 basis points to 24.7%. On a non-IFRS basis, operating income increased 19% to €644.3 million. The non-IFRS operating margin expanded 120 basis points to 31.6%, reflecting revenue growth and improved operating leverage.
  • Net income per diluted share increased 14% to €2.66 (IFRS) and 15% to €3.37 (non-IFRS) per share. Growth in IFRS and non-IFRS earnings per share reflected higher revenue, operating margin expansion and growth in financial income offset in part by a higher effective tax rate.
  • PLM software revenue increased 8% (IFRS) and 9% (non-IFRS). CATIA software revenue increased 5% led by Asia. ENOVIA software revenue increased 7%. Other PLM software revenue increased 19% (IFRS) and 22% (non-IFRS) led by SIMULIA and included GEOVIA, a new brand (All growth comparisons are in constant currencies).
  • SOLIDWORKS software revenue increased 12% in constant currencies on sales of its design suite as well as sales of product data management, simulation, and on increased sales capacity. New SOLIDWORKS commercial seats licensed increased 11% to a record 52,987 seats. 2012 also marks a major new milestone with more than two million total SOLIDWORKS commercial and educational seats sold to date.

Cash Flow and Other Financial Highlights

For 2012, net operating cash flow increased 26% to €566.3 million, compared to €450.9 million for 2011, reflecting net income growth and working capital improvement.

During 2012 the Company completed cash acquisitions of €281.5 million, net of cash acquired; repaid €200 million in borrowings; disbursed cash dividends of €87.8 million; received cash of €98.7 million for stock options exercised and completed share repurchases in the amount of €75.1 million; and made additions to property, equipment and intangibles of €40.7 million.

The Company’s net financial position was €1.28 billion at December 31, 2012, compared to €1.15 billion at December 31, 2011, and was comprised of cash, cash equivalents and short-term investments less long-term debt and less in 2011, the €200 million debt which was repaid in 2012 with cash on hand.

Summary Business, Technology and Corporate Highlights

Aerospace & Defense:

Pratt & Whitney Canada Selects Dassault Systèmes’ 3DEXPERIENCE Platform. Aircraft engine maker chooses ENOVIA application after benchmark; integrated process planning, quality, requirements management, and platform openness were key success factors.

Dassault Systèmes Launches a New Industry Solution Experience: “Winning Program” for Aerospace and Defense. “Winning Program” enables innovative A&D companies to effectively perform front end business activities defining new offers and/or win new business and comprehensively execute the requisite system engineering choices and associated trade studies.

Transportation & Mobility:

Dassault Systèmes’ 3DEXPERIENCE Platform Used on Visteon’s e-Bee Vehicle Concept Project. This new solution helps boost innovation with “Social Cloud.” Visteon Corporation, a leading automotive global supplier, is applying the 3DEXPERIENCE platform’s 3DSwYm social application on the cloud to its recently unveiled e-Bee vehicle concept. The use of 3DSwYm’s social, cloud-based community environment helped Visteon quickly develop innovative new concepts for this demonstration vehicle in its product areas of climate, interior and electronics. Visteon achieved efficiency gains in the development process, while reducing early prototype costs. Visteon also applied the 3DSwYm application to co-create with strategic customers and key supplier/partners on the e-Bee project.

Consumer Goods – Retail:

Dassault Systèmes is named a Leader in Innovation, Capabilities, Functionality and Offering in IDC’s 2012 Retail MarketScape Survey. Dassault Systèmes’ 3DEXPERIENCE platform for Consumer Goods and Retail companies provides organizations with applications needed to collaborate and create the products that will inspire the purchase decision – and to better deliver customer satisfaction all the way through the selling experience.

Life Sciences:

Dassault Systèmes’ 3DEXPERIENCE Platform Adopted by Olympus Technologies Singapore to Accelerate Medical Device Time to Market - Olympus Technologies Singapore Pte Ltd, a leading endoscope manufacturer, has selected Dassault Systèmes’ 3DEXPERIENCE platform for the development of its medical devices. The new “Licensed to Cure” industry solution experience will be deployed to create a single environment, eliminating scattered processes and data, and “embedding” regulations as an asset, optimizing quality and compliance.

