Dassault Systèmes Reports New Licenses Revenue Growth of 36% in Q2
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Dassault Systèmes Reports New Licenses Revenue Growth of 36% in Q2

PARIS — (BUSINESS WIRE) — July 27, 2011 — Regulatory News:

Dassault Systèmes (Euronext Paris: #13065, DSY.PA) reports IFRS unaudited financial results for the second quarter and first half ended June 30, 2011. These results were reviewed by the Company’s Board of Directors on July 27, 2011.

Summary Highlights

(unaudited)

Second Quarter 2011 Financial Summary

(unaudited)

   
In millions of Euros, except per share data   IFRS   Non-IFRS
        Change   Change in cc*     Change   Change in cc*
Q2 Total Revenue   428.6   11%   17%   428.6   9%   15%
Q2 Software Revenue   388.4   12%   18%   388.4   10%   16%
Q2 EPS   0.52   30%       0.64   10%    
Q2 Operating Margin   21.7%           28.0%        
       

*In constant currencies.

Bernard Charlès, Dassault Systèmes President and Chief Executive Officer, commented, “Dassault Systèmes delivered a very solid second quarter set of results. In particular, new licenses software revenue growth was up 36%, led by ENOVIA with a 49% increase, and a strong dynamic for the Company as a whole in high growth countries. CATIA had an excellent quarter with software revenue up 13% in constant currencies with Version 6 deployments, more active aerospace and automotive markets and a strong performance in the SMB channel.

“June was an important period for product launches, including our Version 6 Release 2012 and the introduction of our first Cloud services providing affordable and flexible usage for organizations and projects of any scale. Version 6 Release 2012 with its open architecture offers many improvements to enable companies to achieve efficient and secure inter-operability with their various enterprise systems. Exalead, acquired one year ago, further enables this data inter-operability through its ability to find, integrate and analyze data wherever it resides in a simple, quick and cost effective manner thanks to its powerful search capabilities.”

Second Quarter 2011 Financial Review

(unaudited)

   
In millions of Euros   IFRS   Non-IFRS
    Q2 2011   Q2 2010   Change in cc*   Q2 2011   Q2 2010   Change in cc*
Total Revenue   428.6   385.6   17%   428.6   391.9   15%
Software Revenue   388.4   346.4   18%   388.4   352.7   16%
Services and other Revenue   40.2   39.2   8%   40.2   39.2   8%
                         
PLM software Revenue   307.0   268.4   20%   307.0   274.7   17%
Mainstream 3D software Revenue   81.4   78.0   11%   81.4   78.0   11%
                         
Americas   124.4   116.2   21%   124.4   117.2   20%
Europe   188.4   173.7   9%   188.4   175.1   8%
Asia   115.8   95.7   26%   115.8   99.6   21%

*In constant currencies.

2011 First Half Financial Summary

IBM PLM operations acquired by Dassault Systèmes have been merged into the Company’s operations within its PLM business segment since April 1, 2010. As previously disclosed, the IBM PLM share of Dassault Systèmes software revenue was estimated at approximately €50 million for the 2010 first quarter.

In millions of Euros, except per share data   IFRS   Non-IFRS
        Change   Change in cc*       Change   Change in cc*
YTD 2011 Total Revenue   838.1   20%   22%   838.5   19%   21%
YTD 2011 Software Revenue   760.6   21%   23%   761.0   20%   22%
YTD 2011 EPS   1.03   43%       1.28   27%    
YTD 2011 Operating Margin   22.0%           28.2%        

*In constant currencies.

In millions of Euros   IFRS   Non-IFRS
    YTD 2011   YTD 2010   Change in cc*   YTD 2011   YTD 2010   Change in cc*
Total Revenue   838.1   697.5   22%   838.5   703.9   21%
Software Revenue   760.6   626.1   23%   761.0   632.5   22%
Services and other Revenue   77.5   71.4   10%   77.5   71.4   10%
                         
PLM software Revenue   595.1   477.2   26%   595.5   483.6   25%
Mainstream 3D software Revenue   165.5   148.9   14%   165.5   148.9   14%
                         
Americas   237.1   207.9   21%   237.2   209.0   20%
Europe   375.2   314.6   19%   375.2   316.0   19%
Asia   225.8   175.0   28%   226.1   178.9   25%

*In constant currencies.

