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Dassault Systèmes Confirms 2016 Financial Objectives on Strong 3DEXPERIENCE Platform and Industry Solutions TractionRegulatory News: Dassault Systèmes (Paris:DSY) (Euronext Paris: #13065, DSY.PA), the 3DEXPERIENCE Company, world leader in 3D design software, 3D Digital Mock Up and Product Lifecycle Management (PLM) solutions, today announced IFRS unaudited financial results for the second quarter and six months ended June 30, 2016. These results were reviewed by the Company's Board of Directors on July 20, 2016.
Summary Highlights
"To help our customers innovate and run their businesses at the new levels required for success we have significantly expanded our portfolio coverage and are running our industry solution experiences on the 3DEXPERIENCE platform, in order to integrate and make sense of the large quantities of data," commented Bernard Charlès, Dassault Systèmes Vice Chairman of the Board of Directors and Chief Executive Officer. "This is why we changed our architecture, moving to the 3DEXPERIENCE platform which is data-centric and model-based. The 3DEXPERIENCity program for Smart Nation, revealed at the Singapore World City Summit, is the proof that our platform can scale and integrate high diversity and high volumes of data, in a collaborative environment to optimize and improve city experience for businesses and citizens. Similarly, our Industry Solutions for life sciences powered by the same 3DEXPERIENCE platform offer a collaborative innovation environment for precision medicine and personalized health and will accelerate discoveries in this domain as illustrated by our recent cooperation agreement with INSERM. "At the time we first introduced our architecture we were perhaps ahead of the market, but it is clear now with the addition of the 3DEXPERIENCE platform that we are precisely where we need to be. And the market is confirming this perspective, with 3DEXPERIENCE momentum increasing thanks to transactions across a number of industries and a wide array of companies, from global leaders to start-ups and small professional firms. "Dassault Systèmes' software portfolio now spans a wide spectrum of domains from ideation, modeling, and scientific simulation to production, logistics optimization, and marketing. We are expanding further with the acquisitions of Ortems, extending our global industrial operations software to manufacturing scheduling, and of CST, the technology leader in electromagnetic simulation, significantly enhancing our multi-physics, multi-scale simulation as IoT and smart objects are becoming pervasive in all sectors of the economy and will require new levels of safety and certification processes."
Cash Flow and Other Financial Highlights Net operating cash flow increased 8% to €449.1 million for the six months ended June 30, 2016, compared to €416.8 million for the 2015 First Half, reflecting higher net income. In the 2016 First Half, the Company uses of cash were principally for cash dividends of €101.9 million, share repurchases of €43.3 million, payment for acquisitions net of cash acquired of €11.2 million, and capital expenditures of €18.4 million. The Company received cash for stock options exercised of €10.5 million. The Company's net financial position increased to €1.64 billion at June 30, 2016, compared to €1.35 billion at December 31, 2015, reflecting an increase in cash, cash equivalents and short-term investments to €2.64 billion from €2.35 billion, with long-term debt of €1.00 billion unchanged. Summary of Recent Business, Technology and Customer Highlights Acquisitions On July 21, 2016, Dassault Systèmes announced that it has entered into a definitive agreement to acquire CST, the technology leader in electromagnetic (EM) simulation, for approximately €220 million in an all-cash transaction. Based in Darmstadt, Germany, the privately-held CST will extend Dassault Systèmes capabilities for realistic multiphysics simulation to include full spectrum electromagnetic (EM) simulation. CST's software is used by designers and engineers at more than 2,000 companies in the high-tech, transportation and mobility, aerospace and defense, and energy industries to analyze and solve EM interference, compatibility and environmental effects issues during electronics product development and systems integration. Customers include Airbus Defence and Space, BMW, Continental Automotive, LG, Raytheon, Samsung, and Siemens Energy. The acquisition is expected to be completed in Q4 2016, subject to regulatory approvals. On June 2, 2016 Dassault Systèmes announced the acquisition of Ortems, a key provider of on premise and on the cloud capacity constraint-based production scheduling and dispatching software. The acquisition of Ortems, based in Lyon, France, extends Dassault Systèmes' 3DEXPERIENCE platform and its industry solution experiences for next generation manufacturing, supply chain and delivery, by reinforcing production planning and scheduling along with DELMIA Quintiq supply chain planning and optimization capabilities, in order to plan, execute and optimize global industrial operations in manufacturing industries. Ortems complements Dassault Systèmes' DELMIA brand applications, including DELMIA Apriso, to offer a unified experience to all users in digital manufacturing, manufacturing operations management, and supply chain planning and operations, built on a single referential data model. Customers Announced on June 9, 2016, Dassault Systèmes and Airbus Group Extend Collaboration to Additive Manufacturing. Airbus Group, after a two-year comprehensive benchmarking process, is extending its use of Dassault Systèmes' 3DEXPERIENCE platform to its additive manufacturing programs integrating design, simulation and production. Airbus