Architecture, Engineering and Construction:

Dassault Systèmes Launches a New Industry Solution Experience: “Lean Construction” for AEC Companies - Architecture, Engineering and Construction companies can now count on a 3D Project Management solution to track real-time progress and eliminate waste.

Acquisition:

Dassault Systèmes acquired SquareClock, an innovative start-up providing cloud-based, SaaS-delivered 3D, space planning solutions for residential, professional and shop design purposes. SquareClock has developed a next generation 3D platform for online and onsite marketing to transform the complexity of technical, business and marketing best practices into highly realistic, playful and simple user interactions.

Business Outlook

Thibault de Tersant, Senior Executive Vice President and CFO, commented, “All in all, 2012 turned out to be a year of solid growth with both non-IFRS software revenue and non-IFRS earnings per share increasing double-digits. Our non-IFRS operating margin expanded 120 basis points to 31.6%, while at the same time raising our Company brand visibility through the global advertising campaign, as well as expanding our resources, with employee growth of about 6%. We enjoyed a healthy new business dynamic visible in both our new licenses and rental software growth, although as anticipated, we clearly noted a progressively weaker market environment during the second half of the year.

“As we enter 2013, our initial non-IFRS revenue growth objective for the year of 5-7% in constant currencies is similar to our initial 2012 objective. It assumes that the macro-environment would remain soft across the whole year and therefore would be weaker than the 2012 first half. Recurring software revenue growth is expected to continue to demonstrate a relatively good dynamic. Our operating margin and EPS objectives assume continued organic investments and also assume significant currency headwinds, and would need to be adjusted to reflect potential new acquisitions in support of our strategy.”

The Company’s initial 2013 financial objectives are as follows:

  • First quarter 2013 non-IFRS total revenue objective of about €470 to €480 million, growing 5% to 7% excluding currency effects, non-IFRS operating margin of about 28– 29% and non-IFRS EPS of about €0.71 to €0.76;
  • 2013 non-IFRS revenue growth objective range of about 5% to 7% in constant currencies (€2.06 to €2.09 billion based upon the 2013 currency exchange rate assumptions below);
  • 2013 non-IFRS operating margin of about 32%, up slightly compared to 2012;
  • 2013 non-IFRS EPS range of about €3.45 to €3.60, representing growth of about 2% to 7%;
  • Objectives are based upon exchange rate assumptions for the 2013 first quarter and full year of US$1.40 per €1.00 and JPY120 per €1.00.

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 2013 non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2013 currency exchange rates above: 2013 deferred revenue write-downs estimated at approximately €4 million, share-based compensation expense estimated at approximately €35 million and amortization of acquired intangibles estimated at approximately €94 million. The above objectives do not include any impact from other operating income and expense, net. Further, these estimates do not include any new stock option or performance share grants, or any new acquisitions or restructurings completed after February 7, 2013.

Today’s Webcast and Conference Call Information

Today, Thursday, February 7, 2013, Dassault Systèmes will first host a meeting in Paris, which will be simultaneously webcasted at 10:00 AM London time/11:00 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/company/finance/. Please go to the website at least 15 minutes prior to the webcast or conference call to register, download and install any necessary audio software. The webcast and conference call will be archived for 30 days.

Additional investor information can be accessed at http://www.3ds.com/company/finance/ or by calling Dassault Systèmes’ Investor Relations at 33.1.61.62.69.24.

Key Investor Relations Events

First Quarter Earnings, April 25, 2013 in London

Second Quarter Earnings, July 25, 2013 in Paris

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. If global economic and business conditions continue to be volatile or deteriorate, the Company’s business results may not develop as currently anticipated and may decline below their earlier levels for an extended period of time. Furthermore, due to factors affecting sales of the Company’s products and services, there may be a substantial time lag between any change in global economic and business conditions and its impact on the Company’s business results.

