CIMdata PLM Industry Summary Online Archive
30 April 2009
Financial News
DS Reports First Quarter 2009 Financial Results In Line With Preliminary Announcement
Dassault Systemes reports IFRS unaudited financial results for the first quarter ended March 31, 2009, in accordance with Article L.451-1-2 IV of the French Monetary and Financial Code (Code Monétaire et Financier). These results have been reviewed by the Company’s Board of Directors.
Summary Financial Highlights
(unaudited)
First Quarter 2009 non-IFRS financial results in line with preliminary announcement
Net operating cash flow of €96 million for Q1 and net cash position of €702 million
DS updates 2009 financial objectives
** In the 2008 first quarter, DS recorded a €17 million (€0.13 per share) gain on sale for its prior corporate headquarters facility in other operating income and expense, net. |
Bernard Charlès, Dassault Systemes President and Chief Executive Officer, commented, “As previously announced, the first quarter brought further deterioration of the economic environment which led to a significant decrease in our new license activity across brands and geographic regions. Despite this, first quarter earnings and margin results were well in line with our objectives, thanks to our cost savings.
“Notwithstanding the environment, we made solid progress in strengthening our market leadership. In Mainstream 3D we reached a major milestone with SolidWorks recently crossing the millionth user mark. This is no surprise given its unsurpassed focus on its community of SolidWorks users and value-added resellers.
“During the period we continued to advance our diversification strategy, bringing PLM to a broad range of industries. Recent ENOVIA wins in apparel, consumer goods and pharmaceuticals illustrate this quite well. Additionally, these wins demonstrate the importance of our software solutions in bridging customers’ business process initiatives in compliance, eco-design and sourcing, among others, with product development.”
First Quarter 2009 Financial Review
In millions of Euros |
|
IFRS |
|
Non-IFRS |
||||||||
|
|
Q1 2009 |
|
Q1 2008 |
|
Growth in cc* |
|
Q1 2009 |
|
Q1 2008 |
|
Growth in cc* |
Total Revenue |
|
309.7 |
|
307.4 |
|
(6%) |
|
310.7 |
|
307.9 |
|
(6%) |
Software Revenue |
|
271.8 |
|
269.1 |
|
(5%) |
|
272.8 |
|
269.6 |
|
(5%) |
Services and other Revenue |
|
37.9 |
|
38.3 |
|
(7%) |
|
37.9 |
|
38.3 |
|
(7%) |
PLM software Revenue |
|
200.7 |
|
201.9 |
|
(7%) |
|
201.7 |
|
202.4 |
|
(6%) |
Mainstream 3D software Revenue |
|
71.1 |
|
67.2 |
|
(2%) |
|
71.1 |
|
67.2 |
|
(2%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
97.4 |
|
93.9 |
|
(10%) |
|
97.8 |
|
94.1 |
|
(10%) |
Europe |
|
137.6 |
|
138.7 |
|
0% |
|
137.7 |
|
138.9 |
|
0% |
Asia |
|
74.7 |
|
74.8 |
|
(12%) |
|
75.2 |
|
74.9 |
|
(11%) |
*In constant currencies.
IFRS and non-IFRS total revenue increased 1% on a reported basis. In constant currencies, IFRS and non-IFRS total revenue decreased 6%.
IFRS and non-IFRS software revenue increased 1% on a reported basis. In constant currencies, IFRS software revenue decreased 5%. Non-IFRS software revenue also decreased 5% due to a decrease in new licenses revenue of 40% which more than offset non-IFRS recurring software revenue growth of 15% (all figures are in constant currencies).
Both PLM and Mainstream 3D software results reflected the impact of the current global economic downturn with lower new licenses revenue offsetting growth in recurring software revenue. IFRS PLM software revenue decreased 7% in constant currencies. Non-IFRS PLM software revenue decreased 6% with CATIA software revenue lower by 11% and ENOVIA software revenue lower by 18% offset in part by double-digits software revenue growth from SIMULIA (all figures in constant currencies). Mainstream 3D IFRS and non-IFRS software revenue decreased 2% in constant currencies.
Services and other revenue decreased 7% in constant currencies, in part reflecting the DSF divestiture during 2008 offset to some extent by growth in consulting during the first quarter.
IFRS operating margin was 13.0%. In the year-ago quarter, the IFRS operating margin of 23.5% benefited from a one-time gain on sale of real estate. Non-IFRS operating margin decreased to 19.4% compared to 22.8% in the year-ago quarter reflecting the downturn in the economy, but was in line with the Company’s objective on good execution of its cost savings program.
Financial revenue and other, net, totaled €0.3 million compared to €0.2 million in the 2008 first quarter.
IFRS earnings per diluted share decreased 50% to €0.24. Non-IFRS earnings per diluted share were in line with the Company’s objective, decreasing 10% to €0.37 primarily reflecting a decrease in non-IFRS operating income of 14%.
Cash Flow and Other Financial Highlights
IFRS net operating cash flow was €96 million for the first quarter ended March 31, 2009.
At March 31, 2009, cash and cash equivalents totaled €902.6 million and long-term debt was €200.3 million.
Annual Shareholders’ Meeting Date and Cash Dividend Recommendation
The Annual Shareholders’ Meeting has been scheduled for June 9, 2009. The Board of Directors has recommended an annual cash dividend equivalent to €0.46 per share, representing about €55 million in the aggregate, for the fiscal year ended December 31, 2008, stable with last year’s dividend per share. The dividend is subject to approval by shareholders at the Annual Shareholders’ Meeting.
