Dassault Systemes Reports Financial Results Well Aligned with its Guidance, IFRS and non-IFRS Total Revenue up 11% in Q2,Reaffirms its 2020 non-IFRS EPS Objective.
Highlights and Financial Summary
(Unaudited, revenue growth in constant currencies)
Q2 non-IFRS Operating Margin and non-IFRS EPS at high end of guidance reflecting strong operational performance
Q2 IFRS and non-IFRS total revenue up 10% in constant currencies; non-IFRS recurring software up 30% with
Q2 cash flow from operations of
Acquisition of Proxem, specialist in AI-based information semantic processing expanding our collaborative data sciences offer
Confirming FY 2020 Financial Framework with an Objective of 2020 non-IFRS EPS reaching about
In millions of Euros,
except per share data and percentages IFRS IFRS
Q2 2020 Q2 2019 Change Change in constant currencies YTD 2020 YTD 2019 Change Change in constant currencies
Total Revenue 1,068.7 961.4 11% 10% 2,203.3 1,920.3 15% 14%
Software Revenue 958.8 847.4 13% 12% 1,973.0 1,702.7 16% 15%
Operating Margin 10.4% 18.9% (8.6)pts 11.9% 20.7% (8.8)pts
EPS 0.32 0.51 (38)% 0.74 1.13 (34)%
In millions of Euros,
except per share data and percentages Non-IFRS Non-IFRS
Q2 2020 Q2 2019 Change Change in constant currencies YTD 2020 YTD 2019 Change Change in constant currencies
Total Revenue 1,070.6 965.4 11% 10% 2,215.0 1,929.4 15% 14%
Software Revenue 960.5 851.0 13% 12% 1,983.5 1,710.5 16% 15%
Operating Margin 26.7% 30.7% (3.9)pts 28.0% 31.8% (3.7)pts
EPS 0.80 0.82 (2)% (3)% 1.76 1.69 4% 2%
'The lockdown period has accelerated the need for our platform-based design anywhere, virtual production organization adoption, putting people care at the center of all. Thus, never has the Virtual twin experience been more relevant. We are well positioned to help our clients to address key industry trends with new approaches and to ensure these improvements seamlessly connect to future transformations.
'In Life Sciences, the COVID-19 vaccine development world race is revealing the value of leveraging virtual new world, data sciences and analytics, platform-based clinical trials, as well as the game change promise of virtual control arm use to improve performance scope and relevancy of clinical trials on the
'Our BIOVIA and
'Knowledge is very often a prisoner in text. With the acquisition of Proxem, using their natural language processing technologies, we can extract this knowledge from documents and use it through data sciences and data analytics, turning it into experience and enabling our clients to automate their interpretation.
'Finally, more than ever, the virtual world offers an immense opportunity to imagine and help create sustainable innovations for a better future.'
Second Quarter Financial Summary
(Unaudited)
In millions of Euros,
except per share data and percentages IFRS Non-IFRS
Q2 2020 Q2 2019 Change Change in constant currencies Q2 2020 Q2 2019 Change Change in constant currencies
Total Revenue 1,068.7 961.4 11% 10% 1,070.6 965.4 11% 10%
Software Revenue 958.8 847.4 13% 12% 960.5 851.0 13% 12%
Services Revenue 109.9 114.0 (4)% (4)% 110.1 114.4 (4)% (5)%
Operating Margin 10.4% 18.9% (8.6)pts 26.7% 30.7% (3.9)pts
EPS 0.32 0.51 (38)% 0.80 0.82 (2)% (3)%
Total Software Revenue in millions of Euros, except percentages IFRS Non-IFRS
Q2 2020 Q2 2019 Change Change in constant currencies Q2 2020 Q2 2019 Change Change in constant currencies
Second Quarter 2020 versus 2019 Financial Comparisons
Q2 Revenue Review
Total revenue increased 10% (IFRS and non-IFRS), reflecting the inclusion of
Software revenue grew 12% (IFRS and non-IFRS). Non-IFRS recurring software revenue increased 30% reflecting principally increase in Life Sciences, growth in Mainstream Innovation and in Industrial Innovation. Non-IFRS recurring software revenue represented 82% of non-IFRS software revenue in the second quarter. Licenses and other software revenue decreased 32% (IFRS and non-IFRS), largely reflecting the impact of the COVID-19 pandemic reducing end-market demand across a number of industries. (All growth rates are at constant currencies.)