In preparing such forward-looking statements, the Company has in particular assumed an average US dollar to euro exchange rate of US$1.40 per €1.00 and an average Japanese yen to euro exchange rate of JPY120 to €1.00 for the 2013 first quarter and full year; however, currency values fluctuate, and the Company’s results of operations may be significantly affected by changes in exchange rates. The Company’s actual results or performance may also be materially negatively affected by changes in the current global economic context, difficulties or adverse changes affecting its partners or its relationships with its partners, changes in exchange rates, 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, in particular related to the integration of Gemcom Software International and internal reorganizations. Unfavorable changes in any of the above or other factors described in the Company’s regulatory reports, including the 2011 Document de référence, and 2012 Half Year Financial Report, which were filed with the French Autorité des Marchés Financiers (AMF) on March 29, 2012, and July 27, 2012, respectively, could materially affect the Company’s financial position or results of operations.

Estimated results

Readers are cautioned that the results and financial data presented in this press release are “estimated data” according to the 2004-04 Position “Communications on estimated financial data” of the AMF updated on August 1, 2012. The approval of the 2012 financial statements will be submitted to the Board of Directors scheduled at the end of March 2013.

Non-IFRS Financial Information

Readers are cautioned that the supplemental non-IFRS information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRS measurements. Also, the Company’s supplemental non-IFRS financial information may not be comparable to similarly titled non-IFRS measures used by other companies. Further specific limitations for individual non-IFRS measures, and the reasons for presenting non-IFRS financial information, are set forth in the Company’s annual report for the year ended December 31, 2011 included in the Company’s 2011 Document de référence and the 2012 Half Year Financial Report filed with the AMF on March 29, 2012, and July 27, 2012, respectively.

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 and related social charges, the expenses for the amortization of acquired intangible assets, other 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 in 2012. 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.

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 170,000 customers of all sizes, in all industries, in more than 140 countries. For more information, visit www.3ds.com.

CATIA, SOLIDWORKS, SIMULIA, DELMIA, ENOVIA, GEOVIA, EXALEAD, NETVIBES, 3DSWYM 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

FRS – 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 and related social charges, amortization of acquired intangible assets, other operating income and expense, net, certain one-time financial revenue items and the income tax effects of these non-IFRS adjustments and certain one-time tax effects in 2012.

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

 
      Three months ended       Twelve months ended
       

December 31,
2012

     

December 31,
2011

      Change      

Change
in cc*

     

December 31,
2012

     

December 31,
2011

      Change      

Change
in cc*

Non-IFRS Revenue € 568.2       € 512.1       11%       8%       € 2,038.5       € 1,783.5       14%       9%
 
Non-IFRS Revenue breakdown by activity
Software revenue 515.5 462.1 12% 9% 1,853.4 1,617.4 15% 10%
of which new licenses revenue 164.6 155.4 6% 3% 532.3 465.0 14% 9%

of which periodic licenses, maintenance and
product development revenue

350.9 306.7 14% 12% 1,321.1 1,152.4 15% 10%
Services and other revenue 52.7 50.0 5% 3% 185.1 166.1 11% 7%
 
Recurring software revenue 349.6 306.0 14% 11% 1,314.6 1,148.6 14% 10%
 
Non-IFRS software revenue breakdown by product line
PLM software revenue 412.1 371.0 11% 8% 1,450.2 1,276.4 14% 9%
of which CATIA software revenue 229.2 220.2 4% 1% 827.2 762.9 8% 5%
of which ENOVIA software revenue 72.9 70.7 3% 0% 258.5 229.9 12% 7%
of which Other PLM sofware revenue 110.0 80.1 37% 34% 364.5 283.6 29% 22%
SOLIDWORKS software revenue 103.4 91.1 14% 11% 403.2 341.0 18% 12%
 