Cash Flow and Other Financial Highlights

Net operating cash flow was €147.6 million for the 2011 second quarter, compared to €132.3 million in the year-ago period. IFRS net operating cash flow was €281.3 million for the 2011 First Half, compared to €265.6 million for the 2010 First Half. During the 2011 second quarter, the Company received cash of €98.9 million in connection with stock options exercised, completed share repurchases in the amount of €61.2 million, and paid cash dividends of €65.8 million in total. Stock options exercised were primarily in connection with the 2011 expiration of several major ten-year stock option programs.

The Company’s net financial position, comprised of cash, cash equivalents and short-term investments less long-term debt, was €973.1 million at June 30, 2011, compared to a net financial position of €845.7 million at December 31, 2010. The Company’s cash, cash equivalents and short-term investments totaled €1.25 billion and long-term debt was €274.8 million, at June 30, 2011 compared to €1.14 billion and €293.4 million, respectively at December 31, 2010.

Annual Shareholders’ Meeting Approved 17% Increase in Cash Dividend Payment

At the Annual Shareholders’ Meeting held on May 26, 2011, shareholders approved the payment of an annual cash dividend equivalent to €0.54 per share for the fiscal year ended December 31, 2010, representing a 17% increase compared to the prior fiscal year. The cash dividend was paid on June 16, 2011.

Additional Summary Business and Corporate Highlights

Premier Defense Contractor, Lockheed Martin, Optimizes Assembly, Integration and Test Processes with Dassault Systèmes DELMIA Simulation Solutions. Dassault Systèmes’ DELMIA solutions are being used for product and process simulations at Lockheed Martin Space Systems Company. The DELMIA solutions are also a major software component of the new Lockheed Martin Collaborative Human Immersive Lab (CHIL), an advanced technology virtual reality and simulation laboratory that offers a smarter, reduced cost, and lower risk opportunity in building space systems, including satellites, exploration spacecraft, launch vehicles and missile defense systems.

Alstom, a world leader in transport infrastructure, power generation and transmission, has selected Dassault Systèmes Version 6 PLM platform to improve end to end business processes. As a first step in this major transformation, Alstom Transport will leverage Dassault Systèmes’ ENOVIA Version 6 to unify its different sites under a unique, worldwide platform enabling its employees to efficiently collaborate on customer projects. Alstom is consolidating its PLM system in order to streamline information sharing, increase its manufacturing capacity and reduce time-to-market.

Benetton Group has selected Dassault Systèmes Version 6 PLM solution as its platform for global development and sourcing. Dassault Systèmes’ ENOVIA Version 6 will provide Benetton with deep domain-specific apparel design and production capabilities and industry-leading global sourcing management that will enable Benetton to achieve lead time reduction, optimize its sourcing operations, streamline product line complexities and enhance collaboration while accommodating the Benetton Group’s diverse product portfolio.

Embraer SA, the world’s fourth-largest plane maker, is deploying a complete 3D solution for the design and manufacturing of its Phenom and Legacy 500 executive jets at its Melbourne, Florida, US and Sao Jose dos Campos, Brazil plants. Digital Factory is a 3D source for product information aimed at reducing design and manufacturing costs by creating a single set of plans, design models, work and product instructions, all integrated into a secure, collaborative platform.

Dassault Systèmes Goes Cloud with Version 6. In June, Dassault Systèmes announced its new online Version 6 platform, its new store, 3DStore online (swym.3ds.com/#3DStore), for lifelike experiences and applications, and its first online cloud business services. Dassault Systèmes also announced its strategic investment in Outscale, a start-up providing SaaS operator services. With Version 6 cloud-based solutions, users can get what they need, when they need it. Offered as a flexible subscription model, without upfront investments in additional infrastructure, long-term volume commitments or administrative burden, Version 6 Online solutions are designed to adapt to the needs of organizations or projects of any scale.