With the addition of
Services revenue decreased 4% (IFRS) and 5% (non-IFRS) on a double-digit decrease in services non-IFRS revenue on an organic basis reflecting the impact of the COVID-19 pandemic on new activities as well as some extensions of timelines on ongoing engagements. (All growth rates are at constant currencies.)
Q2 Operating Review
On an IFRS basis, operating income decreased 39%, reflecting the impact of acquired amortization intangibles. Non-IFRS operating income decreased 3% to
IFRS diluted net income per share was
First Half 2020 versus 2019 Financial Comparisons
(Unaudited)
In millions of Euros,
except per share data and percentages IFRS Non-IFRS
YTD 2020 YTD 2019 Change Change in constant currencies YTD 2020 YTD 2019 Change Change in constant currencies
Total Revenue 2,203.3 1,920.3 15% 14% 2,215.0 1,929.4 15% 14%
Software Revenue 1,973.0 1,702.7 16% 15% 1,983.5 1,710.5 16% 15%
Services Revenue 230.4 217.6 6% 5% 231.5 218.9 6% 5%
Operating Margin 11.9% 20.7% (8.8)pts 28.0% 31.8% (3.7)pts
EPS 0.74 1.13 (34)% 1.76 1.69 4% 2%
Total Software Revenue in millions of Euros, except percentages IFRS Non-IFRS
YTD 2020 YTD 2019 Change Change in constant currencies YTD 2020 YTD 2019 Change Change in constant currencies
H1 Revenue Review
IFRS total revenue increased 14%. On a non-IFRS basis, total revenue also increased 14% on the inclusion of the
IFRS software revenue increased 15%. Non-IFRS software revenue increased 15%, reflecting non-IFRS recurring software revenue growth of 30% with the addition of
On a regional basis and in constant currencies: Non-IFRS software revenue increased 44% in the
By industry sector and in constant currencies, while
For the 2020 First Half, 3DEXPERIENCE non-IFRS software revenue represented 23% (27% in H1 2019) of related non-IFRS software revenue, and included business from customers in Aerospace & Defense, Transportation & Mobility, Industrial Equipment, High Tech, and Marine & Offshore, among others. 3DEXPERIENCE non-IFRS software revenue decreased 16% reflecting both COVID-19 demand disruption in addition to a very high base of comparison (up 40% in H1 2019). (All growth rates in constant currencies.)
Services revenue increased 5% (IFRS and non-IFRS), reflecting the addition of services from
H1 Operating Review
Operating income decreased 34% on an IFRS basis, reflecting the impact of acquired amortization intangibles arising from the
The IFRS effective tax rate was 23.9% (non-IFRS 24.7%) for the 2020 First Half, compared to 28.3% (non-IFRS 28.9%) in the year-ago period. The principal drivers of the decrease in the effective tax rate include the positive impact of the US tax regime on revenues from patents and technology and the last of the US BEAT consequences. These changes were fully recognized both in Q4 2019 for the full year and in the 2020 First Half. In addition, the effective tax rate for the 2020 First Half also reflects a favorable evolution in the geographic mix of taxable income.
IFRS diluted net income per share was
COO & CFO Commentary
'Last quarter we laid out a financial framework for navigating through 2020 in a pre-vaccine COVID-19 world and are seeing that this framework is consistent with our results for this quarter and with our outlook for the full year.