Non-IFRS Revenue breakdown by geography
Americas 154.0 135.6 14% 9% 567.3 488.8 16% 7%
Europe 266.7 251.4 6% 5% 910.9 827.3 10% 8%
Asia       147.5       125.1       18%       14%       560.3       467.4       20%       14%
 
Non-IFRS operating income € 197.4 € 167.9 18% € 644.3 € 542.6 19%
Non-IFRS operating margin 34.7% 32.8% 31.6% 30.4%
Non-IFRS net income 128.4 108.4 18% 424.5 362.1 17%
Non-IFRS diluted net income per share       € 1.02       € 0.87       17%               € 3.37       € 2.92       15%        
Closing headcount       10,123       9,556       6%               10,123       9,556       6%        
 
Average Rate USD per Euro 1.30 1.35 (4%) 1.28 1.39 (8%)
Average Rate JPY per Euro       105.1       104.2       1%               102.5       111.0       (8%)        

*In constant currencies

DASSAULT SYSTEMES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (IFRS)

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

 
      Three months ended       Twelve months ended
       

December 31,
2012

     

December 31,
2011

     

December 31,
2012

     

December 31,
2011

New licenses revenue 164.6       155.4       532.3       465.0

Periodic licenses, maintenance and product
development revenue

346.2       306.7       1,310.9       1,151.9
Software revenue 510.8 462.1 1,843.2 1,616.9
Services and other revenue 52.7       50.0       185.1       166.1
Total Revenue € 563.5 € 512.1 € 2,028.3 € 1,783.0

Cost of software revenue (excluding amortization
of acquired intangibles)

(26.0) (24.3) (92.2) (80.8)
Cost of services and other revenue (47.3) (42.1) (174.8) (168.6)
Research and development (91.2) (88.6) (368.1) (329.3)
Marketing and sales (169.8) (148.2) (632.6) (535.3)
General and administrative (44.8) (47.0) (163.3) (147.6)
Amortization of acquired intangibles (25.0) (21.1) (93.7) (83.6)
Other operating income and expense, net (2.4)       (5.1)       (2.6)       (9.9)
Total Operating Expenses (€ 406.5)       (€ 376.4)       (€ 1,527.3)       (€ 1,355.1)
Operating Income € 157.0 € 135.7 € 501.0 € 427.9
Financial revenue and other, net 6.2       (5.1)       18.1       1.1
Income before income taxes 163.2 130.6 519.1 429.0
Income tax expense (65.6) (45.2) (180.3) (138.5)
Net Income 97.6 85.4 338.8 290.5
Non-controlling interest (1.8)       (0.7)       (4.0)       (1.3)

Net Income attributable to equity holders of
the parent

€ 95.8       € 84.7       € 334.8       € 289.2
Basic net income per share 0.77       0.70       2.72       2.38
Diluted net income per share € 0.76       € 0.68       € 2.66       € 2.33

Basic weighted average shares outstanding (in
millions)

123.7       121.6       123.3       121.4

Diluted weighted average shares outstanding (in
millions)

      126.4       124.0       125.9       124.0
 

IFRS revenue variation as reported and in constant currencies

 

Three months ended December 31, 2012

      Twelve months ended December 31, 2012
        Change*       Change in cc**       Change*       Change in cc**
IFRS Revenue 10% 7% 14% 9%
IFRS Revenue by activity
Software Revenue 11% 8% 14% 9%
Services and other Revenue 5% 3% 11% 7%
IFRS Software Revenue by product line
PLM software revenue 10% 7% 13% 8%
of which CATIA software revenue 4% 1% 8% 5%
of which ENOVIA software revenue 3% 0% 12% 7%
of which Other PLM sofware revenue 31% 28% 25% 19%
SOLIDWORKS 14% 11% 18% 12%
IFRS Revenue by geography
Americas 12% 8% 15% 7%
Europe 6% 5% 10% 8%
Asia       16%       12%       19%       13%

* 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)

 
       

December 31,
2012

     