Dassault Systèmes Goes Cloud with Amazon Web Services. Dassault Systèmes and Amazon Web Services (AWS), an Amazon.com company and leader in elastic cloud infrastructure, are working together to enable companies of all sizes to get started quickly with Dassault Systèmes Version 6 solutions on AWS.

Dassault Systèmes Launches Version 6 Release 2012 and Introduces New Levels of Openness and Lifelike Experience. This release demonstrates Dassault Systèmes’ focus on delivering an open collaborative platform to its customer base and beyond. Release 2012 introduces new interoperability solutions between Version 6 and other PDM systems, and new levels of integration between Version 6 and ERP solutions. It broadens the value of digital assets into new solutions such as immersive retail store experiences and global production system planning with 3DVIA Shopper and DELMIA Global Production System Planning.

Business Outlook

Thibault de Tersant, Senior Executive Vice President and CFO, commented, “The second quarter exceeded our expectations on very healthy demand for our software solutions, with the upside coming both from new licenses revenue and recurring revenue. This performance translated into non-IFRS EPS growth of 10%, and would have been 16% without currency headwinds.

“We are upgrading our 2011 financial objectives for the full €20 million second quarter revenue over-performance, leading to a 2011 revenue growth outlook of 11 to 12% in constant currencies, and earnings per share growth of about 8 to 12% in spite of currency headwinds.

“With respect to second half growth comparisons, let me remind you that our 2010 third quarter revenue was well above our historic seasonal revenue trend. For the 2011 third quarter and second half, our objectives incorporate a sequential revenue outlook range in line with historic patterns. Secondly, with respect to recurring revenue, we had an important level of maintenance recoveries in the 2010 second half, as we outlined last year, which were one-time in nature.

“Overall, we are well positioned going into the second half of the year, and despite the uncertainty of the global economic environment, we have increased confidence in our 2011 financial objectives thanks to our second quarter results.”

The Company’s current objectives are as follows:

The Company’s objectives are prepared and communicated only on a non-IFRS basis and are subject to the cautionary statement set forth below.

The non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2011 currency exchange rates above: deferred revenue write-downs estimated at approximately €1 million for 2011; share-based compensation expense estimated at approximately €15 million for 2011 and amortization of acquired intangibles estimated at approximately €82 million for 2011. The objectives outlined above do not include any impact from other operating income and expense, net principally comprised of acquisition, integration, restructuring and relocation expenses and certain one-time gains in financial revenue and other, net. These estimates do not include any new stock option or share grants, or any new acquisitions or restructurings completed after July 28, 2011.

Webcasted Meeting and Conference Call Information

Today, Thursday, July 28, 2011, Dassault Systèmes will first host a meeting in London, which will be simultaneously webcasted at 9:30 AM London time/10:30 AM CET time and will then host a conference call at 2:00 PM London time/3:00 PM CET/ 9:00 AM New York 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 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 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 2011 assumes, among other things, that there will be a slow economic recovery, but if global economic and business conditions improve more slowly than anticipated, or remain stable or further deteriorate, the Company’s business results may not develop as currently anticipated and may remain below their earlier levels for an extended period of time. In this regard, the impact of the earthquake of March 11, 2011, in Japan remains difficult to evaluate, but may be expected to have a negative impact on the Japanese economic recovery. Furthermore, due to factors affecting sales of the Company’s products and services, 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.

In preparing such forward-looking statements, the Company has in particular assumed an average U.S. dollar to euro exchange rate of US$1.43 per €1.00 and an average Japanese yen to euro exchange rate of JPY117 to €1.00 for 2011; 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 and internal reorganizations. Unfavorable changes in any of the above or other factors described in the Company’s regulatory reports, including the 2010 Document de référence, as filed with the French Autorité des marchés financiers (AMF) on April 1, 2011, could materially affect the Company’s financial position or results of operations.

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, 2010 included in the Company’s 2010 Document de référence filed with the AMF on April 1, 2011.

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, other income and expense, net, certain one-time gains included in financial revenue and other, net, and the income tax effect of the non-IFRS adjustments. 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 130,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systèmes applications 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, EXALEAD for search-based applications and 3DVIA for online 3D lifelike experiences. For more information, visit http://www.3ds.com.