'We delivered second quarter financial results well in line, with key non-IFRS figures - software and recurring software revenue growth, operating margin and earnings per share - at the high end of or slightly above our objectives. Our results underscore the resiliency of our financial model, with a high base of recurring software revenue (82% of total IFRS and non-IFRS software revenue in Q2) and strong operating profitability, while growing R&D resources in total and on an organic basis. While software revenue grew at the high end of our target range, services activities faced headwinds with many companies in lockdown or manufacturing sites with restrictions.
'In Life Sciences, our second largest industry,
'Based upon our results for the First Half and H2 assessment, we are reaffirming our full year financial framework objective targeting non-IFRS earnings per share of about
Financial Objectives Framework for the Third Quarter and 2020 Full Year
The Group has set the following framework as the basis for its third quarter and full year financial objectives. The Group is using these objectives to conduct its internal planning. Key framework assumptions and targeted growth rates, outlined in
A significant deceleration in global GDP for the full year 2020 compared to 2019 and restrictions in a number of industries based upon current governmental plans in the
Non-IFRS recurring software revenue to maintain a strong resilience, while reflecting lower new licenses activity and some increased attrition, leading to growth of recurring revenue in the range of 26% to 27% in constant currencies for FY 2020;
Cost savings targeting to achieve a non-IFRS operating margin in the range of 29.3% to 29.4% for FY 2020 (refining from about 29.5% previously);
Non-IFRS effective tax rate of about 25.2% for FY 2020.
Q3 2020 Framework FY 2020 Framework
Total non-IFRS Revenue
Growth in Constant Currencies +18% to +21% +12% to +13%
Non-IFRS operating Margin 26.0% to 26.5% 29.3% to 29.4%
Non-IFRS EPS
Non-IFRS EPS Growth -4% to +3% +1% to +3%
US dollar
Japanese yen (before hedging)
These framework objectives are prepared and communicated only on a non-IFRS basis and are subject to the cautionary statement set forth below.
The 2020 non-IFRS financial objectives framework set forth above do not take into account the following accounting elements below and are estimated based upon the 2020 principal currency exchange rates above: contract liabilities write-downs estimated at approximately
Cash Flow and Balance Sheet Information
For the 2020 First Half, the Group's principal sources of liquidity were cash from operations aggregating
Summary of Recent Business, Technology and Customer Announcements
On
Dassault Systemes Acquires Proxem to Extend Information Intelligence on the 3DEXPERIENCE Platform. On
Today's Webcast and Conference Call Information
Today,
Additional investor information can be accessed at www.3ds.com/investors/ or by calling
Key Investor Relations Events
Third Quarter 2020 Earnings Release:
Capital Market Day:
Fourth Quarter 2020 Earnings Release:
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 Group's non-IFRS financial performance objectives or framework, are forward-looking statements. Such forward-looking statements are based on
The Group's current framework for 2020 takes into consideration, among other things, an uncertain global economic environment. In light of the uncertainties regarding economic, business, social, health and geopolitical conditions at the global level,
the deployment of
the political, economic and monetary situation in certain geographic regions where
health conditions in some geographic areas where
continued pressure or volatility on raw materials and energy prices could also slow down
The economic context (as notably caused by the COVID-19 pandemic crisis) may also adversely impact the financial situation or financing capabilities of the
The Group'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 2019 Document d'enregistrement universel (Annual Report) filed with the AMF (
In preparing such forward-looking statements, the Group has in particular assumed an average US dollar to euro exchange rate of
Non-IFRS Financial Information
Readers are cautioned that the supplemental non-IFRS information presented in this press release is subject to inherent limitations. This information is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRS measurements. In addition, the Group'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 Group's 2019 Document d'enregistrement universel (Annual Report) filed with the AMF on
In the tables accompanying this press release the Group 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 and of tangibles reevaluation, certain other operating income and expense, net, including impairment of goodwill and acquired intangibles, the effect of adjusting lease incentives of acquired companies, 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.
