| Six months ended June 30, | Change | |||||||||||||||
| In millions of Euros | 2018 IFRS | Adjustment | 2018 | 2017 IFRS | Adjustment | 2017 | IFRS | Non-IFRS | ||||||||
| Non-IFRS | Non-IFRS | |||||||||||||||
| Cost of revenue | (240.2) | 2.1 | (238.1) | (240.1) | 2.2 | (238.0) | 0% | 0% | ||||||||
| Research and development | (314.0) | 23.1 | (291.0) | (305.9) | 23.0 | (282.9) | 3% | 3% | ||||||||
| Marketing and sales | (515.8) | 13.9 | (501.9) | (518.3) | 18.1 | (500.2) | 0% | 0% | ||||||||
| General and administrative | (139.6) | 21.1 | (118.4) | (121.8) | 11.1 | (110.7) | 15% | 7% | ||||||||
| Total share-based compensation expense | € 60.2 | € 54.4 | ||||||||||||||
(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 260.0 million diluted shares for H1 2018 and 257.1 million diluted shares for H1 2017.
Summary of Principal Differences of IFRS 15 Compared to IAS 18
The Company has adopted IFRS 15 as of January 1, 2018 using the modified retrospective transition method (also called the cumulative effect method). Under this method, the transition effect is accounted for within the consolidated equity at the date of initial application, i.e. January 1, 2018, without any adjustment to the prior year comparative information. See also the Company’s 2017 Document de Référence (Annual Report) for further information.
- Recurring software: Recurring software is comprised of subscription and support revenue. IFRS 15 has an impact on the timing of the quarterly recognition of subscription revenue but on a full year basis there is essentially no difference between IFRS 15 and the prior IAS 18 standard for subscription contracts of one year in length. For the 2018 second quarter, non-IFRS recurring software revenue was €525.5 million under IFRS 15 and was €14.6 million higher compared to the prior IAS 18 standard. Previously, under IAS 18, we showed a ratable quarterly amount based upon the annual contract level of our on-premise subscription software. Under IFRS 15, for new contracts entered into or for contracts renewing, we have assigned an upfront value as required which is recognized in the first quarter of the contract, and the remainder which is recognized ratably during the four quarters. We continue to report both of these amounts within recurring revenue, specifically as subscription revenue (previously called periodic revenue). Historically, a higher proportion of subscription contracts are renewed in the first quarter of the year than in the other three quarters of the year.
- Operating expenses and sales commissions: The Company continues to expense sales commissions under the IFRS 15 standard as was done under IAS 18. Therefore, there are no capitalized sales commissions. As a result, the Company’s operating expenses are identical under IFRS 15 and the prior IAS 18 standard.
- One-time permanent difference: The implementation of IFRS 15 on January 1, 2018 resulted in a one-time permanent difference between IFRS 15 and IAS 18, where the deferred portion of rental agreements concluded in prior years will not be recognized into revenue. As a result, the corresponding amount of €80 million, net of taxes (€110 million before) was recorded in stockholders’ equity as of January 1, 2018.
- Initial impact on unearned revenue : At June 30, 2018 unearned revenue on the Balance Sheet under IFRS 15 is not directly comparable to the December 31, 2017 balance sheet under the prior standard IAS 18. This is due to the fact that the June 30, 2018 balance sheet line item unearned revenue has been reduced by €134 million, reflecting mainly (i) the one-time permanent difference of €94 million, and (ii) the higher amount of recurring revenue recognized in the first half under IFRS 15 compared to IAS 18 in the amount of €40 million.
- Contract Assets: Under IFRS 15, the Company classifies the right to consideration in exchange for products or services transferred to a client as either a receivable or a contract asset. Contract assets amounted to €32 million as at January 1st, 2018 (1 st application impact) and to €34 million as at June 30, 2018.
