CIMdata PLM Industry Summary Online Archive
27 April 2011
Financial News
Dassault Systèmes Reports Record First Quarter Earnings and Reconfirms 2011 Financial Growth Objectives
Dassault Système reported IFRS unaudited financial results for the first quarter ended March 31, 2011. These results were reviewed by the Company’s Board of Directors on April 26, 2011.
Summary Highlights |
(unaudited) |
- Strong revenue, earnings and operating margin performance
- New licenses revenue up 28% and recurring revenue up 32% (IFRS and non-IFRS) in constant currencies
- EPS up 59% to €0.51 (IFRS) and up 47% to €0.63 (non-IFRS)
- 2011 financial growth objectives reconfirmed, reported revenue range adjusted for currency
- First quarter Version 6 contracts signed with automotive leaders BMW and Jaguar Land Rover and agricultural engineering leader CLAAS
- Board of Directors’ recommends shareholders approve 17% increase in the cash dividend
First Quarter 2011 Financial Summary |
(unaudited) |
In millions of Euros, except per share data |
|
IFRS |
|
Non-IFRS |
|||||||||
|
|
|
|
Change |
|
Change in cc* |
|
|
|
Change |
|
Change in cc* |
|
Q1 Total Revenue |
|
409.5 |
|
31% |
|
29% |
|
409.9 |
|
31% |
|
29% |
|
Q1 Software Revenue |
|
372.2 |
|
33% |
|
31% |
|
372.6 |
|
33% |
|
31% |
|
Q1 EPS |
|
0.51 |
|
59% |
|
|
|
0.63 |
|
47% |
|
|
|
Q1 Operating Margin |
|
22.2% |
|
|
|
|
|
28.3% |
|
|
|
|
|
*In constant currencies.
Bernard Charlès, Dassault Systèmes President and Chief Executive Officer, commented, “Revenue and earnings came in ahead of our first quarter financial objectives. All regions were important drivers of our growth, including Asia. CATIA’s performance and record quarterly revenues at SolidWorks illustrate the progressive strengthening of the SMB market since the initial signs of recovery in mid-2010.
“The first quarter was also a time of extraordinary efforts by our Japanese employees and sales partners who quickly resumed operations in order to provide support and assistance to our customers in a number of areas. I would like to publicly thank them.
“Key to our performance and market leadership is a continuous focus on leveraging the talents of our executives and regularly evolving management responsibilities, consistent with the dynamic of our market. In this regard, we recently made some brand and channel responsibilities changes to further support our market expansion objectives.
“Finally, leading companies continue to adopt our Version 6, PLM 2 offerings. Two of the world’s foremost automotive companies are moving forward with Version 6 initiatives. In February we outlined BMW’s decision to use V6 as its new platform for Embedded Systems architecture, integration and design. In March, I was very pleased to join Jaguar Land Rover’s CEO Dr. Ralf Speth in announcing a new strategic partnership between our two companies. And most recently, CLAAS, a global leader in agricultural engineering, selected V6 – including CATIA, ENOVIA, DELMIA and SIMULIA.”
Dassault Systèmes completed the acquisition of the IBM PLM operations on March 31, 2010 and these operations were merged into the Company’s operations within its PLM business segment commencing April 1, 2010. Due to the deep integration of former IBM PLM employees into the Company’s operations, involving many changes in sales territories and responsibilities, it is not possible to isolate the IBM PLM revenue and profit since the acquisition date. As previously disclosed, the IBM PLM share of Dassault Systèmes software revenue was estimated at approximately €50 million for the 2010 first quarter.
First Quarter 2011 Financial Review |
(unaudited) |
In millions of Euros |
|
IFRS |
|
Non-IFRS |
|||||||||
|
|
Q1 2011 |
|
Q1 2010 |
|
Change in cc* |
|
Q1 2011 |
|
Q1 2010 |
|
Change in cc* |
|
Total Revenue |
|
409.5 |
|
311.9 |
|
29% |
|
409.9 |
|
312.0 |
|
29% |
|
Software Revenue |
|
372.2 |
|
279.7 |
|
31% |
|
372.6 |
|
279.8 |
|
31% |
|
Services and other Revenue |
|
37.3 |
|
32.2 |
|
14% |
|
37.3 |
|
32.2 |
|
14% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PLM software Revenue |
|
288.1 |
|
208.8 |
|
35% |
|
288.5 |
|
208.9 |
|
36% |
|
Mainstream 3D software Revenue |
|
84.1 |
|
70.9 |
|
16% |
|
84.1 |
|
70.9 |
|
16% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas |
|
112.7 |
|
91.7 |
|
22% |
|
112.8 |
|
91.8 |
|
22% |
|
Europe |
|
186.8 |
|
140.9 |
|
32% |
|
186.8 |
|
140.9 |
|
32% |
|
Asia |
|
110.0 |
|
79.3 |
|
31% |
|
110.3 |
|
79.3 |
|
32% |
|
*In constant currencies.
