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Dassault Systemes — Morgan Stanley Conference - November 2008

54 slides from Dassault Systemes's conference presentation, November 2008

  1. Slide 1: Dassault Systèmes Presentation

    Dassault Systèmes Presentation Morgan Stanley Conference - November 2008 Thibault de Tersant, Senior EVP & CFO [email protected] +33 1 61 62 69 24

  2. Slide 2: Forward Looking Information

    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 our non-GAAP financial performance objectives are forward-looking statements (within the meaning of Section 21E of the

  3. Slide 3: Forward Looking Information

    Forward Looking Information Financial information reported in accordance with US GAAP is specifically indicated as “US GAAP”. Supplemental non-GAAP financial information is also presented and excludes the effect of adjusting the carrying value of acquired companies’ deferred revenue, amortization of

  4. Slide 4: Delivering Solid Third Quarter

    Delivering Solid Third Quarter 1. Solid Q3 Performance 2. Business Highlights 3. 2008 Objectives 4. Financial Information Appendix Dassault Systèmes - November 2008 - Page 4

  5. Slide 5: Solid Q3 Performance

    Solid Q3 Performance Non-GAAP* Q308 YTD08 Revenue (€m) 319.7 953.8 Growth ex FX 10% 11% Software Revenue growth ex FX 12% 14% Operating Margin 23.7% 23.9% (+120 bp) (+120 bp) EPS 0.49 1.36 EPS Growth 26% 13% • Solid third quarter meeting or exceeding all our objectives • Q3 growth is all organic • S

  6. Slide 6: Solid Q3 Performance: Revenue Growth by Region

    Solid Q3 Performance Non-GAAP* Revenue growth ex FX by region Q308 YTD08 Americas +16% +14% Europe +11% +11% Asia +0% +6% Total +10% +11% • Solid growth in Americas led by ENOVIA and SIMULIA • Europe driven by good performance in Germany and strong demand from Russia • Performance in Asia impacted b

  7. Slide 7: Solid Q3 Performance: Software Revenue by Product Line

    Solid Q3 Performance Non-GAAP* Software revenue growth ex FX by product line Q308 YTD08 PLM +11% +14% CATIA +9% +17% ENOVIA +19% +10% Mainstream 3D +13% 14% Total +10% +11% • Solid CATIA delivering double-digit growth excluding DSF spin-off impact • Strong ENOVIA growth demonstrating the success of

  8. Slide 8: Delivering Solid Third Quarter

    Delivering Solid Third Quarter 1. Solid Q3 Performance 2. Business Highlights 3. 2008 Objectives 4. Financial Information Appendix Dassault Systèmes - November 2008 - Page 8

  9. Slide 9: Drivers of Q3 Performance

    Delivering Solid Third Quarter Drivers of Q3 Performance: 1. Focus on each brand’s value proposition 2. Industry verticals diversification 3. High growth countries diversification 4. Channels capacity and coverage 5. Recurring revenue Dassault Systèmes - November 2008 - Page 9

  10. Slide 10: Focus on Each Brand's Value Proposition

    1 – Focus on Each Brand’s Value Proposition DS strategy is to maximize customers benefits thanks to each brand’s superior competitive advantage Each brand is a possible entry point to gain new customers Each brand offers a large portfolio of specialized applications to accelerate customers’ deployme

  11. Slide 11: CATIA performance

    1- Focus on Each Brand’s Value Proposition CATIA Good CATIA performance with Q308 software revenue growth up 9% ex FX Performance led by: Strong recurring revenue growth Good dynamic of specialized applications sales enabling to maintain average price point Stronger base of comparison in H208 vs. H1

  12. Slide 12: Specialized Applications Bringing Value to Customers

    1- Focus on Each Brand’s Value Proposition Specialized Applications Bringing Value to Customers Context ACT, US composite parts supplier to leading aero OEMs Achievement Selected CATIA Composite Time required for detail design and prototyping has been reduced by 90% and material usage has declined 1

  13. Slide 13: ENOVIA performance

    1- Focus on Each Brand’s Value Proposition ENOVIA Strong ENOVIA performance Q308 non-GAAP software revenue growth: +19% ex FX YoY Good performance from all 3 product lines Performance driven by industry verticals diversification P&G selecting ENOVIA as Enterprise PLM backbone Offering Accelerators t

  14. Slide 14: Offering Solutions for Business Processes

    1- Focus on Each Brand’s Value Proposition Offering Solutions for Business Processes Context Procter & Gamble, world’s largest consumer packaged goods company – annual sales of $83.5 bn More than 300 brands sold in 180 countries Existing DS customer for ENOVIA, 3DVIA, SIMULIA, DELMIA and SolidWorks