|
DASSAULT SYSTEMES
|
||||||||||||
| In millions of Euros, except per share data and percentages | 2018 Non-IFRS | 2018 Non-IFRS | ||||||||||
| QTD | Adjustment (1) | QTD | YTD | Adjustment (1) | YTD | |||||||
| IFRS15 | IAS18 | IFRS15 | IAS18 | |||||||||
| Total Revenue | € 830.7 | 9.6 | € 840.3 | € 1,651.3 | (39.8) | € 1,611.4 | ||||||
| Total Revenue breakdown by activity | ||||||||||||
| Software revenue | 743.0 | 9.6 | 752.6 | 1,480.0 | (39.8) | 1,440.2 | ||||||
| Licenses and Other software revenue | 217.5 | 1.3 | 218.9 | 396.6 | 2.7 | 399.3 | ||||||
| Subscription and Support revenue | 525.5 | 8.2 | 533.7 | 1,083.4 | (42.5) | 1,040.9 | ||||||
| Recurring portion of Software revenue | 71% | 71% | 73% | 72% | ||||||||
| Services revenue | 87.7 | 87.7 | 171.2 | 171.2 | ||||||||
| Total Software Revenue breakdown by product line | ||||||||||||
| CATIA software revenue | 250.4 | 4.6 | 254.9 | 501.0 | (9.2) | 491.9 | ||||||
| ENOVIA software revenue | 87.3 | 0.6 | 87.9 | 162.0 | (1.2) | 160.8 | ||||||
| SOLIDWORKS software revenue | 185.9 | 1.3 | 187.1 | 355.7 | 4.5 | 360.3 | ||||||
| Other software revenue | 219.4 | 3.2 | 222.7 | 461.3 | (34.0) | 427.3 | ||||||
| Total Revenue breakdown by geography | ||||||||||||
| Americas | 239.0 | 13.3 | 252.3 | 478.0 | (0.5) | 477.5 | ||||||
| Europe | 346.1 | 7.1 | 353.2 | 708.7 | (29.0) | 679.7 | ||||||
| Asia | 245.6 | (10.8) | 234.8 | 464.5 | (10.3) | 454.2 | ||||||
| Total Operating Expenses | (€ 586.6) | (€ 586.6) | (€ 1,149.5) | (€ 1,149.5) | ||||||||
| Share-based compensation expense | - | - | - | - | ||||||||
| Amortization of acquired intangibles | - | - | - | - | ||||||||
| Other operating income and expense, net | - | - | - | - | ||||||||
| Operating Income | € 244.1 | 9.6 | € 253.6 | € 501.8 | (39.8) | € 462.0 | ||||||
| Operating Margin | 29.4% | +0.8pts | 30.2% | 30.4% | -1.7pts | 28.7% | ||||||
| Financial revenue & other, net | 5.0 | 5.0 | 10.3 | 10.3 | ||||||||
| Income tax expense | (69.3) | (2.7) | (72.0) | (144.9) | 11.2 | (133.7) | ||||||
| Non-controlling interest | 0.1 | 0.1 | 0.4 | 0.4 | ||||||||
| Net Income attributable to shareholders | € 179.9 | 6.8 | € 186.8 | € 367.5 | (28.6) | € 339.0 | ||||||
| Diluted Net Income Per Share (3) | € 0.69 | 0.03 | € 0.72 | € 1.41 | (0.11) | € 1.30 | ||||||
| 2018 Non-IFRS | 2018 Non-IFRS | |||||||||||
| In millions of Euros | 2018 | Adjustment | 2018 | 2017 | Adjustment | 2017 | ||||||
| IFRS15 | IAS18 | IFRS15 | IAS18 | |||||||||
| Cost of revenue | (118.9) | (118.9) | (238.1) | (238.1) | ||||||||
| Research and development | (150.5) | (150.5) | (291.0) | (291.0) | ||||||||
| Marketing and sales | (255.3) | (255.3) | (501.9) | (501.9) | ||||||||
| General and administrative | (61.9) | (61.9) | (118.4) | (118.4) | ||||||||
| Total share-based compensation expense | ||||||||||||
|
DASSAULT SYSTEMES
|
||||||
| In millions of Euros | IFRS15 Basis | IAS 18 Basis | ||||
| June 30, | Difference | June 30, | ||||
| 2018 | 2018 | |||||
| ASSETS | ||||||
| Cash and cash equivalents | 3,043.2 | - | 3,043.2 | |||
| Short-term investments | 0.5 | - | 0.5 | |||
| Accounts receivable, net | 677.2 | 18.3 | 695.5 | |||
| Contract assets | 36.3 | (36.3) | - | |||
| Other current assets | 273.1 | - | 273.1 | |||
