CIMdata PLM Industry Summary Online Archive
30 April 2009
Financial News
Dassault Systemes cuts 2009 earnings targets
Dassault Systemes cut its 2009 revenue and earnings goals, blaming the global economic downturn as it posted a 6 percent decline in first-quarter revenue.
Dassault expects new licence sales to decline 30 percent this year, Chief Financial Officer Thibault de Tersant said on Thursday. This compared with a previous forecast for a 9-14 percent fall.
The drop will hit the group's recurring revenue, which it now sees rising 4-6 percent instead of 8 percent this year, the IT company said, adding that the economic crisis was "much more severe" than it expected.
"Looking ahead, we believe the environment will continue to be difficult," Tersant said.
He added that it was too early to revise its five-year earnings goals to 2010: "This is something we want to do as soon as we have more clarity on this macro-economic environment, and hopefully before the end of this year."
Dassault, whose clients include global giants Boeing (BA.N) and Sony (6758.T), said it now expected 2009 non-IFRS revenue to fall by 5 to 9 percent, compared with a previous forecast for a 1-3 percent rise.
The group also cut its full-year earnings per share estimate to a range of 1.78 to 2.00 euros, against the 2.02-2.12 euros per share it had expected in February.
"The first quarter brought further deterioration of the economic environment, which led to a significant decrease in our new licence activity across brands and geographic regions," Chief Executive Bernard Charles said in a statement.
"REALISTIC" OUTLOOK
The company had pre-announced first-quarter earnings on April 16, saying it had missed its sales target and was likely to cut its goal for the full year.
Final first-quarter figures showed revenue was 310.7 million euros ($411.7 million), down 6 percent at constant exchange rates, while earnings per share fell 10 percent to 0.37 euros and the operating margin was 19.4 percent.
For the second-quarter of 2009, Dassault said it expected non-IFRS sales of between 295 and 310 million euros and second-quarter non-IFRS earnings per share of 0.32-038 euros.
These forecasts are "a more realistic view with regards to the outlook for new licence purchases, the knock-on impact to recurring revenues, and an acknowledgement of the weak state of Dassault's key end markets," Goldman Sachs analysts wrote.
Dassault added that it now expected a non-IFRS operating margin of about 24 to 26 percent for 2009, in line with the 25.5 percent it forecast in February.
Earlier this month, Dassault said it was seeking an additional 80-90 million euros in cost savings this year, which would not entail layoffs.
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