  15. Slide 15: Mainstream 3D

    1- Focus on Each Brand Value Proposition Mainstream 3D Mainstream 3D delivering good performance in Q308 +13% non-GAAP software revenue growth ex FX, +19% in USD +2% in SolidWorks’ units growth with ASP up 2% ex FX Strong growth in subscription Non-GAAP subscription revenue growth above 20% ex FX in

  16. Slide 16: SIMULIA

    1- Focus on Each Brand’s Value Proposition SIMULIA SIMULIA delivering strong software revenue growth ex FX in Q308 Mid-teens non-GAAP software revenue growth ex FX in Q308 and YTD Over 90% of software revenue being recurring Integration with Engineous well underway Releasing Isight for Abaqus Progre

  17. Slide 17: Industry Verticals Diversification

    2 – Industry Verticals Diversification Targeting 11 industries ~30% of 2007 DS customers are in new industries 2 drivers to progress in new industries Offering industry-based solutions for business processes and collaboration Offering solutions for simulation, lifelike experience, manufacturing Dass

  18. Slide 18: Industry Verticals Diversification: Business Processes

    2- Industry Verticals Diversification Offering Solutions for Business Processes Context TUV Rheinland, leading provider of certification services headquartered in Germany - 06 revenue ~€1bn, ~12,500 people Achievement Selected ENOVIA to launch the TUV Compliance platform to evaluate materials and re

  19. Slide 19: High Growth Countries Diversification

    3 – High Growth Countries Diversification Past years transformations in all channels enabled increase sales coverage in high growth countries High Growth Countries include: Asean, CEMA, China, India, Latin America, Russia & CIS Non-GAAP revenue growing above 25% ex FX in Q308 Increasing proportion o

  20. Slide 20: Channels Capacity and Coverage

    4- Channels Capacity and Coverage Over the last years, DS reinforced all its channels to ensure efficient go-to-market for all brands Capacity & coverage increase Ability to sell specialized applications to the installed base Ability to sell the value of subscription to customers At the end of Q308,

  21. Slide 21: Recurring Revenue

    5- Recurring Revenue Strong recurring revenue in 08Q3 TOTAL PLM Mainstream 3D 33% 29% 54% 46% 67% 71% Recurring revenue New licenses revenue Strong dynamic of subscription renewal confirming customers’ satisfaction Recurring software revenue growth in Q308: +18% ex FX Dassault Systèmes - November 20

  22. Slide 22: Delivering Solid Third Quarter

    Delivering Solid Third Quarter 1. Solid Q3 Performance 2. Business Highlights 3. 2008 Objectives 4. Financial Information Appendix Dassault Systèmes - November 2008 - Page 22

  23. Slide 23: Assumptions for Q408 & FY08

    Assumptions for Q408 & FY08 Factoring into Q4 outlook signs of weakening in September due to the economic crisis Targeting however a FY software revenue growth objective of 12% ex FX (from 12%-13% previously), thanks to diversification strategy, sales channels and recurring revenue model Improving F

  24. Slide 24: 2008 Revenue Objective Evolution

    2008 Revenue Objective Evolution (non-GAAP*) From July 08 to October 08 Objectives Revenue Objective (€m) ~+9% ex FX 1400 +9-10% ex FX ~+12% Soft +12-13% Soft ex FX + 30m ex FX 1350 - 10m 1300 1250 1,340 - 1,350 1,320 - 1,330 1200 1150 1100 Initial Obj. FX impact Activity New Obj. * See Appendix for

  25. Slide 25: 2008 DS Objectives (non-GAAP)

    2008 DS Objectives (non-GAAP*) €m 4Q08 2008 Revenue 385 - 395 1,340 - 1,350 Growth +4-7% +5-6% Growth ex FX +2-5% ~ +9% SW Growth ex FX +6-8% ~ +12% Operating Margin ~ 34% ~ 27% EPS (€) 0.79 - 0.84 2.15 - 2.20 EPS Growth +1-8% +9-11% €/US$ Rate 1.45 1.50 €/JPY Rate 145 157 Dassault Systèmes – Q308 R

  26. Slide 26: Accounting elements not included in the non-GAAP 2008 Objectives

    Accounting elements not included in the non-GAAP 2008 Objectives FY 2008 estimated deferred revenue write-down: about €4m FY 2008 estimated share-based compensation expenses (SFAS 123R): about €21m Quarterly estimated amount of amortization of acquired intangibles: about €12m for Q4 (€45m for the FY