| Total current assets | 4,030.3 | (18.0) | 4,012.3 | |||
| Property and equipment, net | 169.1 | - | 169.1 | |||
| Goodwill and Intangible assets, net | 3,023.6 | - | 3,023.6 | |||
| Other non-current assets | 284.2 | 8.4 | 292.6 | |||
| Total Assets | € 7,507.2 | (€ 9.7) | € 7,497.5 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Accounts payable | 132.7 | - | 132.7 | |||
| Contract liabilities - Unearned revenues | 882.3 | 133.7 | 1,016.0 | |||
| Other current liabilities | 509.3 | (26.9) | 482.4 | |||
| Total current liabilities | 1,524.3 | 106.8 | 1,631.1 | |||
| Long-term debt | 1,000.0 | - | 1,000.0 | |||
| Other non-current obligations | 500.3 | (5.70) | 494.6 | |||
| Total long-term liabilities | 1,500.3 | (5.70) | 1,494.6 | |||
| Non-controlling interests | 1.5 | - | 1.5 | |||
| Parent shareholders' equity | 4,481.1 | (110.7) | 4,370.4 | |||
| Total Liabilities and Shareholders' equity | € 7,507.2 | (€ 9.7) | € 7,497.5 | |||
|
DASSAULT SYSTEMES
|
||||||||||||
| In millions of Euros | Three months ended June 30, 2018 | Six months ended June 30, 2018 | ||||||||||
| IFRS 15 | Difference | IAS 18 | IFRS 15 | Difference | IAS 18 | |||||||
| Net Income attributable to equity holders of the parent | 129.2 | 6.9 | 136.1 | 265.5 | (28.6) | 236.9 | ||||||
| Non-controlling interest |
(0.1) |
0.0 |
(0.1) |
(0.4) |
0.0 |
(0.4) |
||||||
| Net Income | 129.1 | 6.9 | 136.0 | 265.1 | (28.6) | 236.5 | ||||||
| Depreciation of property & equipment | 14.5 | - | 14.5 | 28.2 | - | 28.2 | ||||||
| Amortization of intangible assets | 43.1 | - | 43.1 | 87.0 | - | 87.0 | ||||||
| Other non cash P&L items | 16.5 | - | 16.5 | 33.1 | - | 33.1 | ||||||
| Changes in working capital | 35.4 | (6.9) | 28.5 | 232.1 | 28.6 | 260.7 | ||||||
| Net Cash provided by operating activities | € 238.6 | € 0.0 | € 238.6 | € 645.5 | € 0.0 | € 645.5 | ||||||
| Additions to property, equipment and intangibles | (19.3) | - | (19.3) | (31.3) | - | (31.3) | ||||||
| Payments for acquisition of businesses, net of cash acquired | (51.6) | - | (51.6) | (51.6) | - | (51.6) | ||||||
| Sale (purchase) of short term investments, net | 40.8 | - | 40.8 | 0.7 | - | 0.7 | ||||||
| Investments, loans and others | (1.5) | - | (1.5) | (1.5) | - | (1.5) | ||||||
| Net Cash provided by (used in) investing activities | (€ 31.6) | € 0.0 | (€ 31.6) | (€ 83.7) | € 0.0 | (€ 83.7) | ||||||
| Acquisition of non-controlling interests | (26.2) | - | (26.2) | (26.2) | - | (26.2) | ||||||
| (Purchase) Sale of treasury stock | (10.6) | - | (10.6) | (2.3) | - | (2.3) | ||||||
| Proceeds from exercise of stock-options | 31.4 | - | 31.4 | 43.7 | - | 43.7 | ||||||
| Cash dividend paid | (38.0) | - | (38.0) | (38.0) | - | (38.0) | ||||||
| Net Cash provided by (used in) financing activities | (€ 43.4) | € 0.0 | (€ 43.4) | (€ 22.8) | € 0.0 | (€ 22.8) | ||||||
|
Effect of exchange rate changes on
cash and cash equivalents |
75.8 | 0.0 | 75.8 | 44.8 | 0.0 | 44.8 | ||||||
| Increase (decrease) in cash and cash equivalents | € 239.4 | € 0.0 | € 239.4 | € 583.8 | € 0.0 | € 583.8 | ||||||
| Cash and cash equivalents at beginning of period | € 2,803.8 | € 0.0 | € 2,803.8 | € 2,459.4 | € 0.0 | € 2,459.4 | ||||||