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APPENDIX TABLE OF CONTENTS
(Due to rounding, numbers presented throughout this and other documents may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures).
Glossary of Definitions
Non-IFRS Financial Information
Condensed consolidated statements of income
Condensed consolidated balance sheets
Condensed consolidated cash flow statements
IFRS - non-IFRS reconciliation
Information in Constant Currencies
We have followed a long-standing policy of measuring our revenue performance and setting our revenue objectives exclusive of currency in order to measure in a transparent manner the underlying level of improvement in our total revenue and software revenue by type, industry, region and product lines. We believe it is helpful to evaluate our growth exclusive of currency impacts, particularly to help understand revenue trends in our business. Therefore, we provide percentage increases or decreases in our revenue and EPS (in both IFRS as well as non-IFRS) to eliminate the effect of changes in currency values, particularly the
While constant currency calculations are not considered to be an IFRS measure, we do believe these measures are critical to understanding our global revenue results and to compare with many of our competitors who report their financial results in
Information on Growth excluding acquisitions ('organic growth')
In addition to discussing total growth, we also provide financial information where we discuss growth excluding acquisitions or growth on an organic basis as used alternatively. In both cases, growth excluding acquisitions have been calculated using the following restatements of the scope of consolidation: for entities entering the consolidation scope in the current year, subtracting the contribution of the acquisition from the aggregates of the current year, and for entities entering the consolidation scope in the previous year, subtracting the contribution of the acquisition from
Information on Industrial Sectors
Information on Product Lines
Commencing with the first quarter of 2020 and as previously disclosed, we have introduced a new presentation of our product lines to reflect our broader ambitions. Our new product line financial reporting includes: 1) Industrial Innovation software revenue, comprised of our CATIA, ENOVIA, SIMULIA, DELMIA, GEOVIA,
3DEXPERIENCE Licenses and Software Contribution
To measure the progressive penetration of 3DEXPERIENCE software, we utilize the following ratios: a) for Licenses revenue, we calculate the percentage contribution by comparing total 3DEXPERIENCE Licenses revenue to Licenses revenue for all product lines except SOLIDWORKS and acquisitions ('related Licenses revenue'); and, b) for software revenue, the Group calculates the percentage contribution by comparing total 3DEXPERIENCE software revenue to software revenue for all product lines except SOLIDWORKS and acquisitions ('related software revenue').
NON-IFRS FINANCIAL INFORMATION
(unaudited; in millions of Euros, except per share data, percentages, headcount and exchange rates)
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 and of tangible assets revaluation, lease incentives of acquired companies, other operating income and expense, net, including the impairment of goodwill and acquired intangible assets, certain one-time financial revenue items and the income tax effects of these non-IFRS adjustments.
Comparable IFRS financial information and a reconciliation of the IFRS and non-IFRS measures are set forth in the separate tables within this Attachment.