CATIA, DELMIA, ENOVIA, EXALEAD, SIMULIA, SolidWorks and 3D VIA 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, other operating income and expense, net and certain one-time financial revenue gains 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.

  Three months ended   Six months ended
    June 30, 2011   June 30, 2010   Change   Change in cc*   June 30, 2011   June 30, 2010   Change   Change in cc*
Non-IFRS Revenue € 428.6   € 391.9   9%   15%   € 838.5   € 703.9   19%   21%
 
Non-IFRS Revenue breakdown by activity
Software revenue 388.4 352.7 10% 16% 761.0 632.5 20% 22%
of which new licenses revenue 110.4 85.4 29% 36% 209.4 161.5 30% 32%
of which periodic licenses, maintenance and

product development revenue

278.0 267.3 4% 9% 551.6 471.0 17% 19%
Services and other revenue 40.2 39.2 3% 8% 77.5 71.4 9% 10%
 
Recurring software revenue 277.2 267.0 4% 9% 550.5 470.7 17% 19%
 
Non-IFRS software revenue breakdown by product line
PLM software revenue 307.0 274.7 12% 17% 595.5 483.6 23% 25%
of which CATIA software revenue 183.1 168.1 9% 13% 360.1 288.8 25% 26%
of which ENOVIA software revenue 55.9 48.5 15% 22% 103.9 84.7 23% 25%
Mainstream 3D software revenue 81.4 78.0 4% 11% 165.5 148.9 11% 14%
 
Non-IFRS Revenue breakdown by geography
Americas 124.4 117.2 6% 20% 237.2 209.0 13% 20%
Europe 188.4 175.1 8% 8% 375.2 316.0 19% 19%
Asia   115.8   99.6   16%   21%   226.1   178.9   26%   25%
 
Non-IFRS operating income € 120.2 € 109.5 10% € 236.3 € 178.6 32%
Non-IFRS operating margin 28.0% 27.9% 28.2% 25.4%
Non-IFRS net income 79.7 70.2 14% 158.4 121.5 30%
Non-IFRS diluted net income per share   € 0.64   € 0.58   10%       € 1.28   € 1.01   27%    
Closing headcount   9,286   8,789   6%       9,286   8,789   6%    
 
Average Rate USD per Euro 1.44 1.27 13% 1.40 1.33 6%
Average Rate JPY per Euro   117.4   117.2   0%       115.0   121.3   (5%)    

*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,
    2011   2010   2011   2010
New licenses revenue 110.4 85.4 209.4 161.5
Periodic licenses, maintenance and product development revenue 278.0   261.0   551.2   464.6
Software revenue 388.4 346.4 760.6 626.1
Services and other revenue 40.2   39.2   77.5   71.4
Total Revenue € 428.6 € 385.6 € 838.1 € 697.5
Cost of software revenue (excluding amortization of acquired intangibles) (18.8) (19.4) (37.8) (35.8)
Cost of services and other revenue (46.6) (35.8) (85.9) (70.1)
Research and development (83.1) (83.2) (160.0) (160.6)
Marketing and sales (128.0) (121.5) (259.5) (213.6)
General and administrative (35.9) (29.4) (66.8) (56.9)
Amortization of acquired intangibles (20.5) (17.7) (41.8) (27.4)
Other operating income and expense, net (2.5)   (6.6)   (2.3)   (11.6)
Total Operating Expenses (€ 335.4)   (€ 313.6)   (€ 654.1)   (€ 576.0)
Operating Income € 93.2 € 72.0 € 184.0 € 121.5
Financial revenue and other, net 1.1   (3.3)   4.4   2.4
Income before income taxes 94.3 68.7 188.4 123.9
Income tax expense (30.0) (20.0) (60.2) (37.4)
Net Income 64.3 48.7 128.2 86.5
Minority interest 0.0   (0.1)   (0.1)   (0.1)
Net Income attributable to equity holders of the parent € 64.3   € 48.6   € 128.1   € 86.4
Basic net income per share 0.53   0.41   1.06   0.73
Diluted net income per share € 0.52   € 0.40   € 1.03   € 0.72
Basic weighted average shares outstanding (in millions) 121.6   118.6   121.3   118.4
Diluted weighted average shares outstanding (in millions)   124.2   120.7   124.0   120.2
 
