| Dassault Systèmes Reports 2009 Fourth Quarter Results, With Operating Margin Expansion and Earnings Growth | ||
| Source: Business Wire 11 February 2010 |
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Dassault Systèmes (DS) (Paris:DSY) reports IFRS unaudited financial results for the fourth quarter and year ended December 31, 2009. These results were reviewed by the Company’s Board of Directors on February 10, 2010. Summary Highlights
Fourth Quarter and Full Year 2009 Financial Summary
“Dassault Systèmes made significant progress during 2009 to prepare for the future,” commented Bernard Charlès, Dassault Systèmes President and Chief Executive Officer. “We strengthened the leadership of each of our six brands, enhanced the quality and performance of our entire software portfolio, improved the global efficiency of our organization, and our global market share has grown as well. On top of this we are eager to integrate the IBM PLM organization. Our customers will benefit from closer relationships with our sales and support teams, as well as unique deployment capabilities thanks to our renewed partnership with IBM. “Looking forward, we have laid the ground-work for our growth over the next five years, thanks to the industry’s largest sales capacity, our Version 6 platform and our wide applications portfolio. All this is coming at the right time to help our customers address their new challenges to advance sustainable innovation. As a result, we believe Dassault Systèmes will be very well positioned to leverage market conditions as they improve.” Fourth Quarter 2009 Financial Review
*In constant currencies. Fourth quarter results were in line with the Company’s financial objectives. New license revenue grew 66% sequentially in constant currency, higher than normal seasonality, reflecting increased activity in both the Americas and Asia. While new business activity is still lower year on year, the Company started to see a return to some larger transactions in both its ENOVIA and CATIA businesses.
2009 Full Year Financial Summary
*In constant currencies. Full year financial results were in line with the Company’s financial objectives. Overall revenue results reflect the benefits of recurring software revenue, which represented 73% of total software revenue and 64% of total revenue. Operating margin and earnings results benefited from the cost savings program put in place by the Company. At year-end the Company had 7,834 personnel, a generally stable overall employee base in comparison to 2008. The Company continued to add resources in research and development, expanding R&D headcount by 4% at December 31, 2009 compared to the 2008 year-end.
Cash Flow and Other Financial Highlights IFRS net operating cash flow was €297.9 million for 2009 compared to €309.1 million for the year ended December 31, 2008. Cash and short-term investments passed the €1 billion milestone, reaching €1.06 billion at December 31, 2009, compared to €840.4 million at December 31, 2008. During 2009, the Company paid cash dividends totalling €54.8 million, with the cash dividend per share stable with the prior year. The Company’s net financial position was €858 million, net of outstanding debt consisting of €200 million of financial long-term debt, at December 31, 2009. Summary Business and Corporate Highlights 2009 new business activity and re-orders by customers included among others: Babcock and Wilcox Power Generation Group, Inc., Bath Ironworks, Beckman Coulter, BMW, Bombardier, Boston Apparel Group, Dana Holding Corporation, EADS, Eldo, Embraer, GE Healthcare, Great Wall Motor Company Ltd., Guess, Inc., Gulfstream, Hawker Beechcraft, Johnson Controls, Piaggio Aero, Procter & Gamble, Renault Group, Samsung Heavy Industries, Spirit, Trent Ltd., Under Armour, and Vanity Fair. Dassault Systèmes and IBM announced their intent to integrate the IBM PLM sales force within DS and to sign a new global alliance to expand PLM in all industries - In October, 2009 DS and IBM signed a definitive agreement whereby DS would acquire the IBM sales and client support business operations encompassing DS PLM software application portfolio, as well as customer contracts and related assets (“IBM PLM”), for approximately $600 million in cash less assumed liabilities. DS and IBM also defined the next steps in their long-standing relationship, with plans to establish DS as a strategic IBM global alliance partner and to expand their services partnership. Dassault Systèmes expands PLM at P&G providing Technology to Simplify and Optimize the Packaging and Artwork Process – In a separate press release issued today, DS announced that Procter & Gamble, the world’s largest consumer goods company, has extended the scope of its V6 PLM implementation to incorporate global packaging and artwork initiatives. This builds on P&G’s for an enterprise-wide PLM process. Together, DS and P&G are developing a highly integrated suite of products to help make the packaging process more efficient, improve speed to market, increase shelf impact and, ultimately, create a better experience for consumers. Streamlining these services is another example of how DS is supporting P&G’s focus on “Simplify, Scale & Execute” which is one of P&G’s key growth strategies. Lifelike Experience and Social Innovation at Heart of New V6 Release