December 31,
2011

           
ASSETS
Cash and cash equivalents 1,159.3 1,154.3
Short-term investments 159.8 268.7
Accounts receivable, net 457.8 494.3
Other current assets 154.4 139.4
Total current assets 1,931.3 2,056.7
Property and equipment, net 107.9 106.6
Goodwill and Intangible assets, net 1,459.5 1,241.9
Other non current assets 142.7       111.6
Total Assets       € 3,641.4       € 3,516.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable 90.8 99.9
Unearned revenues 484.7 492.0
Short-term debt 25.5 228.9
Other current liabilities 331.0 317.3
Total current liabilities 932.0 1,138.1
Long-term debt 38.3 72.4
Other non current obligations 290.1 222.6
Total long-term liabilities 328.4 295.0
Non-controlling interests 16.2 17.5
Parent shareholders' equity 2,364.8       2,066.2
Total Liabilities and Shareholders' equity       € 3,641.4       € 3,516.8
 
DASSAULT SYSTEMES
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (IFRS)

(unaudited; in millions of Euros)

 
      Three months ended       Twelve months ended
       

December 31,
2012

     

December 31,
2011

      Change      

December 31,
2012

     

December 31,
2011

      Change
Net Income attributable to equity holders of the parent 95.8       84.7       11.1       334.8       289.2       45.6
Non-controlling interest

1.8

0.7

1.1

4.0

1.3

2.7

Net Income 97.6 85.4 12.2 338.8 290.5 48.3
Depreciation of property & equipment 7.8 6.1 1.7 32.7 25.1 7.6
Amortization of intangible assets 26.6 22.0 4.6 99.4 87.3 12.1
Other non cash P&L Items 28.1 51.2 (23.1) 30.5 49.5 (19.0)
Changes in working capital (63.0)       (96.2)       33.2       64.9       (1.5)       66.4
Net Cash provided by operating activities € 97.1 € 68.5 € 28.6 € 566.3 € 450.9 € 115.4
 
Additions to property, equipement and intangibles (7.9) (16.5) 8.6 (40.7) (71.4) 30.7
Payments for acquisition of businesses, net of cash acquired (18.0) (5.1) (12.9) (281.5) (37.4) (244.1)
Sale of fixed assets 0.1 0.0 0.1 0.6 0.3 0.3
Sale (purchase) of short term investments, net 21.6 (63.5) 85.1 107.9 (103.8) 211.7
Sale of investments, loans and others 0.1       0.7       (0.6)       (5.1)       (2.6)       (2.5)
Net Cash provided by (used in) investing activities (€ 4.1) (€ 84.4) € 80.3 (€ 218.8) (€ 214.9) (€ 3.9)
 
Proceeds (Repayments) of short-term and long-term debt (214.0) (18.9) (195.1) (264.7) (26.2) (238.5)
Repurchase of common stock 0.0 0.0 0.0 (75.1) (226.7) 151.6
Proceeds from exercise of stock-options 18.9 34.5 (15.6) 98.7 233.4 (134.7)
Cash dividend paid (0.4)       0.0       (0.4)       (87.8)       (65.8)       (22.0)
Net Cash provided by (used in) financing activities (€ 195.5) € 15.6 (€ 211.1) (€ 328.9) (€ 85.3) (€ 243.6)
 

Effect of exchange rate changes on
cash and cash equivalents

(18.4) 30.3 (48.7) (13.6) 27.1 (40.7)
                                         
Increase (decrease) in cash and cash equivalents       (€ 120.9)       € 30.0       (€ 150.9)       € 5.0       € 177.8       (€ 172.8)
                                                 
Cash and cash equivalents at beginning of period € 1,280.2 € 1,124.3 € 1,154.3 € 976.5
Cash and cash equivalents at end of period       € 1,159.3       € 1,154.3               € 1,159.3       € 1,154.3        
 

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, 2011 filed with the AMF on March 29, 2012. 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 December 31,       Change
       

2012
IFRS

     

Adjustment
(1)