  Three months ended June 30, 2011   Six months ended June 30, 2011
    Change*   Change in cc**   Change*   Change in cc**
IFRS Revenue 11%   17%   20%   22%
IFRS Revenue by activity
Software Revenue 12% 18% 21% 23%
Services and other Revenue 3% 8% 9% 10%
IFRS Software Revenue by product line
PLM software revenue 14% 20% 25% 26%
of which CATIA software revenue 13% 17% 27% 28%
of which ENOVIA software revenue 17% 25% 24% 27%
Mainstream 3D software revenue 4% 11% 11% 14%
IFRS Revenue by geography
Americas 7% 21% 14% 21%
Europe 8% 9% 19% 19%
Asia   21%   26%   29%   28%

* 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,
    2011   2010
 
ASSETS
Cash and cash equivalents 966.2 976.5
Short-term investments 281.7 162.6
Accounts receivable, net 362.5 413.5
Other current assets 128.8 120.6
Total current assets 1,739.2 1,673.2
Property and equipment, net 69.9 66.4
Goodwill and Intangible assets, net 1,179.2 1,233.3
Other non current assets 99.1   98.9
Total Assets   € 3,087.4   € 3,071.8
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable 87.1 93.1
Unearned revenues 460.1 387.0
Other current liabilities 280.9 295.0
Total current liabilities 828.1 775.1
Long-term debt 274.8 293.4
Other non current obligations 200.4 211.5
Total long-term liabilities 475.2 504.9
Minority interests 0.9 1.0
Parent shareholders' equity 1,783.2   1,790.8
Total Liabilities and Shareholders' equity   € 3,087.4   € 3,071.8
 

DASSAULT SYSTEMES

CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (IFRS)

(unaudited; in millions of Euros)

   
Three months ended   Six months ended
    June 30, 2011   June 30, 2010   Change   June 30, 2011   June 30, 2010   Change
Net Income attributable to equity holders of the parent 64.3   48.6   15.7 128.1   86.4   41.7
Minority interest 0.0   0.1   (0.1)   0.1   0.1   0.0
Net Income 64.3 48.7 15.6 128.2 86.5 41.7
Depreciation of property & equipment 6.0 6.1 (0.1) 12.2 11.4 0.8
Amortization of intangible assets 21.5 18.7 2.8 43.6 29.4 14.2
Other non cash P&L Items 0.0 (2.5) 2.5 0.5 1.9 (1.4)
Changes in working capital 55.8   61.3   (5.5)   96.8   136.4   (39.6)
Net Cash provided by operating activities 147.6 132.3 15.3 281.3 265.6 15.7
 
Addition to property, equipement and intangibles (13.1) (11.5) (1.6) (22.3) (20.1) (2.2)
Payments for acquisition of businesses, net of cash acquired 0.0 (143.6) 143.6 (29.5) (464.8) 435.3
Sale of fixed assets 0.0 0.5 (0.5) 0.1 0.7 (0.6)
Sale (purchase) of short term investments, net 41.3 23.1 18.2 (121.6) 42.3 (163.9)
Loans and others 0.6   0.1   0.5   (2.6)   0.1   (2.7)
Net Cash provided by (used in) investing activities 28.8 (131.4) 160.2 (175.9) (441.8) 265.9
 
Proceeds (Repayments) of short-term and long-term debt (12.8) 115.0 (127.8) (12.8) 115.0 (127.8)
Share repurchase (61.2) 0.0 (61.2) (172.3) (1.5) (170.8)
Exercise of DS stock option 98.9 22.6 76.3 179.0 24.8 154.2
Cash dividend paid (65.8)   (54.5)   (11.3)   (65.8)   (54.5)   (11.3)
Net Cash provided by (used in) financing activities (40.9) 83.1 (124.0) (71.9) 83.8 (155.7)
 
Effect of exchange rate changes on

cash and cash equivalents

(6.1) 52.4 (58.5) (43.8) 92.6 (136.4)
                     
Increase in cash and cash equivalents   129.4   136.4   (7.0)   (10.3)   0.2   (10.5)
                         
Cash and cash equivalents at beginning of period 836.8 802.9 976.5 939.1
Cash and cash equivalents at end of period   966.2   939.3       966.2   939.3    
 

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, 2010 filed with the AMF on April 1, 2011. To compensate for these limitations, the supplemental non-IFRS financial information should be read not in isolation, but only in conjunction with the Company’s consolidated financial statements prepared in accordance with IFRS.