V6R2010x – In November, 2009 DS launched V6R2010x, in support of DS’ PLM 2.0 and Social Innovation strategy serving new audiences within all communities, including traditional industry-oriented ones. The enhancements are delivered in the three sectors of V6’s organic architecture (Lifelike Experience, Collaborative I-PLM and IP Creation). V6R2010x extends the reach of the V6 platform beyond on-premises solutions to include mobile and cloud solutions. The V6R2010x platform delivers new and unique capabilities that connect users within their companies or with external online communities. It enables them to create and share their IP and 3D experiences with the ease of use of common Internet tools and the control required in industrial companies. Standardization of Planning Processes within Central Environment Simplifies Early Product Development - In November, 2009 DS announced that global power tools provider ANDREAS STIHL AG & Co. KG had selected Dassault Systèmes DELMIA Process Engineer to optimize complex planning processes for product development. The STIHL Group develops, manufactures, and distributes power equipment for forestry, landscaping, and construction industries. Products are sold primarily through authorized service dealers. The STIHL global sales organization includes 32 sales subsidiaries, more than 120 importers, and nearly 35,000 dealers in over 160 countries on five continents. STIHL has been the world’s best-selling chainsaw brand since 1971. Dassault Systèmes Unveils Collaborative Innovation Initiative for Consumer Packaged Goods – In November 2009, DS unveiled a new initiative designed specifically to enable consumer packaged goods companies to increase overall organizational efficiency and cost management. The primary value of the Collaborative Business Processes Initiative for Consumer Packaged Goods companies is to accelerate innovation by promoting global standardization and re-use of intellectual property throughout the supply chain helping to generate global economies of scale, reduce cycle times and improve quality. Business Outlook Thibault de Tersant, Senior Executive Vice President and CFO, commented, “Looking at 2009 as a whole, it was rewarding to see how well DS managed through this difficult period. Thanks to the value our software brings to our customers’ businesses, our recurring revenue was quite resilient, enabling us to contain the impact of the global recession to a single-digit software revenue decrease. And thanks to the efforts of the entire DS organization, we have been able to protect our operating margin, while maintaining our sales and customer services capacity, as well as increasing our R&D staffing. “Turning to our outlook, we expect 2010 to be a period of slow economic recovery. Nonetheless, within this environment we expect to drive double-digit constant currency new license revenue growth before taking into account the contribution from the IBM PLM acquisition. “Incorporating the IBM PLM acquisition into our financial objectives, assuming it is completed by early April, leads to a target revenue growth of 15% to 17% in constant currencies for 2010 and a target improvement in our operating margin of about 100 basis points in comparison to 2009. “Our outlook for the first quarter assumes normal seasonal factors and the flow-through impact from lower new license sales during 2009 on maintenance growth as well as some conservatism around sales activity as we prepare for the acquisition to close.” 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 has assumed that the acquisition of IBM PLM is completed during the second quarter of 2010 and has incorporated the effects of this transaction for an estimated period of nine months during 2010. The Company’s current objectives are the following:
The non-IFRS objectives set forth above do not take into account the following accounting elements, and are estimated based upon the estimated 2010 currency exchange rates above. They do not take into account the impact the IBM PLM acquisition may have on the following elements: (i) deferred revenue write-downs estimated at approximately €0 million for 2010; (ii) share-based compensation expense estimated at approximately €15 million for 2010, and (iii) amortization of acquired intangibles estimated at approximately €38 million for 2010. The above objectives do not include any impact from other operating income and expense, net principally comprised of notably, acquisition, integration and restructuring expenses. These estimates also do not include any new stock option or share grants, or any new acquisitions or restructurings completed after February 11, 2010. Webcast and Conference Call Information Dassault Systèmes will host an analysts meeting in Paris which will be webcasted and a conference call today, Thursday, February 11, 2010. Management will host the webcast at 10:00 AM time London time/11:00 AM CET time and will then host the conference call at 9:00 AM New York time /2:00 PM London time/3:00 PM CET. 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. 