  27. Slide 27: Delivering Solid Third Quarter

    Delivering Solid Third Quarter 1. Solid Q3 Performance 2. Business Highlights 3. 2008 Objectives 4. Financial Information Appendix Dassault Systèmes - November 2008 - Page 27

  28. Slide 28: Q308 Financial Highlights: Software Revenue & Margin

    Q308 Financial Highlights (non-GAAP)* Software Revenue & Margin Evolution Software Revenue +8.0% 900 +14% ex FX 800 825.5 700 764.1 600 In Millions € 500 +7.7% 400 +12% ex FX 300 200 258.1 277.9 100 0 YTD07 YTD08 3Q07 3Q08 Software Gross Margin** 94.5% 94.9% 93.8% 94.9% • Q308 performance driven by

  29. Slide 29: Q308 Financial Highlights: Software Revenue

    Q308 Financial Highlights (non-GAAP)* Software Revenue New licenses Revenue Periodic Licenses, Maintenance and Product Development Revenue 350 +2.7% +11.2% 600 +8% ex FX +17% ex FX 300 500 533.1 284.8 292.4 479.3 250 400 In Millions € In Millions € 200 -2.5% 300 +13.4% 150 +1% ex FX +17% ex FX 200 1

  30. Slide 30: Software Recurring Revenue Evolution

    Software Recurring Revenue Evolution Non-GAAP* % of Software Revenue (€m) Recurring 900 800 Non recurring 700 600 64% 500 62% 400 300 200 36% 63% 67% 38% 100 37% 33% 0 YTD07 YTD08 3Q07 3Q08 Non-GAAP Software recurring revenue growth ex FX of +18% in 3Q08 and +18% in YTD 2008 NB: Recurring software r

  31. Slide 31: Service Revenue & Margin Evolution

    Q308 Financial Highlights (non-GAAP)* Service Revenue & Margin Evolution -8.8% 160 -4% ex FX 140 140.7 120 128.3 100 In Millions € 80 -3.2% 60 +0% ex FX 40 43.2 41.8 20 0 YTD07 YTD08 3Q07 3Q08 Service Gross Margin 17.1% 12.9% 11.6% 10.0% • Q308 Services and other revenue performance in line with exp

  32. Slide 32: Revenue by Region (US GAAP)

    Revenue by Region US GAAP in €m Growth Growth 3Q08 3Q07 Growth YTD08 YTD07 Growth ex FX ex FX Americas 101.4 96.1 +6% +15% 291.2 285.8 +2% +15% Europe 146.1 130.9 +12% +12% 441.9 394.5 +12% +12% Asia 70.8 72.1 -2% +1% 218.8 215.4 +2% +7% Total Revenue 318.3 299.1 +6% +10% 951.9 895.7 +6% +12% 3Q 200

  33. Slide 33: Revenue by Product Line (US GAAP)

    Revenue by Product Line US GAAP in €m Growth Growth 3Q08 3Q07 Growth YTD08 YTD07 Growth ex FX ex FX PLM SW 208.9 193.9 +8% +11% 622.4 569.7 +9% +14% CATIA SW 122.5 116.0 +6% +9% 371.5 333.2 +11% +17% ENOVIA SW 43.8 37.7 +16% +22% 125.2 116.6 +7% +13% Other PLM SW 42.6 40.2 +6% +9% 125.7 119.9 +5% +1

  34. Slide 34: Revenue by Region (Non-GAAP)

    Revenue by Region Non-GAAP* in €m Growth Growth 3Q08 3Q07 Growth YTD08 YTD07 Growth ex FX ex FX Americas 102.7 97.0 +6% +16% 292.7 290.1 +1% +14% Europe 146.2 131.9 +11% +11% 442.2 398.1 +11% +11% Asia 70.8 72.4 -2% +0% 218.9 216.6 +1% +6% Total Revenue 319.7 301.3 +6% +10% 953.8 904.8 +5% +11% 3Q 2

  35. Slide 35: Revenue by Product Line (Non-GAAP)

    Revenue by Product Line Non-GAAP* in €m Growth Growth 3Q08 3Q07 Growth YTD08 YTD07 Growth ex FX ex FX PLM SW 210.3 195.8 +7% +11% 624.3 576.1 +8% +14% CATIA SW 122.5 116.9 +5% +9% 371.8 334.3 +11% +17% ENOVIA SW 43.8 38.7 +13% +19% 125.4 121.9 +3% +10% Other PLM SW 44.0 40.2 +9% +13% 127.1 119.9 +6%