In millions of Euros, except per share data and percentages   Three months ended June 30,   Change    
2011   Adjustment (1)   2011   2010   Adjustment (1)   2010   IFRS   Non-IFRS (2)
    IFRS       non-IFRS   IFRS       non-IFRS        
Total Revenue € 428.6 € 385.6 6.3 € 391.9 11% 9%
Total Revenue breakdown by activity
Software revenue 388.4 346.4 6.3 352.7 12% 10%
New Licenses 110.4 85.4 29%
Product Development 0.8 0.3
Periodic Licenses and Maintenance 277.2 260.7 6.3 267.0 6% 4%
Recurring portion of Software revenue 71% 75% 76%
Services and other revenue 40.2 39.2 3%
Total Software Revenue breakdown by product line
PLM software revenue 307.0 268.4 6.3 274.7 14% 12%
of which CATIA software revenue 183.1 162.7 5.4 168.1 13% 9%
of which ENOVIA software revenue 55.9 47.6 0.9 48.5 17% 15%
Mainstream 3D software revenue 81.4 78.0 4%
Total Revenue breakdown by geography
Americas 124.4 116.2 1.0 117.2 7% 6%
Europe 188.4 173.7 1.4 175.1 8% 8%
Asia   115.8           95.7   3.9   99.6   21%   16%
Total Operating Expenses (€ 335.4) 27.0 (€ 308.4) (€ 313.6) 31.2 (€ 282.4) 7% 9%
Stock-based compensation expense (4.0) 4.0 - (6.9) 6.9 - - -
Amortization of acquired intangibles (20.5) 20.5 - (17.7) 17.7 - - -
Other operating income and expense, net   (2.5)   2.5   -   (6.6)   6.6   -   -   -
Operating Income € 93.2 27.0 € 120.2 € 72.0 37.5 € 109.5 29% 10%
Operating Margin 21.7% 28.0% 18.7% 27.9%
Financial revenue & other, net 1.1 (1.7) (0.6) (3.3) 0.0 (3.3) (133%) (82%)
Income before income taxes 94.3 25.3 119.6 68.7 37.5 106.2 37% 13%
Income tax expense (30.0) (9.9) (39.9) (20.0) (15.9) (35.9) 50% 11%
Income tax adjustments (9.9) 9.9 - (15.9) 15.9 - - -
Minority interest 0.0 (0.1) -
Net Income attributable to shareholders € 64.3 15.4 € 79.7 € 48.6 21.6 € 70.2 32% 14%
Diluted Net Income Per Share (3)   € 0.52   0.12   € 0.64   € 0.40   0.18   € 0.58   30%   10%
 

(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 expenses data reflect the exclusion of the amortization of acquired intangibles, share-based compensation expense, and other operating income and expense, (iii) adjustments to IFRS financial revenue and other, net reflect the exclusion of certain one-time gains included in financial revenue and other, net in 2011, and (iv) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted net income per share, the income tax effect of the non-IFRS adjustments.

  Three months ended June 30,
In millions of Euros 2011 IFRS   Adjustment   2011   2010 IFRS   Adjustment   2010
            non-IFRS           non-IFRS
Cost of revenue (65.4) 0.2 (65.2) (55.2) 0.2 (55.0)
Research and development (83.1) 1.9 (81.2) (83.2) 4.0 (79.2)
Marketing and sales (128.0) 1.0 (127.0) (121.5) 1.5 (120.0)
General and administrative (35.9) 0.9 (35.0) (29.4) 1.2 (28.2)
Total stock-based compensation expense       4.0           6.9    
 

(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 124.2 million diluted shares for Q2 2011 and 120.7 million diluted shares for Q2 2010.