- IFRS and non-IFRS total revenue increased 29%, reflecting software revenue growth of 31%, and services and other revenue growth of 14% (all figures in constant currencies).
- IFRS and non-IFRS new license revenue increased 28% in constant currencies and IFRS and non-IFRS recurring software revenue grew 32% in constant currencies.
- IFRS PLM software revenue increased 35% in constant currencies. Non-IFRS PLM software revenue increased 36%, with CATIA software revenue higher by 44%, ENOVIA by 31% and Other PLM by 20% (all figures in constant currencies). Other PLM includes SIMULIA, DELMIA, Exalead and 3DVIA.
- Mainstream 3D (IFRS and non-IFRS) software revenue increased 16% in constant currencies. New SolidWorks commercial seats licensed in the first quarter increased 23% to 12,128 seats.
- The IFRS operating margin was 22.2%, up from 15.9% in the first quarter of 2010. The non-IFRS operating margin increased to 28.3% in the 2011 first quarter, up from 22.1% in the year-ago quarter.
- IFRS earnings per diluted share increased 59% to €0.51 up from €0.32. Non-IFRS earnings per diluted share increased 47% to €0.63 compared to €0.43 in the year-ago quarter.
Cash Flow and Other Financial Highlights
Net operating cash flow was €134 million for the 2011 first quarter, compared to €133 million in the year-ago period.
The Company’s net financial position, comprised of cash, cash equivalents and short-term investments less long-term debt, was €873.9 million at March 31, 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 and long-term debt were €1.16 billion and €286.4 million, respectively at March 31, 2011 compared to €1.14 billion and €293.4 million, respectively at December 31, 2010.
Cash Dividend Recommendation and Annual Shareholders’ Meeting Date
The Board of Directors has scheduled the Annual Shareholders’ Meeting for May 26, 2011 and is recommending a 17% increase in the annual cash dividend equivalent to €0.54 per share for the fiscal year ended December 31, 2010, compared to €0.46 per share for the fiscal year ended December 31, 2009. The dividend is subject to approval by shareholders at the Annual Shareholders’ Meeting.
Dassault Systèmes 2011 Management Organizational Changes to Further Position PLM at the Core of Sustainable Innovation in All Businesses.
The following appointments have been made: Etienne Droit, member of the Executive Committee, has been appointed Chief Executive Officer CATIA; Bruno Latchague, member of the Executive Committee, has been appointed Executive Vice President, PLM Value Solutions; Sylvain Laurent has been promoted to Executive Vice President, PLM Enterprise Business Transformation and new member of the Executive Committee; Ken Clayton has been appointed as Vice-President, Professional Channel and Laurent Couillard has been appointed as Exalead CEO.
Other Key Business and Corporate Highlights
In a separate press release issued today, Dassault Systèmes announced the acquisition of Enginuity, to accelerate innovation for formulated products. Demonstrating its broad industry focus, the addition of Enginuity expands Dassault Systèmes’ already extensive suite of collaborative business process solutions based on the ENOVIA V6 platform. Using ENOVIA V6, formula-centric companies in the pharmaceutical, personal care, cosmetics, food and beverage, flavor/fragrance industries will be able to accelerate product innovation and product launches while successfully navigating complex regulatory requirements and more effectively managing and leveraging their formula, packaging and consumer Intellectual Property in a single, global PLM solution.
Dassault Systèmes Acquired Intercim, LLC, a market leader in manufacturing and production operations management software solutions for advanced and highly regulated industries to integrate with its V6 DELMIA software applications. The combining values of DELMIA and Intercim bring together the factory communities with the manufacturing and product engineers, for an immediate common understanding of the products being built with their potential non-conformance and deviations. This translates for customers into faster turn-around time to correct issues, improved product quality, higher production efficiency and conformity information for certification purposes.
CLAAS Boosts Innovation with V6 Solutions from Dassault Systèmes. CLAAS, one of the world’s leading manufacturers of agricultural equipment and products, has committed to shaping its entire product creation process worldwide – from design, construction and simulation to system validation and production planning – with CATIA V6, ENOVIA V6, DELMIA V6, and SIMULIA V6.