In millions of Euros, except per share data, percentages, headcount and exchange rates Non-IFRS reported
Three months ended Six months ended
2020 June 30,
2019 Change Change in constant currencies
2020 June 30,
2019 Change Change in constant currencies
Revenue
Revenue breakdown by activity
Software revenue 960.5 851.0 13% 12% 1,983.5 1,710.5 16% 15%
Of which licenses and other software revenue 169.3 248.5 (32)% (32)% 341.5 461.8 (26)% (27)%
Of which subscription and support revenue 791.2 602.5 31% 30% 1,641.9 1,248.7 31% 30%
Services revenue 110.1 114.4 (4)% (5)% 231.5 218.9 6% 5%
Software revenue breakdown by product line
Industrial Innovation 545.7 597.1 (9)% (9)% 1,150.7 1,202.2 (4)% (5)%
Of which CATIA 251.5 280.4 (10)% (11)% 522.6 550.5 (5)% (6)%
Of which ENOVIA (1) 83.5 93.4 (11)% (11)% 164.1 182.4 (10)% (11)%
Life Sciences (2) 193.8 30.5 536% 526% 388.8 69.7 457% 446%
Mainstream Innovation 221.0 223.5 (1)% (2)% 444.0 438.5 1% (0)%
Of which SOLIDWORKS 198.5 202.8 (2)% (3)% 400.0 394.2 1% (0)%
Revenue breakdown by geography
Operating income
Operating margin 26.7% 30.7% 28.0% 31.8%
Net income attributable to shareholders
Diluted net income per share
Closing headcount 21,443 17,623 22% 21,443 17,623 22%
Average Rate USD per
Average Rate JPY per
(1) Excluding ENOVIA Life Sciences Compliance and Quality Management (Q2 2019:
(2) Including ENOVIA Life Sciences Compliance and Quality Management (Q2 2019:
ACQUISITIONS AND FOREIGN EXCHANGE IMPACT
(unaudited; in millions of Euros)
In millions of Euros Non-IFRS reported o/w growth at constant rate and scope o/w change of scope impact at current year rate o/w FX impact on previous year figures
2020 June 30,
2019 Change
Revenue QTD 1,070.6 965.4 105.2 (82.1) 180.2 7.1
Revenue YTD 2,215.0 1,929.4 285.6 (91.1) 355.6 21.1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (IFRS)
(unaudited; in millions of Euros, except per share data and percentages)
In millions of Euros, except per share data and percentages IFRS reported
Three months ended Six months ended
2020 2019 2020 2019
Licenses and other software revenue 169.3 248.5 341.5 461.8
Subscription and Support revenue 789.5 598.9 1,631.4 1,240.9
Software revenue 958.8 847.4 1,973.0 1,702.7
Services revenue 109.9 114.0 230.4 217.6
Total Revenue
Cost of software revenue (1) (76.3) (44.6) (152.8) (89.8)
Cost of services (108.0) (105.7) (227.9) (206.3)
Research and development (243.4) (176.9) (473.6) (357.2)
Marketing and sales (315.9) (300.5) (647.2) (591.7)
General and administrative (101.0) (75.7) (198.4) (152.3)
Amortization of acquired intangible assets and of tangible assets revaluation (100.5) (50.9) (209.9) (101.0)
Other operating income and expense, net (12.9) (24.9) (31.8) (24.0)
Total Operating Expenses (958.0) (779.3) (1,941.7) (1,522.4)
Operating Income
Financial income (loss), net (6.5) 0.2 (13.0) 5.3
Income before income taxes
Income tax expense (24.1) (51.1) (59.4) (114.0)
Net Income
Non-controlling interest 2.9 2.8 6.1 5.6
Net Income attributable to equity holders of the parent
Basic net income per share 0.32 0.52 0.75 1.14
Diluted net income per share
Basic weighted average shares outstanding (in millions) 260.2 259.5 260.0 259.2
Diluted weighted average shares outstanding (in millions) 262.7 261.1 262.8 260.8
(1) Excluding amortization of acquired intangible assets and of tangible assets revaluation