     

2012
non-IFRS

     

2011
IFRS

     

Adjustment
(1)

     

2011
non-IFRS

      IFRS      

Non-IFRS
(2)

Total Revenue € 563.5       4.7       € 568.2       € 512.1                   10%       11%
Total Revenue breakdown by activity
Software revenue 510.8 4.7 515.5 462.1 11% 12%
New Licenses 164.6 155.4 6%
Product Development 1.3 0.7
Periodic Licenses and Maintenance 344.9 4.7 349.6 306.0 13% 14%
Recurring portion of Software revenue 68% 68% 66%
Services and other revenue 52.7 50.0 5%
Total Software Revenue breakdown by product line
PLM software revenue 407.4 4.7 412.1 371.0 10% 11%
of which CATIA software revenue 229.2 220.2 4%
of which ENOVIA software revenue 72.9 70.7 3%
of which Other PLM software revenue 105.3 4.7 110.0 80.1 31% 37%
SOLIDWORKS software revenue 103.4 91.1 14%
Total Revenue breakdown by geography
Americas 152.6 1.4 154.0 135.7 (0.1) 135.6 12% 14%
Europe 265.8 0.9 266.7 251.3 0.1 251.4 6% 6%
Asia       145.1       2.4       147.5       125.1                       16%       18%
Total Operating Expenses (€ 406.5) 35.7 (€ 370.8) (€ 376.4) 32.2 (€ 344.2) 8% 8%
Stock-based compensation expense (8.3) 8.3 - (6.0) 6.0 - - -
Amortization of acquired intangibles (25.0) 25.0 - (21.1) 21.1 - - -
Other operating income and expense, net       (2.4)       2.4       -       (5.1)       5.1       -       -       -
Operating Income € 157.0 40.4 € 197.4 € 135.7 32.2 € 167.9 16% 18%
Operating Margin 27.9% 34.7% 26.5% 32.8%
Financial revenue & other, net 6.2 0.1 6.3 (5.1) 4.3 (0.8) (222%) (888%)
Income tax expense (65.6) (7.9) (73.5) (45.2) (12.9) (58.1) 45% 27%
Non-controlling interest (1.8) 0.0 (1.8) (0.7) 0.1 (0.6) 157% 200%
Net Income attributable to shareholders € 95.8 32.6 € 128.4 € 84.7 23.7 € 108.4 13% 18%
Diluted Net Income Per Share (3)       € 0.76       0.26       € 1.02       € 0.68       0.19       € 0.87       12%       17%

(1) In the reconciliation schedule above, (i) all adjustments to IFRS revenue data reflect the exclusion of the deferred revenue adjustment of acquired companies; (ii) adjustments to IFRS operating expense data reflect the exclusion of the amortization of acquired intangibles, share-based compensation expense and related social charges, and other operating income and expense, (iii) adjustments to IFRS financial revenue and other, net reflect the exclusion of certain one-time items included in financial revenue and other, net, and (iv) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted net income per share, the income tax effect of the non-IFRS adjustments and certain one-time tax effects in 2012.

         
In millions of Euros       Three months ended December 31,
      2012 IFRS       Adjustment      

2012
non-IFRS

      2011 IFRS       Adjustment      

2011
non-IFRS

Cost of revenue (73.3)       (0.3)       (73.6)       (66.4)       0.2       (66.2)
Research and development (91.2) 1.5 (89.7) (88.6) 2.9 (85.7)
Marketing and sales (169.8) 2.5 (167.3) (148.2) 1.5 (146.7)
General and administrative (44.8) 4.6 (40.2) (47.0) 1.4 (45.6)
Total stock-based compensation expense               8.3                       6.0        

(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 126.4 million diluted shares for Q4 2012 and 124.0 million diluted shares for Q4 2011.