Jaguar Land Rover and Dassault Systemes Agree to New Strategic Partnership. The agreement, signed by Dassault Systèmes President and CEO Bernard Charlès and Jaguar Land Rover CEO Dr. Ralf Speth, will see advanced digital 3D simulation and development tools transform Jaguar Land Rover’s Product Development processes. The two companies will work together to jointly develop industry-leading product creation solutions. Jaguar Land Rover will deploy Dassault Systèmes’ V6 solutions for Product Lifecycle Management - the process which drives and controls all vehicle creation processes - to increase operational efficiency and reduce complexity through enhanced innovation and accelerated development capabilities.
Lockheed Martin Expands Use of Dassault Systèmes DELMIA Robotics Implementation. Lockheed Martin has migrated its F-35 Lightning II robotic painting workcells to Dassault Systèmes’ DELMIA Robotics. A long-time user of DELMIA manufacturing simulation solutions, Lockheed Martin’s new implementation of DELMIA Robotics has made the company’s manufacturing processes more efficient, leveraging a common interface across its CATIA design authoring and DELMIA digital manufacturing solutions.
Dassault Systèmes Assists Parker Aerospace in Managing Regulatory Compliance. Parker Aerospace, an operating unit of Parker Hannifin Corporation, the world’s leading producer of motion and control technology solutions, is implementing ENOVIA V6 to better manage regulatory compliance, consolidate disparate systems and enable quicker product data inquiries.
Vodafone McLaren Mercedes to Deploy Dassault Systèmes V6 Solution. McLaren Racing, the operating arm of the Vodafone McLaren Mercedes Formula 1 team, and Dassault Systèmes announced a new partnership to further enhance racing car development efficiency. The agreement sees McLaren Racing committing to Dassault Systèmes’ open V6 PLM solutions for integrated design development, analysis and management. ENOVIA V6 forms McLaren Racing’s collaborative innovation backbone by providing a single IP reference for managing engineering, intellectual property and business processes. CATIA V6 will be used for innovative design and concurrent engineering, enhancing McLaren’s development efficiency.
Other Corporate Information
On April 1, 2011, Dassault Systèmes filed its 2010 Document de référence with the French Autorité des marchés financiers. The 2010 Document de référence as well as an English language translation of this document are available on the Company’s website.
Business Outlook
Thibault de Tersant, Senior Executive Vice President and CFO, commented, “Our first quarter financial results reflected a number of positive dynamics across our businesses and solid operational management. Our strong revenue performance in combination with good expense management led to our non-IFRS operating margin coming in at 28.3% and non-IFRS earnings per share growing 47%.
“Based upon our first quarter results, business trends and recently completed acquisitions, we believe we are positioned to offset the potential impact on revenues that may arise as a consequence of the earthquake in Japan. Therefore, although reducing the reported revenue range outlook to reflect currency assumption changes, we are reconfirming our 2011 constant currency revenue growth objective, including our 15% constant currency new licenses revenue growth goal, as well as our non-IFRS 29% operating margin and our non-IFRS earnings per share objectives. At the same time we will continue to make the appropriate investments to expand our addressable market.”
The Company’s current objectives are the following:
- Second quarter 2011 non-IFRS total revenue objective of about €400 to €410 million, non-IFRS operating margin of about 26-27% and non-IFRS EPS of about €0.56 to €0.61;
- Reconfirming 2011 non-IFRS revenue growth objective range of about 9% to 11% in constant currencies; (adjusting the reported revenue range to €1.67 to €1.70 billion from €1.68 to €1.71 billion previously, based upon the 2011 currency exchange rate assumptions outlined below);
- Reconfirming 2011 non-IFRS operating margin of about 29%;
- Reconfirming 2011 non-IFRS EPS range of €2.64 to €2.75, representing growth of about 6% to 10%;
- Objectives are based upon exchange rate assumptions for the 2011 second quarter of US$1.45 per €1.00 and JPY120 per €1.00 and a full year average of US$1.43 per €1.00 and JPY118 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 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 €80 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. These estimates do not include any new stock option or share grants, or any new acquisitions or restructurings completed after April 27, 2011.
Webcasted Meeting and Conference Call Information
Today, Wednesday, April 27, 2011, Dassault Systèmes will first host a meeting in Paris, which will be simultaneously webcasted at 8:30 AM London time/9:30 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/.
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.
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.
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.
This press release constitutes the quarterly financial information required by article L.451-1-2 IV of the French Monetary and Financial Code (Code Monétaire et Financier).
For the unabridged press release with financial tables please click HERE.
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