Group will deploy Dassault Systèmes' collaborative design and simulation applications as part of the "Co-Design to Target" industry solution experience, for the additive manufacturing of tooling, prototyping and parts for test flights and for production use on commercial aircraft. This provides Airbus Group with digital continuity to optimize its conceptual designs by virtually validating each phase of the additive manufacturing process. Dassault Systèmes Awarded Best Supplier by Group PSA in May, 2016. Dassault Systèmes was recognized for its 3DEXPERIENCE platform as a key enabler of the digital transformation of Group PSA's global research and development. Partnerships On June 10, 2016 Dassault Systèmes and Cybernaut Investment Group Announced the Signing of an Agreement to Support Innovation in China with the 3DEXPERIENCE Platform. Dassault Systèmes and Cybernaut, a leading investment group in China focusing on emerging industries, signed a strategic cooperation agreement on a series of 3DEXPERIENCE platform-related projects including building Industry Parks, cultivating 3D talents and smart city programs. Other Corporate Events The Company reaffirmed its 2019 non-IFRS EPS objective of about €3.50 in conjunction with its Capital Markets Day held on June 10, 2016 at its corporate headquarters. The 2019 objective was initially outlined on June 13, 2014 at the Company's prior capital markets day. On May 26, 2016, at the Annual Shareholders' Meeting, Dassault Systèmes' shareholders approved an annual dividend per share equivalent to €0.47 per share for the fiscal year ended December 31, 2015, representing an increase of 9% compared to the prior year. In addition, shareholders again approved offering shareholders the option to receive payment of their dividend in the form of cash or in new Dassault Systèmes shares. The payment of the dividend was completed on June 24, 2016, with the cash payment in the aggregate amount of €100.1 million and the issuance of 280,734 new ordinary shares. On May 26, 2016 at a Board of Directors' meeting, directors approved the appointment of Bernard Charlès as Vice Chairman of the Company's Board of Directors in addition to his role as Chief Executive Officer. Business Outlook Thibault de Tersant, Senior Executive Vice President, CFO, commented, "Our second quarter and first half were well aligned with our financial objectives. And looking ahead we see a second half with significant strength, leading to a year of solid growth in revenue and earnings for 2016, notwithstanding the increased currency headwinds and more volatile macro backdrop we are operating within. "Since the inception of our 2016 guidance in February we anticipated a first half led by recurring software revenue and that is precisely what has occurred. And we said we expected to deliver a marked acceleration in new licenses revenue growth and to make investments to support our future growth trajectory in the second half and that is precisely what we expect to do. "Therefore, we are reconfirming our financial objectives for 2016 thanks to the strong traction coming from 3DEXPERIENCE and industry diversification as well as the improving sales trends in our Professional channel with SOLIDWORKS. "Finally, with respect to the upcoming third quarter, our revenue growth objective reflects a significant improvement in our new licenses revenue performance and continued recurring software revenue strength. Further, taking into account currency headwinds and one-time, R&D tax credit and tax-related benefits in the year-ago period, our EPS growth remains on a double-digit trajectory." The Company's third quarter and full year 2016 financial objectives are as follows:
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 2016 non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2016 principal currency exchange rates above: deferred revenue write-downs estimated at approximately €2 million, share-based compensation expense, including related social charges, estimated at approximately €78 million and amortization of acquired intangibles estimated at approximately €149 million. The above objectives also do not include any impact from other operating income and expense, net principally comprised of acquisition, integration and restructuring expenses, from one-time items included in financial revenue and from one-time tax restructuring gains and losses. Finally, these estimates do not include any new stock option or share grants, or any new acquisitions or restructurings completed after July 21, 2016. Today's Webcast and Conference Call Information Today, Thursday, July 21, 2016, Dassault Systèmes will first host a meeting in Paris, which will be simultaneously webcasted at 9:00 AM London time/10:00 AM Paris time and will then also host a conference call at 9:00 AM New York time/ 2:00 PM London time/3:00 PM Paris time. The webcasted meeting and conference call will be available via the Internet by accessing http://www.3ds.com/investors/. Please go to the website at least 15 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 1 year. Additional investor information can be accessed at http://www.3ds.com/investors/ or by calling Dassault Systèmes' Investor Relations at 33.1.61.62.69.24. Key Investor Relations Events Third Quarter 2016 Earnings, October 25, 2016 Fourth Quarter 2016 Earnings, February 2, 2017 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 Dassault Systèmes 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. The Company's current outlook for 2016 takes into consideration, among other things, an uncertain global economic environment. In light of the continuing uncertainties regarding economic, business, social and geopolitical conditions at the global level, the Company's revenue, net earnings and cash flows