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, 2011 filed with the AMF on March 29, 2012. 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       Twelve months ended December 31,       Change
     

2012
IFRS

     

Adjustment
(1)

     

2012
non-IFRS

     

2011
IFRS

     

Adjustment
(1)

     

2011
non-IFRS

      IFRS      

Non-IFRS
(2)

Total Revenue € 2,028.3       10.2       € 2,038.5       € 1,783.0       0.5       € 1,783.5       14%       14%
Total Revenue breakdown by activity
Software revenue 1,843.2 10.2 1,853.4 1,616.9 0.5 1,617.4 14% 15%
New Licenses 532.3 465.0 14%
Product Development 6.5 3.8
Periodic Licenses and Maintenance 1,304.4 10.2 1,314.6 1,148.1 0.5 1,148.6 14% 14%
Recurring portion of Software revenue 71% 71% 71% 71%
Services and other revenue 185.1 166.1 11%
Total Software Revenue breakdown by product line
PLM software revenue 1,440.0 10.2 1,450.2 1,275.9 0.5 1,276.4 13% 14%
of which CATIA software revenue 827.2 762.4 0.5 762.9 8% 8%
of which ENOVIA software revenue 258.5 229.9 12%
of which Other PLM software revenue 354.3 10.2 364.5 283.6 25% 29%
SOLIDWORKS software revenue 403.2 341.0 18%
Total Revenue breakdown by geography
Americas 564.3 3.0 567.3 488.8 15% 16%
Europe 908.9 2.0 910.9 827.1 0.2 827.3 10% 10%
Asia       555.1       5.2       560.3       467.1       0.3       467.4       19%       20%
Total Operating Expenses (€ 1,527.3) 133.1 (€ 1,394.2) (€ 1,355.1) 114.2 (€ 1,240.9) 13% 12%
Stock-based compensation expense (36.8) 36.8 - (20.7) 20.7 - - -
Amortization of acquired intangibles (93.7) 93.7 - (83.6) 83.6 - - -
Other operating income and expense, net       (2.6)       2.6       -       (9.9)       9.9       -       -       -
Operating Income € 501.0 143.3 € 644.3 € 427.9 114.7 € 542.6 17% 19%
Operating Margin 24.7% 31.6% 24.0% 30.4%
Financial revenue & other, net 18.1 (7.4) 10.7 1.1 (2.4) (1.3) 1545% (923%)
Income tax expense (180.3) (46.2) (226.5) (138.5) (39.1) (177.6) 30% 28%
Non-controlling interest (4.0) 0.0 (4.0) (1.3) (0.3) (1.6) 208% 150%
Net Income attributable to shareholders € 334.8 89.7 € 424.5 € 289.2 72.9 € 362.1 16% 17%
Diluted Net Income Per Share (3)       € 2.66       0.71       € 3.37       € 2.33       0.59       € 2.92       14%       15%

(1) In the reconciliation schedule above, (i) all adjustments to IFRS revenue data reflect the exclusion of the deferred revenue adjustment of acquired companies; (ii) adjustments to IFRS operating expense data reflect the exclusion of the amortization of acquired intangibles, share-based compensation expense and related social charges, and other operating income and expense, (iii) adjustments to IFRS financial revenue and other, net reflect the exclusion of certain one-time items included in financial revenue and other, net, and (iv) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted net income per share, the income tax effect of the non-IFRS adjustments and certain one-time tax effects in 2012.

 
      Twelve months ended December 31,
In millions of Euros       2012 IFRS       Adjustment      

2012
non-IFRS

      2011 IFRS       Adjustment      

2011
non-IFRS

Cost of revenue (267.0)       0.6       (266.4)       (249.4)       0.6       (248.8)
Research and development (368.1) 14.2 (353.9) (329.3) 10.1 (319.2)
Marketing and sales (632.6) 11.0 (621.6) (535.3) 5.5 (529.8)
General and administrative (163.3) 11.0 (152.3) (147.6) 4.5 (143.1)
Total stock-based compensation expense               36.8                       20.7        

(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 125.9 million diluted shares for 2012 and 124.0 million diluted shares for 2011.

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