IFRS reported
Three months ended
Change (4) Change in constant currencies Change (4) Change in constant currencies
Revenue 11% 10% 15% 14%
Revenue by activity
Software revenue 13% 12% 16% 15%
Services revenue (4)% (4)% 6% 5%
Software Revenue by product line
Industrial Innovation (9)% (9)% (4)% (5)%
Of which CATIA (10)% (11)% (5)% (6)%
Of which ENOVIA (2) (11)% (11)% (10)% (11)%
Life Sciences (3) 536% 526% 448% 437%
Mainstream Innovation 0% (1)% 3% 1%
Of which SOLIDWORKS (2)% (3)% 1% (0)%
Revenue by geography
(2) Excluding ENOVIA Life Sciences Compliance and Quality Management (Q2 2019:
(3) Including ENOVIA Life Sciences Compliance and Quality Management (Q2 2019:
(4) Variation compared to the same period in the prior year
CONDENSED CONSOLIDATED BALANCE SHEETS (IFRS)
(unaudited; in millions of Euros)
In millions of Euros IFRS reported
2020 2019
ASSETS
Cash and cash equivalents 2,399.7 1,944.9
Accounts receivable, net 965.3 1,319.2
Contract assets 29.0 26.9
Other current assets 302.9 378.0
Total current assets 3,696.8 3,669.0
Property and equipment, net 920.2 899.7
Other non-current assets 418.1 386.9
Total non-current assets 10,110.2 10,203.7
Total Assets
LIABILITIES AND EQUITY
Accounts payable 148.3 220.0
Contract liabilities 1,164.1 1,093.5
Borrowings, current 7.8 4.4
Other current liabilities 732.8 816.0
Total current liabilities 2,053.0 2,133.8
Borrowings, non-current 4,600.1 4,596.8
Other non-current liabilities 1,790.0 1,879.4
Total non-current liabilities 6,390.1 6,476.2
Non-controlling interests 48.2 53.9
Parent shareholders' equity 5,315.7 5,208.7
Total Liabilities and equity
CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (IFRS)
(unaudited; in millions of Euros)
In millions of Euros IFRS reported
Three months ended Six months ended
2020 2019 2020 2019
Net income attributable to equity holders of the parent 83.0 134.1 (51.1) 195.4 294.9 (99.5)
Non-controlling interest (2.9) (2.8) (0.0) (6.1) (5.6) (0.5)
Net income 80.1 131.2 (51.1) 189.3 289.3 (100.0)
Depreciation of property and equipment 42.8 33.6 9.3 91.7 65.3 26.5
Amortization of intangible assets 103.4 53.3 50.2 216.2 105.5 110.7
Adjustments for other non-cash items 20.1 18.8 1.3 69.8 47.3 22.6
Changes in working capital 150.5 168.2 (17.7) 287.9 386.3 (98.4)
Net Cash Provided by (Used in) Operating Activities
Additions to property, equipment and intangibles (27.1) (23.2) (4.0) (87.4) (48.2) (39.2)
Payment for acquisition of businesses, net of cash acquired (19.5) (2.2) (17.3) (19.5) (402.8) 383.3
Other 0.6 (14.0) 14.6 2.4 (17.1) 19.5
Net Cash Provided by (Used in) Investing Activities EUR ( 46.0) EUR ( 39.4) EUR ( 6.7) EUR ( 104.4) EUR ( 468.1) EUR 363.7
Proceeds from exercise of stock options 23.6 32.5 (8.9) 47.3 46.0 1.3 Cash dividends paid (182.5) (168.8) (13.7) (182.5) (168.8) (13.7) Repurchase and sale of treasury stock 3.4 0.6 2.9 (104.7) 9.2 (113.8)
Proceeds from borrowings 0.3 - 0.3 1.8 - 1.8
Repayment of borrowings - - - - (0.8) 0.8
Repayment of lease liabilities (21.8) (20.3) (1.5) (47.4) (37.3) (10.1)
Net Cash Provided by (Used in) Financing Activities EUR ( 176.9) EUR ( 156.0) EUR ( 20.9) EUR ( 285.4) EUR ( 151.7) EUR ( 133.6)
Effect of exchange rate changes on cash and cash equivalents (18.0) (12.9) (5.1) (10.5) 9.7 (20.2)
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
SUPPLEMENTAL NON-IFRS FINANCIAL INFORMATION