may grow more slowly, whether on an annual or quarterly basis. While the Company makes every effort to take into consideration this uncertain macroeconomic outlook, the Company's business results, however, may not develop as anticipated. Furthermore, due to factors affecting sales of the Company's products and services as described above and in the Risk Factors section of the Company's most recent Document de Référence, there may be a substantial time lag between an improvement in global economic and business conditions and an upswing in the Company's business results. In preparing such forward-looking statements, the Company has in particular assumed an average US dollar to euro exchange rate of US$1.15 per €1.00 for the 2016 third quarter and US$1.13 per €1.00 for the full year as well as an average Japanese yen to euro exchange rate of JPY120.0 to €1.00 for the third quarter and JPY122.2 to €1.00 for the full year before hedging; however, currency values fluctuate, and the Company's results of operations may be significantly affected by changes in exchange rates. The Company's actual results or performance may also be materially negatively affected by numerous risks and uncertainties, as described in the "Risk Factors" section of the 2015 Document de Référence, filed with the AMF on March 23, 2016, and also available on the Company's website www.3ds.com. 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, 2015 included in the Company's 2015 Document de Référence filed with the AMF on March 23, 2016. 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, share-based compensation expense and related social charges, the amortization of acquired intangible assets, other operating income and expense, net, certain one-time items included in financial revenue and other, net, and the income tax effect of the non-IFRS adjustments and certain one-time tax effects. 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 "prior" period have first been recalculated using the average exchange rates of the comparable period in the current year, and then compared with the results of the comparable period in the current year. About Dassault Systèmes Dassault Systèmes, the 3DEXPERIENCE Company, provides business and people with virtual universes to imagine sustainable innovations. Its world-leading solutions transform the way products are designed, produced, and supported. Dassault Systèmes' collaborative solutions foster social innovation, expanding possibilities for the virtual world to improve the real world. The group brings value to over 210,000 customers of all sizes, in all industries, in more than 140 countries. For more information, visit www.3ds.com. 3DEXPERIENCE, the Compass logo and the 3DS logo, CATIA, SOLIDWORKS, ENOVIA, DELMIA, SIMULIA, GEOVIA, EXALEAD, 3D VIA, BIOVIA, NETVIBES and 3DEXCITE are registered trademarks of Dassault Systèmes or its subsidiaries in the US and/or other countries. (Tables to Follow) TABLE OF CONTENTS
DASSAULT SYSTEMES Non-IFRS key figures exclude the effects of adjusting the carrying value of acquired companies' deferred revenue, share-based compensation expense and related social charges, amortization of acquired intangible assets, other operating income and expense, net, certain one-time financial revenue items and the income tax effects of these non-IFRS adjustments and certain one-time tax effects. Comparable IFRS financial information and a reconciliation of the IFRS and non-IFRS measures are set forth in the separate tables within this Attachment.
*Variation compared to the same period in the prior year.
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, 2015 filed with the AMF on March 23, 2016. 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 adjustments to IFRS revenue data reflect the exclusion of the deferred revenue adjustment of acquired companies; (ii) adjustments to IFRS operating expense data reflect the exclusion of the amortization of acquired intangibles, share-based compensation expense and related social charges, and other operating income and expense, (iii) adjustments to IFRS financial revenue and other, net reflect the exclusion of certain one-time items included in financial revenue and other, net, and (iv) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted net income per share, the income tax effect of the non-IFRS adjustments and certain one-time tax effects.
(2) The non-IFRS percentage increase (decrease) compares non-IFRS
measures for the two different periods. In the event there is 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.
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, 2015 filed with the AMF on March 23, 2016. 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 adjustments to IFRS revenue data reflect the exclusion of the deferred revenue adjustment of acquired companies; (ii) adjustments to IFRS operating expense data reflect the exclusion of the amortization of acquired intangibles, share-based compensation expense and related social charges, and other operating income and expense, (iii) adjustments to IFRS financial revenue and other, net reflect the exclusion of certain one-time items included in financial revenue and other, net, and (iv) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted net income per share, the income tax effect of the non-IFRS adjustments and certain one-time tax effects.
(2) The non-IFRS percentage increase (decrease) compares non-IFRS measures for the two different periods. In the event there is 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 257.3 million diluted shares for H1 2016 and 255.9 million diluted shares for H1 2015. View source version on businesswire.com: http://www.businesswire.com/news/home/20160720006542/en/ |
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