Earnings Release • Jul 26, 2022
Earnings Release
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Press Release
VELIZY-VILLACOUBLAY, France — July 26, 2022
Dassault Systèmes (Euronext Paris: FR0014003TT8, DSY.PA), today announced IFRS unaudited financial results for the second quarter and half year ended June 30, 2022. The Group's Board of Directors approved these results on July 25, 2022. This press release also includes financial information on a non-IFRS basis and reconciliations with IFRS figures in the Appendix to this communication.
(unaudited, all revenue growth rates in constant currencies)
"The experience economy and the circular economy are converging: this will mark the coming decades. As we look to our next horizon, 2040, industries will no longer develop products but sustainable and personalized experiences centered around the consumer, patient and citizen.
The experience economy goes hand in hand with circularity as it requires designing the entire experience life cycle upstream, integrating use with end of life. Circularity is about frugality – using only what's necessary – and appreciating all things created by humankind will have an end: the raw materials that compose them can be repurposed, reused and recycled. This will revolutionize design and open up significant new possibilities we can't yet imagine.
Science-based virtual twin experiences, powered by 3DEXPERIENCE, are unparalleled catalysts and enablers of this global transformation. Based on a multi-scale, multi-physics approach and incorporating real world evidence, our virtual twin experiences empower clients to imagine new methods, new materials and test new solutions. By providing continuity across the WHAT, the HOW and the USE, innovators can anticipate the recycling of products from their design and manufacturing to quantify the environmental impacts and optimize circularity.
IFWE utilize the power of the virtual world to improve the real world, we can advance our purpose – to harmonize product, nature and life."
| In millions of Euros, | IFRS | IFRS | ||||||
|---|---|---|---|---|---|---|---|---|
| except per share data and percentages |
Q2 2022 | Q2 2021 | Change | Change in constant currencies |
YTD 2022 | YTD 2021 | Change | Change in constant currencies |
| Total Revenue | 1,383.9 | 1,160.8 | 19% | 11% | 2,708.5 | 2,333.7 | 16% | 10% |
| Software Revenue | 1,250.1 | 1,050.7 | 19% | 11% | 2,455.6 | 2,118.5 | 16% | 10% |
| Operating Margin | 22.5% | 20.1% | +2.4pts | 23.9% | 19.9% | +4.0pts | ||
| Diluted EPS * | 0.09 | 0.14 | (32)% | 0.29 | 0.27 | 9% | ||
| In millions of Euros, | Non-IFRS | Non-IFRS | ||||||
| except per share data | Change in | Change in |
| In millions of Euros, | Non-IFRS | Non-IFRS | ||||||
|---|---|---|---|---|---|---|---|---|
| except per share data and percentages |
Q2 2022 | Q2 2021 | Change | Change in constant currencies |
YTD 2022 | YTD 2021 | Change | Change in constant currencies |
| Total Revenue | 1,384.0 | 1,161.5 | 19% | 11% | 2,708.6 | 2,335.1 | 16% | 10% |
| Software Revenue | 1,250.2 | 1,051.3 | 19% | 11% | 2,455.8 | 2,119.7 | 16% | 9% |
| Operating Margin | 32.0% | 32.2% | (0.2)pt | 33.5% | 33.0% | +0.4pt | ||
| Diluted EPS * | 0.26 | 0.22 | 21% | 11% | 0.54 | 0.44 | 20% | 13% |
* 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
(unaudited, all revenue growth rates in constant currencies)
o Industrial Innovation IFRS and non-IFRS software revenue rose 11% to €662.2 million, representing 53% of software revenue. CATIA grew double-digits again this quarter with continued strength in cyber systems, reflecting the strong value proposition of its differentiated technology. ENOVIA and DELMIA also demonstrated noteworthy strength this quarter, rising double-digits. DELMIA benefited from increased demand from clients seeking to improve manufacturing efficiency and resiliency.
(unaudited, all revenue growth rates in constant currencies)
increased 44 basis points to 33.5%.
(revenue growth rates in constant currencies, data on a non-IFRS basis)
"We are pleased with our second quarter and half-year results. Our strong performance was driven by broad-based growth across geographies, product lines and industries. We have demonstrated once again the resilience of our strategy against a challenging macroeconomic and geopolitical backdrop, with an impact from Russia and China. In Industrial Innovation, CATIA, ENOVIA and DELMIA delivered double-digit growth. DELMIA benefitted from increased interest in manufacturing transformation. In Life Sciences, MEDIDATA maintained its strong velocity. In Mainstream Innovation, Centric PLM delivered excellent performance.