IFRS - NON-IFRS RECONCILIATION
(unaudited; in millions of Euros, except per share data and percentages)
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 Group'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 Group's Document d'Enregistrement Universel for the year ended
In millions of Euros, except per share data and percentages Three months ended
2020 Adjustment(1) 2020 2019 Adjustment(1) 2019 IFRS Non-IFRS(4)
IFRS Non-IFRS IFRS Non-IFRS
Total Revenue
Total Revenue breakdown by activity
Software revenue 958.8 1.7 960.5 847.4 3.6 851.0 13% 13%
Licenses and other software revenue 169.3 169.3 248.5 248.5 (32)% (32)%
Subscription and Support revenue 789.5 1.7 791.2 598.9 3.6 602.5 32% 31%
Recurring portion of Software revenue 82% 82% 71% 71%
Services revenue 109.9 0.2 110.1 114.0 0.4 114.4 (4)% (4)%
Total Software Revenue breakdown by product line
Industrial Innovation 545.6 0.0 545.7 597.1 597.1 (9)% (9)%
Of which CATIA 251.5 251.5 280.4 280.4 (10)% (10)%
Of which ENOVIA (2) 83.5 83.5 93.4 93.4 (11)% (11)%
Life Sciences (3) 192.3 1.5 193.8 30.2 0.2 30.5 536% 536%
Mainstream Innovation 220.9 0.1 221.0 220.1 3.3 223.5 0% (1)%
Of which SOLIDWORKS 198.5 198.5 202.8 202.8 (2)% (2)%
Total Revenue breakdown by geography
Total Operating Expenses EUR ( 958.0) EUR
Share-based compensation expense and related social charges (59.4) 59.4 - (34.2) 34.2 -
Amortization of acquired intangible assets and of tangible assets revaluation (100.5) 100.5 - (50.9) 50.9 -
Lease incentives of acquired companies (0.7) 0.7 - - - -
Other operating income and expense, net (12.9) 12.9 - (24.9) 24.9 -
Operating Income
Operating Margin 10.4% 26.7% 18.9% 30.7%
Financial income (loss), net (6.5) 0.3 (6.2) 0.2 (0.2) (0.1) N/A N/A
Income tax expense (24.1) (46.2) (70.3) (51.1) (32.2) (83.3) (53)% (16)%
Non-controlling interest 2.9 (1.3) 1.6 2.8 (1.6) 1.2 1% 33%
Net Income attributable to shareholders
Diluted Net Income Per Share
(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 intangible assets and of tangible assets revaluation, share-based compensation expense and related social charges, and lease incentives of acquired companies, as detailed below, and other operating income and expense, net including impairment of goodwill and acquired intangible assets (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, certain one-time tax effects and the income tax effect of the non-IFRS adjustments.
In millions of Euros, except percentages Three months ended
2020
IFRS Share-based compensation expense and related social charges Lease incentives of acquired companies 2020
Non-IFRS 2019
IFRS Share-based compensation expense and related social charges Lease incentives of acquired companies 2019
Non-IFRS IFRS Non-
IFRS
Cost of revenue (184.3) 2.1 0.2 (182.0) (150.4) 1.5 - (148.8) 23% 22%
Research and development (243.4) 23.0 0.3 (220.1) (176.9) 14.0 - (162.9) 38% 35%
Marketing and sales (315.9) 16.6 0.1 (299.2) (300.5) 10.7 - (289.8) 5% 3%
General and administrative (101.0) 17.8 0.2 (83.0) (75.7) 8.0 - (67.7) 34% 23%
Total
(2) Excluding ENOVIA Life Sciences Compliance and Quality Management (Q2 2019:
(3) Including ENOVIA Life Sciences Compliance and Quality Management (Q2 2019:
(4) 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.
(5) Based on a weighted average 262.7 million diluted shares for Q2 2020 and 261.1 million diluted shares for Q2 2019.
