Dassault Systèmes : Half-year consolidated condensed financial statements as of June 30, 2022

HALF-YEAR FINANCIAL REPORT

JUNE 30, 2022

European company

Share capital: 133,306,419 euros

Registered Office: 10, rue Marcel Dassault - 78140 Vélizy-Villacoublay - France

Versailles Commercial Register under No. 322 306 440

This document is comprised of the English language translation of Dassault Systèmes' Half Year Report, which was filed with the AMF (French Financial Markets Authority) on July 26, 2022 in accordance with Article L.451-1-2 III of the French Monetary and Financial Code.

Only the French version of the Half Year Report is legally binding.

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		Table of Contents
1	RESPONSIBILITY ............................................................................................................................................................	2
1.1 Person Responsible for the Half Year Financial Report...........................................................................................................................	2
1.2 Statement by the Person Responsible for the Half Year Financial Report..............................................................................................	2
2	HALF YEAR ACTIVITY REPORT.....................................................................................................................................	3
2.1 Profile of Dassault Systèmes, the 3DEXPERIENCE Company...............................................................................................................	3
2.2	Risk Factors ...............................................................................................................................................................................................	3
2.3	Financial Performance Review..................................................................................................................................................................	3
	2.3.1 First Half 2022 Executive Overview ..................................................................................................................................................................................	4
	2.3.2 Financial information definitions ........................................................................................................................................................................................	4
	2.3.3 Consolidated Information: Financial Review of First Half 2022 compared to First Half 2021 ..........................................................................................	6
	2.3.4 IFRS non-IFRS reconciliation ............................................................................................................................................................................................	9
	2.3.5 Variability in Quarterly Financial Results.........................................................................................................................................................................	11
	2.3.6 Capital Resources ...........................................................................................................................................................................................................	12
2.4	Related party transactions.......................................................................................................................................................................	12
2.5 2022 First Half Significant Events ...........................................................................................................................................................	13
2.6	2022 Financial Objectives........................................................................................................................................................................	14
3 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE HALF-YEAR ENDED JUNE 30, 2022...............	15
	Consolidated Statements of Income.........................................................................................................................................................................................	15
	Consolidated Statements of Comprehensive Income ..............................................................................................................................................................	16
	Consolidated Balance Sheets ..................................................................................................................................................................................................	17
	Consolidated Statements of Cash Flows .................................................................................................................................................................................	18
	Consolidated Statements of Shareholders' Equity...................................................................................................................................................................	19
	Notes to the Condensed Consolidated Financial Statements for the Half-Year Ended June 30, 2022 ..................................................................................	20
	Note 1 Description of Business ...........................................................................................................................................................................................	21
	Note 2 Summary of Significant Accounting Policies ...........................................................................................................................................................	21
	Note 3	Seasonality ..............................................................................................................................................................................................................	21
	Note 4	Segment Information ...............................................................................................................................................................................................	21
	Note 5	Software Revenue ...................................................................................................................................................................................................	22
	Note 6	Government Grants .................................................................................................................................................................................................	23
	Note 7	Share-based Compensation ....................................................................................................................................................................................	23
	Note 8 Other Operating Income and Expense, Net ............................................................................................................................................................	25
	Note 9 Financial Loss, Net ..................................................................................................................................................................................................	25
	Note 10	Income tax expense ...........................................................................................................................................................................................	26
	Note 11	Trade Accounts Receivable, Net .......................................................................................................................................................................	26
	Note 12	Intangible Assets, Net and Goodwill ..................................................................................................................................................................	26
	Note 13	Borrowings .........................................................................................................................................................................................................	27
	Note 14	Derivatives and Currency and Interest Rate Risk Management .......................................................................................................................	28
	Note 15	Shareholders' Equity ..........................................................................................................................................................................................	29
	Note 16	Consolidated Statements of Cash Flows...........................................................................................................................................................	30
	Note 17	Commitments .....................................................................................................................................................................................................	30
	Note 18	Events after the Reporting Period......................................................................................................................................................................	30
4 STATUTORY AUDITORS' REVIEW REPORT ON THE 2022 HALF-YEARLY FINANCIAL INFORMATION.....................	31

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• RESPONSIBILITY

1.1 Person Responsible for the Half Year Financial Report

Bernard Charlès, Vice-Chairman of the Board of Directors and Chief Executive Officer.

1.2 Statement by the Person Responsible for the Half Year Financial Report

Vélizy-Villacoublay, July 26, 2022

"I hereby declare that, to the best of my knowledge, the 2022 half-year condensed financial statements have been prepared in accordance with the applicable generally accepted accounting standards and provide a true and fair view of the Company's financial position and results of operations and those of all companies included within the scope of consolidation, and that the half year activity report reflects a true view of important events which occurred during the first six months of the year and of their impact on the half year financial statements, of the principal transactions between related parties, as well as the main risks and uncertainties for the remaining six months of the year."

Bernard Charlès

Vice-Chairman of the Board of Directors and Chief Executive Officer

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• HALF YEAR ACTIVITY REPORT

As used herein, "Dassault Systèmes", the "Company", the "Group" and "we" refers to Dassault Systèmes SE and all the companies included in the scope of consolidation. "Dassault Systèmes SE" refers only to the European parent company governed by French law of the Group.