| Cash and cash equivalents at end of period | € 3,043.2 | € 0.0 | € 3,043.2 | € 3,043.2 | € 0.0 | € 3,043.2 | ||||||
|
IFRS 15
DASSAULT SYSTEMES
|
||||
| In millions of Euros, except per share data and percentages | Three months ended | Six months ended | ||
| June 30, 2018 | June 30, 2018 | |||
| Non-IFRS-IFRS15 Revenue | € 830.7 | € 1,651.3 | ||
| Non-IFRS-IFRS15 Revenue breakdown by activity | ||||
| Software revenue | 743.0 | 1,480.0 | ||
| of which licenses and other software revenue | 217.5 | 396.6 | ||
| of which subscription and support revenue | 525.5 | 1,083.4 | ||
| Services revenue | 87.7 | 171.2 | ||
| Non-IFRS-IFRS15 software revenue breakdown by product line | ||||
| CATIA software revenue | 250.4 | 501.0 | ||
| ENOVIA software revenue | 87.3 | 162.0 | ||
| SOLIDWORKS software revenue | 185.9 | 355.7 | ||
| Other software revenue | 219.4 | 461.3 | ||
| Non-IFRS-IFRS15 Revenue breakdown by geography | ||||
| Americas | 239.0 | 478.0 | ||
| Europe | 346.1 | 708.7 | ||
| Asia | 245.6 | 464.5 | ||
| Non-IFRS-IFRS15 operating income | € 244.1 | € 501.8 | ||
| Non-IFRS-IFRS15 operating margin | 29.4% | 30.4% | ||
| Non-IFRS net income attributable to shareholders | € 179.9 | € 367.5 | ||
| Non-IFRS-IFRS15 diluted net income per share | € 0.69 | € 1.41 | ||
| Closing headcount | 16,221 | 16,221 | ||
| Average Rate USD per Euro | 1.19 | 1.21 | ||
| Average Rate JPY per Euro | 130.0 | 131.60 | ||
|
IFRS 15
|
||||
| In millions of Euros, except per share data and percentages | Three months ended | Six months ended | ||
| June 30, | June 30, | |||
| 2018 | 2018 | |||
| Licenses and other software revenue | 217.5 | 396.6 | ||
| Subscription and Support revenue | 522.5 | 1,078.6 | ||
| Software revenue | 740.1 | 1,475.2 | ||
| Services revenue | 87.7 | 171.2 | ||
| Total Revenue IFRS -IFRS15 | € 827.8 | € 1,646.4 | ||
| Cost of software revenue (excluding amortization of acquired intangibles) | (38.2) | (79.0) | ||
| Cost of services and other revenue | (81.8) | (161.2) | ||
| Research and development | (161.4) | (314.0) | ||
| Marketing and sales | (262.8) | (515.8) | ||
| General and administrative | (69.8) | (139.6) | ||
| Amortization of acquired intangibles | (40.7) | (82.5) | ||
| Other operating income and expense, net | (4.4) | (6.9) | ||
| Total Operating Expenses | (659.0) | (1,299.0) | ||
| Operating Income | € 168.7 | € 347.4 | ||
| Financial revenue and other, net | 4.4 | 9.1 | ||
| Income before income taxes | 173.1 | 356.6 | ||
| Income tax expense | (44.0) | (91.5) | ||
| Net Income | € 129.1 | € 265.1 | ||
| Non-controlling interest | 0.1 | 0.4 | ||
| Net Income attributable to equity holders of the parent | € 129.3 | € 265.5 | ||
| Basic net income per share | 0.50 | 1.03 | ||
| Diluted net income per share | € 0.50 | € 1.02 | ||
| Basic weighted average shares outstanding (in millions) | 258.9 | 257.9 | ||
| Diluted weighted average shares outstanding (in millions) | 260.4 | 260.0 | ||
|
IFRS 15
|
||||
| In millions of Euros | June 30, | December 31, | ||
| 2018 | 2017 | |||
| ASSETS | ||||
| Cash and cash equivalents | 3,043.2 | 2,459.4 | ||
| Short-term investments | 0.5 | 1.3 | ||
| Accounts receivable, net | 677.2 | 895.9 | ||
| Contract assets | 36.3 | 0.0 | ||