  36. Slide 36: Price & Units Evolution – SOLIDWORKS

    Price & Units Evolution – SOLIDWORKS Number of Units ASP (€) 6,000 45,000 +9% +2%* -1%* 40,000 35,000 -7% -3% 4,000 30,000 25,000 20,000 35,248 38,259 +2% 4,686 4,366 4,619 4,497 2,000 15,000 10,000 5,000 11,350 11,577 0 0 YTD07 YTD08 3Q07 3Q08 YTD07 YTD08 3Q07 3Q08 SOWK Price SOWK Price ex FX Repor

  37. Slide 37: US GAAP P&L

    US GAAP P&L (In millions of €, except per share data) Three Months ended Sept. Nine Months ended Sept. 2008 2007 y/y 2008 2007 y/y Software revenue 276.5 255.9 +8.1% 823.6 755.0 +9.1% New licenses revenue 90.5 92.8 (2.5%) 292.4 284.8 +2.7% Periodic licenses, maintenance and product 186.0 163.1 +14.0

  38. Slide 38: US GAAP P&L (%)

    US GAAP P&L (%) Three Months ended Sept. Nine Months ended Sept. 2008 2007 2008 2007 % of revenue % of revenue Software revenue 86.9% 85.6% 86.5% 84.3% New licenses revenue 28.4% 31.0% 30.7% 31.8% Periodic licenses, maintenance and 58.4% 54.5% 55.8% 52.5% product development revenue Service and othe

  39. Slide 39: Non-GAAP P&L

    Non-GAAP P&L (In millions of €, except per share data) Three Months ended Sept. Nine Months ended Sept. 2008 2007 y/y 2008 2007 y/y Software revenue 277.9 258.1 +7.7% 825.5 764.1 +8.0% New licenses revenue 90.5 92.8 (2.5%) 292.4 284.8 +2.7% Periodic licenses, maintenance and product 187.4 165.3 +13.

  40. Slide 40: Non-GAAP P&L (%)

    Non-GAAP P&L (%) Three Months ended Sept. Nine Months ended Sept. 2008 2007 2008 2007 % of revenue % of revenue Software revenue 86.9% 85.7% 86.5% 84.4% New licenses revenue 28.3% 30.8% 30.7% 31.5% Periodic licenses, maintenance and 58.6% 54.9% 55.9% 53.0% product development revenue Service and oth

  41. Slide 41: 3Q08 US GAAP – non-GAAP Reconciliation: Revenue and Gross Margin

    3Q08 US GAAP – non-GAAP Reconciliation Revenue and Gross margin (€ million, except % and per share data) Three months ended September 30, Increase (Decrease) 2008 Adjustment 2008 2007 Adjustment 2007 GAAP non-GAAP GAAP (1) non-GAAP GAAP (1) non-GAAP (2) TOTAL REVENUE 318.3 1.4 319.7 299.1 2.2 301.3

  42. Slide 42: 3Q08 US GAAP – non-GAAP Reconciliation: Expenses and Earnings

    3Q08 US GAAP – non-GAAP Reconciliation Expenses and Earnings (€ million, except % and per share data) Three months ended September 30, Increase (Decrease) 2008 Adjustment 2008 2007 Adjustment 2007 GAAP non-GAAP GAAP (1) non-GAAP GAAP (1) non-GAAP (2) Total Operating Expenses 265.2 (21.4) 243.8 252.2

  43. Slide 43: YTD08 US GAAP – non-GAAP Reconciliation: Revenue and Gross Margin

    YTD08 US GAAP – non-GAAP Reconciliation Revenue and Gross margin (€ million, except % and per share data) Nine months ended September 30, Increase (Decrease) 2008 Adjustment 2008 2007 Adjustment 2007 GAAP non-GAAP GAAP (1) non-GAAP GAAP (1) non-GAAP (2) TOTAL REVENUE 951.9 1.9 953.8 895.7 9.1 904.8

  44. Slide 44: YTD08 US GAAP – non-GAAP Reconciliation: Expenses and Earnings

    YTD08 US GAAP – non-GAAP Reconciliation Expenses and Earnings (€ million, except % and per share data) Nine months ended September 30, Increase (Decrease) 2008 Adjustment 2008 2007 Adjustment 2007 GAAP non-GAAP GAAP (1) non-GAAP GAAP (1) non-GAAP (2) Total Operating Expenses 781.1 (55.2) 725.9 747.9