SUPPLEMENTAL NON-IFRS FINANCIAL INFORMATION
IFRS - NON-IFRS RECONCILIATION
(unaudited; in millions of Euros, except per share data and percentages)
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 Group'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 Group's Document d'Enregistrement Universel for the year ended
In millions of Euros, except per share data and percentages Six months ended
2020 Adjustment(1) 2020 2019 Adjustment(1) 2019 IFRS Non-IFRS(4)
IFRS Non-IFRS IFRS Non-IFRS
Total Revenue
Total Revenue breakdown by activity
Software revenue 1,973.0 10.5 1,983.5 1,702.7 7.8 1,710.5 16% 16%
Licenses and other software revenue 341.5 341.5 461.8 461.8 (26)% (26)%
Subscription and Support revenue 1,631.4 10.5 1,641.9 1,240.9 7.8 1,248.7 31% 31%
Recurring portion of Software revenue 83% 83% 73% 73%
Services revenue 230.4 1.1 231.5 217.6 1.3 218.9 6% 6%
Total Software Revenue breakdown by product line
Industrial Innovation 1,150.0 0.8 1,150.7 1,202.2 1,202.2 (4)% (4)%
Of which CATIA 521.8 0.8 522.6 550.5 550.5 (5)% (5)%
Of which ENOVIA (2) 164.1 164.1 182.4 182.4 (10)% (10)%
Life Sciences (3) 379.4 9.3 388.8 69.2 0.5 69.7 448% 457%
Mainstream Innovation 443.5 0.4 444.0 431.2 7.3 438.5 3% 1%
Of which SOLIDWORKS 400.0 400.0 394.2 394.2 1% 1%
Total Revenue breakdown by geography
Total Operating Expenses EUR ( 1,941.7) EUR
Share-based compensation expense and related social charges (103.8) 103.8 - (80.5) 80.5 -
Amortization of acquired intangible assets and of tangible assets revaluation (209.9) 209.9 - (101.0) 101.0 -
Lease incentives of acquired companies (1.5) 1.5 - - - -
Other operating income and expense, net (31.8) 31.8 - (24.0) 24.0 -
Operating Income
Operating Margin 11.9% 28.0% 20.7% 31.8%
Financial income (loss), net (13.0) 0.5 (12.5) 5.3 (1.2) 4.1 (344)% (402)%
Income tax expense (59.4) (90.7) (150.1) (114.0) (64.5) (178.5) (48)% (16)%
Non-controlling interest 6.1 (2.6) 3.5 5.6 (3.4) 2.2 8% 59%
Net Income attributable to shareholders
Diluted Net Income Per Share
(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 intangible assets and of tangible assets revaluation, share-based compensation expense and related social charges, and lease incentives of acquired companies, as detailed below, and other operating income and expense, net including impairment of goodwill and acquired intangible assets (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, certain one-time tax effects and the income tax effect of the non-IFRS adjustments.
In millions of Euros, except percentages Six months ended
2020
IFRS Share-based compensation expense and related social charges Lease incentives of acquired companies 2020
Non-IFRS 2019
IFRS Share-based compensation expense and related social charges Lease incentives of acquired companies 2019
Non-IFRS IFRS Non-
IFRS
Cost of revenue (380.7) 6.0 0.4 (374.3) (296.1) 3.5 - (292.6) 29% 28%
Research and development (473.6) 36.8 0.7 (436.2) (357.2) 34.9 - (322.3) 33% 35%
Marketing and sales (647.2) 30.2 0.2 (616.8) (591.7) 23.1 - (568.6) 9% 8%
General and administrative (198.4) 30.9 0.2 (167.3) (152.3) 19.0 - (133.3) 30% 26%
Total
(2) Excluding ENOVIA Life Sciences Compliance and Quality Management (YTD 2019:
(3) Including ENOVIA Life Sciences Compliance and Quality Management (YTD 2019:
(4) 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.
(5) Based on a weighted average 262.8 million diluted shares for H1 2020 and 260.8 million diluted shares for H1 2019.
Attachment
Dassault Systemes Reports Financial Results Well Aligned with its Guidance, IFRS and non-IFRS Total Revenue up 11% in Q2, Reaffirms its 2020 non-IFRS EPS Objective
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