| Other current assets | 273.1 | 242.9 | ||
| Total current assets | 4,030.3 | 3,599.5 | ||
| Property and equipment, net | 169.1 | 169.0 | ||
| Goodwill and Intangible assets, net | 3,023.6 | 2,990.1 | ||
| Other non-current assets | 284.2 | 271.2 | ||
| Total Assets | € 7,507.2 | € 7,029.8 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
| Accounts payable | 132.7 | 149.3 | ||
| Unearned revenues | 882.3 | 876.4 | ||
| Other current liabilities | 509.3 | 501.7 | ||
| Total current liabilities | 1,524.3 | 1,527.4 | ||
| Long-term debt | 1,000.0 | 1,000.0 | ||
| Other non-current obligations | 500.3 | 506.3 | ||
| Total long-term liabilities | 1,500.3 | 1,506.3 | ||
| Non-controlling interests | 1.5 | 1.9 | ||
| Parent shareholders' equity | 4,481.1 | 3,994.2 | ||
| Total Liabilities and Shareholders' equity | € 7,507.2 | € 7,029.8 | ||
|
IFRS 15
|
||||||||||||
| In millions of Euros | Three months ended | Six months ended | ||||||||||
| June 30, 2018 | June 30, 2017 | Change | June 30, 2018 | June 30, 2017 | Change | |||||||
| Net Income attributable to equity holders of the parent | 129.2 | 123.0 | 6.2 | 265.5 | 208.0 | 57.5 | ||||||
| Non-controlling interest |
(0.1) |
(0.1) |
0.0 |
(0.4) |
1.3 |
(1.7) |
||||||
| Net Income | 129.1 | 122.9 | 6.2 | 265.1 | 209.2 | 55.9 | ||||||
| Depreciation of property & equipment | 14.5 | 11.1 | 3.4 | 28.2 | 22.9 | 5.3 | ||||||
| Amortization of intangible assets | 43.1 | 41.3 | 1.8 | 87.0 | 84.6 | 2.4 | ||||||
| Other non cash P&L items | 16.5 | 2.6 | 13.9 | 33.1 | 10.4 | 22.7 | ||||||
| Changes in working capital | 35.4 | 66.7 | (31.3) | 232.1 | 265.2 | (33.1) | ||||||
| Net Cash provided by operating activities | € 238.6 | € 244.6 | (€ 6.0) | € 645.5 | € 592.4 | € 53.1 | ||||||
| Additions to property, equipment and intangibles | (19.3) | (27.4) | 8.1 | (31.3) | (45.8) | 14.5 | ||||||
| Payments for acquisition of businesses, net of cash acquired | (51.6) | (7.6) | (44.0) | (51.6) | (8.0) | (43.6) | ||||||
| Sale (purchase) of short term investments, net | 40.8 | 12.5 | 28.3 | 0.7 | 3.7 | (3.0) | ||||||
| Investments, loans and others | (1.5) | - | (1.5) | (1.5) | 6.4 | (7.9) | ||||||
| Net Cash provided by (used in) investing activities | (€ 31.6) | (€ 22.5) | (€ 9.1) | (€ 83.7) | (€ 43.7) | (€ 40.0) | ||||||
| Acquisition of non-controlling interests | (26.2) | (14.1) | (12.1) | (26.2) | (14.1) | (12.1) | ||||||
| (Purchase) Sale of treasury stock | (10.6) | (47.9) | 37.3 | (2.3) | (44.8) | 42.5 | ||||||
| Proceeds from exercise of stock-options | 31.4 | 16.5 | 14.9 | 43.7 | 21.8 | 21.9 | ||||||
| Cash dividend paid | (38.0) | (51.3) | 13.3 | (38.0) | (51.3) | 13.3 | ||||||
| Net Cash provided by (used in) financing activities | (€ 43.4) | (€ 96.8) | € 53.4 | (€ 22.8) | (€ 88.4) | € 65.6 | ||||||
|
Effect of exchange rate changes on
cash and cash equivalents |
75.8 | (121.5) | 197.3 | 44.8 | (127.8) | 172.6 | ||||||
| Increase (decrease) in cash and cash equivalents | € 239.4 | € 3.8 | € 583.8 | € 332.5 | ||||||||
| Cash and cash equivalents at beginning of period | € 2,803.8 | € 2,765.4 | € 2,459.4 | € 2,436.7 | ||||||||
| Cash and cash equivalents at end of period | € 3,043.2 | € 2,769.2 | € 3,043.2 | € 2,769.2 | ||||||||
IFRS 15