2.1 Profile of Dassault Systèmes, the 3DEXPERIENCE Company

The purpose of Dassault Systèmes is to provide business and people with 3DEXPERIENCE universes to imagine sustainable innovations capable of harmonizing product, nature and life. Dassault Systèmes, the "3DEXPERIENCE Company", is a global leader in sustainable innovation providing a virtual experience platform that allows customers to create innovative products and services, and ultimately address the major challenges faced by the three main sectors of the economy: Manufacturing Industries, Life Sciences & Healthcare, Infrastructure & Cities. Since 1981, the software solutions of Dassault Systèmes transform the way products are designed, simulated, produced, marketed and used, leveraging the virtual world to improve the real world.

Dassault Systèmes is a science based, innovation driven, business minded and long term oriented company. The Company's 21,000 employees all share this same ambition. This also translates into a high level of market confidence and trust among our 300,000 enterprise customers in more than 130 countries. We are a European company with a global presence and market reach.

2.2 Risk Factors

The main risks and uncertainties to which the Group may be exposed during the remaining six months of fiscal year 2022 are presented in Section 1.9 "Risk Factors" of the Company's 2021 Universal registration document filed with the Autorité des marchés financiers ("AMF", the French Financial Markets Authority) on March 17, 2022 and also available on our website www.3ds.com, it being specified that certain information relating to foreign currency and interest rate risks mentioned in said Universal registration document are updated in Note 14 to the Condensed consolidated financial statements for the half-year ended June 30, 2022 "Derivatives and Currency and Interest Rate Risk Management", under Chapter 3 of this Half Year Report "Condensed Consolidated Financial Statements for the Half Year ended June 30, 2022".

2.3 Financial Performance Review

The executive overview in paragraph 2.3.1. "First Half 2022 Executive Overview" highlights selected aspects of our business during the first six months of 2022. Financial Information and definitions should be read together with our Condensed consolidated financial statements and the related notes included in chapter 3 of this Half Year Report "Condensed Consolidated Financial Statements for the Half Year ended June 30, 2022", prepared in accordance with IFRS accounting rules. Unless otherwise indicated, financial information is presented in IFRS.

The supplemental non-IFRS financial information are subject to inherent limitations. They are not based on any comprehensive set of accounting rules or principles and should not be considered in isolation from or as a substitute for IFRS measurements. In addition, Dassault Systèmes' non-IFRS supplementary financial data may not be comparable to other data also called "non-FRS" and used by other companies. A number of specific limitations relating to these measures are detailed in paragraph 2.3.2.2 "Supplemental Non- IFRS Financial Information".

Non-FRS financial information definitions can be found in paragraph 2.3.2.2 "Supplemental Non-IFRS Financial Information". The reconciliation between this financial information and the IFRS framework can be found in paragraph 2.3.4 "IFRS − Non-IFRS Reconciliation".

Unless otherwise indicated, variations in the following tables are related to current exchange rates.

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2.3.1 First Half 2022 Executive Overview

						IFRS								Non-IFRS
			H1 2022		H1 2021				Change		Change in			H1 2022		H1 2021				Change			Change in
(in millions of euros,								cc(2)									cc(2)
except per share data and percentages)
Total Revenue			€ 2,708.5		€ 2,333.7			16%		10%			€ 2,708.6		€ 2,335.1			16%		10%
Software Revenue		2,455.6		2,118.5				16%		10%		2,455.8		2,119.7				16%		9%
Services Revenue		252.8		215.2				18%			12%		252.8		215.4				17%				11%
Operating Margin			23.9%			19.9%				+4.0 pt					33.5%			33.0%				+0.4 pt
Diluted net earnings per share			€ 0.29			€ 0.27			9%						€ 0.54			€ 0.44			20%				13%
("EPS")(1)

1. 2021 and 2022 figures have been presented in order to reflect the five-for-one share split on Dassault Systèmes' share effected on July 7, 2021.
2. in constant currencies.

2.3.2 Financial information definitions

2.3.2.1 Definitions of Key Metrics We Use

Information in Constant Currencies

We have 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 activity, industry, geography 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 expenses (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 by us "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.

While constant currencies 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 U.S. dollars. Therefore, we include this calculation for comparing IFRS revenue figures for comparable periods as well as for comparing non-IFRS revenue figures for comparable periods. All information at constant exchange rates are expressed as a rounded percentage and therefore may not precisely reflect the absolute figures.

Information on Growth excluding acquisitions ("organic growth")

In addition to financial indicators on the entire Group's scope, Dassault Systèmes provides growth excluding acquisitions effect, also named organic growth. In order to do so, the data relating to the scope is restated excluding acquisitions, from the date of the transaction, over a period of 12 months.

Information on Industrial Sectors

Dassault Systèmes' Industries develop Solution Experiences, industry-focused offerings that deliver specific value to companies and users in a particular industry. We serve eleven industries structured into three sectors:

• Manufacturing Industries: Transportation & Mobility; Aerospace & Defense; Marine & Offshore; Industrial Equipment; High- Tech; Home & Lifestyle; Consumer Packaged Goods & Retail;
• Life Sciences & Healthcare: Life Sciences & Healthcare;
• Infrastructure & Cities: Infrastructure, Energy & Materials; Architecture, Engineering & Construction; Cities, Public & Business Services.

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