  45. Slide 45: Operating Income Evolution

    Q308 Financial Highlights (non-GAAP)* Operating Income Evolution Operating Income Operating Income ex FX 250 +11.1% +15% 250 236.2 227.9 200 200 205.1 205.1 In Millions € 150 In Millions € 150 +11.9% +15% 100 100 75.9 77.7 50 67.8 50 67.8 0 0 YTD07 YTD08 3Q07 3Q08 YTD07 YTD08 3Q07 3Q08 Operating Mar

  46. Slide 46: Financial Revenue and Other

    Financial Revenue and Other US GAAP €m 3Q08 3Q07 Growth YTD08 YTD07 Growth Interest Income 5.8 5.8 0% 16.7 16.9 (1% ) Expense (2.4) (1.8) (6.3) (5.6) Financial net Income 3.4 4.0 (15% ) 10.4 11.3 (8% ) Exchange Gain / Loss 6.3 (2.6) (1.4) (4.7) Other Income / Loss 0.2 0.3 1.1 1.4 Total 9.9 1.7 482%

  47. Slide 47: EPS Growth

    Q308 Financial Highlights (non-GAAP)* EPS Growth EPS Growth EPS Growth ex FX 1.60 +13.3% 1.60 +18% 1.40 1.40 1.42 1.36 1.20 1.20 1.20 1.20 1.00 1.00 € 0.80 € 0.80 +25.6% +18% 0.60 0.60 0.40 0.49 0.40 0.46 0.39 0.39 0.20 0.20 0.00 0.00 YTD07 YTD08 3Q07 3Q08 YTD07 YTD08 3Q07 3Q08 • Strong EPS growth a

  48. Slide 48: Consolidated Statement of Cash Flows

    Q308 Financial Highlights Consolidated Statement of Cash Flows (US GAAP*) in €m 3Q08 3Q07 Delta YTD08 YTD07 Delta Net Income 43.3 31.1 +12.2 126.4 101.9 +24.5 Depreciation and Amortization of PPE 5.5 7.3 -1.8 17.0 19.8 -2.8 Amortization of Intangible Assets 12.6 12.2 +0.4 36.2 37.1 -0.9 Other Non Ca

  49. Slide 49: Balance Sheet Evolution

    Balance Sheet Evolution US GAAP in €m End of End of Sep-08 Jun-08 Dec-07 Cash and short-term investments 829.6 739.7 626.6 Accounts receivable, net 265.1 268.4 320.0 Other assets 1,069.5 963.5 1,004.5 Total Assets 2,164.2 1,971.6 1,951.1 Long-term debt 200.8 202.0 202.9 Other liabilities 651.9 605.9

  50. Slide 50: Non-GAAP Key Figures

    Non-GAAP** Key Figures Three months ended Nine months ended Sept. 30, Sept. 30, Variation in Sept. 30, Sept. 30, Variation in 2008 2007 Variation cc* 2008 2007 Variation cc* Non-GAAP Revenue € 319.7 € 301.3 6% 10% € 953.8 € 904.8 5% 11% Non-GAAP Revenue breakdown by activity Software Revenue 277.9 2

  51. Slide 51: Exchange Rate Evolution

    Exchange Rate Evolution Estimated Breakdown of P&L by currency for 2008 Average Exchange rates US$ JPY/Won 3Q08 3Q07 Var. Revenue (As a % of Revenue) 39% 18% €/US$ 1.50 1.37 +9% Operating Expenses €/JPY 161.8 161.9 -0% 43% 6% (As a % of Expenses) €/US$ – 3Q08/3Q07 Variance €/JPY – 3Q08/3Q07 Variance

  52. Slide 52: US GAAP – IFRS Reconciliation

    US GAAP – IFRS Reconciliation Three months ended Sept. 30, In millions of Euros 2008 2008 2007 2007 Adjustment (1) Adjustment (1) U.S. GAAP IFRS U.S. GAAP IFRS Total Revenue € 318.3 € 0.0 € 318.3 € 299.1 € 0.0 € 299.1 Operating Income € 53.1 € 1.4 € 54.5 € 46.9 € 3.9 € 50.8 Amortization of acquired

  53. Slide 53: Non-GAAP – Adjusted IFRS Reconciliation

    Non-GAAP – Adjusted IFRS Reconciliation Three months ended Sept. 30, In millions of Euros 2008 2008 2007 2007 Adjustment (1) Adjustment (1) non-GAAP IFRS adjusted non-GAAP IFRS adjusted Total Revenue € 319.7 € 0.0 € 319.7 € 301.3 € 0.0 € 301.3 Operating Income € 75.9 € 0.0 € 75.9 € 67.8 € 0.0 € 67.8

  54. Slide 54: Thank You!

    Thank You!

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