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 DS 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. In preparing such forward-looking statements, the Company has in particular assumed an average U.S. dollar to euro exchange rate of US$1.45 per €1.00 and an average Japanese yen to euro exchange rate of JPY140 to €1.00 for 2010; however, currency values fluctuate, and the Company’s results of operations may be significantly affected by changes in exchange rates. The Company has tried to factor in the potential impact of the current global economic crisis on its 2010 first quarter and full year objectives, but conditions may not improve as the Company has anticipated or could worsen. Further the Company has assumed that its increased responsibility for its direct PLM sales, in particular resulting from the integration of IBM PLM as the acquisition is expected to be completed by early April, 2010, and the resulting commercial and management challenges, will not cause it to incur substantial unanticipated costs and inefficiencies. The Company’s actual results or performance may also be materially negatively affected by the current global economic crisis, difficulties or adverse changes affecting its partners or its relationships with its partners, including the Company’s longstanding, strategic partner, IBM; 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 IBM PLM within DS - the closing of the transaction being expected to be completed by early April, 2010 - and 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 Document de référence, as filed with the French “Autorité des marchés financiers” (AMF) on April 2, 2009, and the Half-Year Financial Report, as filed with the AMF on August 5, 2009, could materially affect the Company’s financial position or results of operations. Non-IFRS Financial Information Readers are cautioned that the supplemental non-IFRS (previously referred to as “adjusted 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, 2008 included in the Company’s 2008 Document de référence filed with the AMF on April 2, 2009. 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 and other income and expense, net (in each case, as explained respectively in the Company’s 2008 Document de référence filed with the AMF on April 2, 2009). 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 115,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systèmes develops and markets PLM application software and services that support industrial processes and 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, and 3DVIA for online 3D lifelike experiences. Dassault Systèmes’ shares are listed on Euronext Paris (#13065, DSY.PA) and Dassault Systèmes’ ADRs may be traded on the US Over-The-Counter (OTC) market (DASTY). For more information, visit http://www.3ds.com CATIA, DELMIA, ENOVIA, SIMULIA, SolidWorks and 3DVIA are registered trademarks of Dassault Systèmes or its subsidiaries in the US and/or other countries. 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 exclude the effects of adjusting the carrying value of acquired companies’ deferred revenue, stock-based compensation expense, amortization of acquired intangible assets, and other operating income and expense, net. Comparable IFRS financial information and a reconciliation of the IFRS and non-IFRS measures are set forth in the proceeding tables.
*In constant currencies DASSAULT SYSTEMES
* Variation compared to the same period in the prior year. ** In constant currencies. DASSAULT SYSTEMES
DASSAULT SYSTEMES
DASSAULT SYSTEMES 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, 2008 filed with the AMF on April 2, 2009. 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.
(1) In the reconciliation schedule above, (i) all non-IFRS adjustments to IFRS revenue data reflect the exclusion of the deferred revenue adjustment; (ii) non-IFRS adjustments to operating expense data reflect the exclusion of the amortization of acquired intangibles, other operating income and expense, net and stock-based compensation expense (as detailed below); (iii) non-IFRS tax adjustments; and (iv) all non-IFRS adjustments to IFRS net income data reflect the combined effect of these non-IFRS adjustments with their related tax effects.
(2) The non-IFRS percentage increase (decrease) compares non-IFRS measures for the two different periods. In the event there is a 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 119.2 million diluted shares for Q4 2009 and 119.1 million diluted shares for Q4 2008. DASSAULT SYSTEMES 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, 2008 filed with the AMF on April 2, 2009. 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.
(1) In the reconciliation schedule above, (i) all non-IFRS adjustments to IFRS revenue data reflect the exclusion of the deferred revenue adjustment; (ii) non-IFRS adjustments to operating expense data reflect the exclusion of the amortization of acquired intangibles, other operating income and expense, net and stock-based compensation expense (as detailed below); (iii) non-IFRS tax adjustments; and (iv) all non-IFRS adjustments to IFRS net income data reflect the combined effect of these non-IFRS adjustments with their related tax effects.
(2) The non-IFRS percentage increase (decrease) compares non-IFRS measures for the two different periods. In the event there is a 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 118.5 million diluted shares for FY 2009 and 119.3 million diluted shares for FY 2008 ContactsDassault Systèmes: |
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