Key Business and Corporate Highlights
Guess, Inc. Expands Deployment of Dassault Systemes’ PLM Solutions to Manage Its Global Sourcing Operation. Jointly developed with Zymmetry Group – the leading manufacturing and sourcing solutions provider focusing on the apparel industry – the ENOVIA solution integrates sourcing within the design and development process, allowing companies such as Guess, Inc. to seamlessly manage collaboration with production offices and retailers. The ENOVIA solution supports costing and pre-production processes, and offers visibility and process control for brand and retail global operations.
Trent Ltd. Selects Dassault Systemes PLM for Fast Fashion. Trent Ltd., a Tata Group company and operator of Trent Westside, one of India’s largest and fastest growing retailers, will deploy the ENOVIA Apparel Accelerator™ for Design & Development. The ENOVIA Accelerator, which will take just nine weeks to implement, will integrate with their existing ERP systems to provide Trent Ltd. with greater visibility into the new product development process. This approach will enable the company to reduce sample development time and increase seasonal options by leveraging the market knowledge and design capabilities of key suppliers while also tracking commodity prices to negotiate better costs with them.
Great Wall Motor Selects Dassault Systemes’ PLM Solutions for Eco-Design. Great Wall Motor Company Limited (GWM), the largest commercial pickup and SUV manufacturer in China, has chosen Dassault Systemes’ ENOVIA Materials Compliance Central™ to establish an enterprise-wide compliance platform to promote eco-design. The solution, which is being deployed in partnership with D&A Technology (Shanghai) Co. Ltd., a Dassault Systemes’ partner in China, will significantly improve GWM’s competitiveness in a new era where environmental compliance is a basic requirement and a key strategy in GWM successfully expanding its global presence.
Based on the ENOVIA V6 platform, ENOVIA Materials Compliance Central is a business-process application, designed to empower companies to adopt proactive environmental compliance strategies throughout a product’s lifecycle, from design to disposal.
Procter & Gamble Selects Dassault Systemes as Enterprise Simulation Partner. Procter & Gamble Company (P&G), the world’s largest consumer goods company, has selected SIMULIA SLM as their simulation lifecycle management solution to support P&G’s modeling & simulation strategy. Based on Dassault Systemes’ V6 platform, the online collaborative environment for PLM 2.0, SIMULIA SLM enables P&G to capture, share and automate the execution of approved simulation methods, improve traceability of simulation data, and accelerate decision-making while securing valuable intellectual property.
BMW selects Dassault Systemes Digital Design Infrastructure to Speed Up Delivery of Fuel Efficient Cars. BMW will use CATIA to have a single digital software environment for the design of all BMW engines across its fuel and diesel-powered cars, motorcycles, and its newest line of eco-friendly, hybrid cars including the industry’s first hydrogen-powered vehicle.
With the use of CATIA software, a 3D virtual design platform, engineers can consolidate design environments and create a single reference model for the design of all future BMW engines. IBM and Dassault Systemes PLM experts have helped the automaker to harmonize and consolidate all design initiatives into a single digital infrastructure that provides the latest technologies to aid in the software simulation, calculation and testing of new engine models.
DS SolidWorks Unveils Software to Gauge Any Design’s Environmental Impact. SolidWorks introduced software that details, in real time, the environmental impact of parts, assemblies, and the design decisions that go into them. DS SolidWorks demonstrated an early version of the software at SolidWorks World 2009.
Business Outlook
Thibault de Tersant, Senior Executive Vice President and CFO, commented, “Looking ahead, we believe the environment will continue to be difficult.
“With respect to the second quarter and full year outlook, we are taking into account the sharp decline in new licenses experienced during the first quarter and assuming that market conditions remain unchanged throughout the rest of 2009. This leads us to lower our new licenses revenue expectations as well as our recurring software growth assumptions, reflecting the flow-through impact on recurring revenue as the installed base grows at a lower rate. We also think it is prudent to assume that consulting activity will be more subdued given the macroeconomic environment.
“Thanks to our initial cost savings program and additional annual savings target of €80 to €90 million recently announced, we believe the impact to the 2009 operating margin can be largely offset and so we continue to target a full year operating margin of about 25%, the mid-point of our objective. We are lowering our 2009 EPS objective to reflect the revenue objective adjustment as well as the impact of the decline in interest rates on financial revenue. Given the current economic environment we have decided to widen our objective ranges for revenue, operating margin and earnings per share.”
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 Company’s current objectives are the following:
Second quarter 2009 non-IFRS total revenue objective of about €295 to €310 million and non-IFRS EPS of about €0.32 to €0.38;
2009 non-IFRS revenue growth objective range of about -9% to -5% in constant currencies; (€1.260 to €1.310 billion based upon the 2009 currency exchange rate assumptions below.)
2009 non-IFRS operating margin of about 24% to 26%;
2009 non-IFRS EPS range of about €1.78 to €2.00;
Objectives are based upon exchange rate assumptions for the 2009 second quarter of US$1.40 per €1.00 and JPY130 per €1.00 and a full year average of US$1.38 per €1.00 and JPY128 per €1.00.
The non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2009 currency exchange rates above: deferred revenue write-downs estimated at approximately €1.4 million for 2009; share-based compensation expense estimated at approximately €22 million for 2009 and amortization of acquired intangibles estimated at approximately €40 million for 2009. The above objectives do not include any impact from other operating income and expense, net principally comprised of restructuring expenses. These estimates also do not include any new stock option or share grants, or any new acquisitions or restructurings completed after April 30, 2009.
Webcast and Conference Call Information
Dassault Systemes will host a webcast and a conference call today, Thursday, April 30, 2009. Management will host a webcast at 8:30 AM London time/9:30 AM CET time and will then host the conference call at 2:00 PM London time/3:00 PM CET/ 9:00 AM New York time. The webcast 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.
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