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, 2010 filed with the AMF on April 1, 2011. To compensate for these limitations, the supplemental non-IFRS financial information should be read not in isolation, but only in conjunction with the Company’s consolidated financial statements prepared in accordance with IFRS.

In millions of Euros, except per share data and percentages   Six months ended June 30,   Change    
2011   Adjustment (1)   2011   2010   Adjustment (1)   2010   IFRS   Non-IFRS (2)
    IFRS       non-IFRS   IFRS       non-IFRS        
Total Revenue € 838.1 0.4 € 838.5 € 697.5 6.4 € 703.9 20% 19%
Total Revenue breakdown by activity
Software revenue 760.6 0.4 761.0 626.1 6.4 632.5 21% 20%
New Licenses 209.4 161.5 30%
Product Development 1.1 0.3
Periodic Licenses and Maintenance 550.1 0.4 550.5 464.3 6.4 470.7 18% 17%
Recurring portion of Software revenue 72% 72% 74% 74%
Services and other revenue 77.5 71.4 9%
Total Software Revenue breakdown by product line
PLM software revenue 595.1 0.4 595.5 477.2 6.4 483.6 25% 23%
of which CATIA software revenue 359.7 0.4 360.1 283.4 5.4 288.8 27% 25%
of which ENOVIA software revenue 103.9 83.8 0.9 84.7 24% 23%
Mainstream 3D software revenue 165.5 148.9 11%
Total Revenue breakdown by geography
Americas 237.1 0.1 237.2 207.9 1.1 209.0 14% 13%
Europe 375.2 0.0 375.2 314.6 1.4 316.0 19% 19%
Asia   225.8   0.3   226.1   175.0   3.9   178.9   29%   26%
Total Operating Expenses (€ 654.1) 51.9 (€ 602.2) (€ 576.0) 50.7 (€ 525.3) 14% 15%
Stock-based compensation expense (7.8) 7.8 - (11.7) 11.7 - - -
Amortization of acquired intangibles (41.8) 41.8 - (27.4) 27.4 - - -
Other operating income and expense, net   (2.3)   2.3   -   (11.6)   11.6   -   -   -
Operating Income € 184.0 52.3 € 236.3 € 121.5 57.1 € 178.6 51% 32%
Operating Margin 22.0% 28.2% 17.4% 25.4%
Financial revenue & other, net 4.4 (5.0) (0.6) 2.4 0.0 2.4 83% (125%)
Income tax expense (60.2) (17.0) (77.2) (37.4) (22.0) (59.4) 61% 30%
Net Income attributable to shareholders € 128.1 30.3 € 158.4 € 86.4 35.1 € 121.5 48% 30%
Diluted Net Income Per Share (3)   € 1.03   0.25   € 1.28   € 0.72   0.29   € 1.01   43%   27%
 

(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 expenses data reflect the exclusion of the amortization of acquired intangibles, share-based compensation expense, and other operating income and expense, (iii) adjustments to IFRS financial revenue and other, net reflect the exclusion of certain one-time gains included in financial revenue and other, net in 2011, and (iv) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted net income per share, the income tax effect of the non-IFRS adjustments.

  Six months ended June 30,
In millions of Euros 2011 IFRS   Adjustment   2011   2010 IFRS   Adjustment   2010
            non-IFRS           non-IFRS
Cost of revenue (123.7) 0.3 (123.4) (105.9) 0.4 (105.5)
Research and development (160.0) 3.7 (156.3) (160.6) 6.8 (153.8)
Marketing and sales (259.5) 2.0 (257.5) (213.6) 2.4 (211.2)
General and administrative (66.8) 1.8 (65.0) (56.9) 2.1 (54.8)
Total stock-based compensation expense       7.8           11.7    
 

(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 124.0 million diluted shares for YTD 2011 and 120.2 million diluted shares for YTD 2010.


Contact:

Dassault Systèmes:
François-José Bordonado/Beatrix Martinez, 33.1.61.62.69.24
or
United States and Canada:
Email Contact
or
Financial Dynamics:
Tim Spratt/Jon Snowball, 44.20.7831.3113
Clément Bénétreau/ Yannick Duvergé, 33.1.47.03.68.10