Today's challenging environment - from inflation to raw material and workforce shortages reveals the value and mission critical nature of our industry solutions. We empower clients to adopt new business models, increase resiliency, design and produce in a circular economy and to deploy rapidly at scale. Our strong customer adoption, across all three sectors of the economy, offers many proof points this quarter.
We are also supporting our customers as they innovate for the future. With our 3DEXPERIENCE IFWE Loop, we create a multiplier effect by connecting value creation and value experienced to cover the full experience lifecycle. This allows us to broaden our offering as well as expand our audience, ultimately increasing the value we create for clients.
We succeed when our clients succeed: we thank our clients for their continued trust and our team for their passion and dedication to our success.
(revenue growth rates in constant currencies, data on a non-IFRS basis, cash flow IFRS)
"We delivered strong second quarter results, wrapping up a good first half of the year and putting us on the trajectory to achieve our 2022 objectives. Our financial performance demonstrates the strength and durability of our business model as well as reflects continued momentum in demand from our clients. Second quarter total revenue grew 11%, at the high end of our guided range. Subscription and support revenue growth accelerated to 10%, above our guided range. Recurring revenue represented nearly 80% of software revenue in the first half of the year. Licenses and other software revenue increased 14% during the quarter.
Our second quarter diluted earnings per share rose 21% to €0.26, outperforming our objective. We reported operating margin of 32.0%, within our target range, as we continued to invest in our future growth, including achieving our net hiring targets again this quarter. Cash flow from operations rose 7% to €417 million in Q2.
Turning to our 2022 objectives, we are maintaining our total revenue growth objective of 9%-10%. We are raising our 2022 diluted EPS objective to 14%-16% growth, reaching €1.08 to €1.10, incorporating a portion of our second quarter over-performance, as well as a positive currency impact and lower tax rate."
Dassault Systèmes' third quarter and full year 2022 financial objectives presented below are given on a non-IFRS basis and reflect the principal 2022 currency exchange rate assumptions for the US dollar and Japanese yen as well as the potential impact from additional non-Euro currencies:
| Q3 2022 | FY 2022 | |
|---|---|---|
| Total Revenue (billion) | €1.295 to €1.320 | €5.485 to €5.535 |
| Growth | 12-14% | 13-14% |
| Growth ex FX | 8-10% | 9-10% |
| Software revenue growth * | 8-10% | 9-10% |
| Of which licenses and other software revenue growth * |
6-10% | 9-11% |
| Of which recurring revenue growth * | ~9% | ~9% |
| Services revenue growth * | 11-13% | 8-10% |
| Operating Margin | 31.1% – 31.8% | 33.4% – 33.7% |
| EPS Diluted | €0.24 - €0.25 | €1.08 - €1.10 |
| Growth | 6-11% | 14-16% |
| US dollar | \$1.10 per Euro | \$1.10 per Euro |
| Japanese yen (before hedging) | JPY 130.0 per Euro | JPY 132.2 per Euro |
* Growth in Constant Currencies
These objectives are prepared and communicated only on a non-IFRS basis and are subject to the cautionary statement set forth below.
The 2022 non-IFRS financial objectives set forth above do not take into account the following accounting elements below and are estimated based upon the 2022 principal currency exchange rates above: no significant contract liabilities write-downs; share-based compensation expenses, including related social charges, estimated at approximately €170.9 million (these estimates do not include any new stock option or share grants issued after June 30, 2022); amortization of acquired intangibles and of tangibles reevaluation, estimated at approximately €383.5 million, largely impacted by the acquisition of Medidata; and lease incentives of acquired companies at approximately €2.7 million.
The above objectives also do not include any impact from other operating income and expenses, net principally comprised of acquisition, integration and restructuring expenses, and impairment of goodwill and acquired intangible assets; from one-time items included in financial revenue; from one-time tax effects; and from the income tax effects of these non-IFRS adjustments. Finally, these estimates do not include any new acquisitions or restructuring completed after June 30, 2022.
Today, Tuesday, July 26, 2022, Dassault Systèmes will host a webcasted presentation at 9:00 AM London Time/ 10:00 AM Paris time, and will then host a conference call at 9:00 AM New York time / 2:00 PM London time / 3:00 PM Paris time. The webcasted presentation and conference calls will be available online by accessing investor.3ds.com.
Additional investor information is available at investor.3ds.com or by calling Dassault Systèmes' Investor Relations at +33.1.61.62.69.24.
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 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 Group's actual results or performance may be materially negatively affected by numerous risks and uncertainties, as described in the "Risk Factors" section 1.9 of the 2021 Universal Registration Document ('Document d'enregistrement universel') filed with the AMF (French Financial Markets Authority) on March 17, 2022, available on the Group's website www.3ds.com.
In particular, please refer to the risk factor "Uncertain Global Economic Environment" in section 1.9.1.1 of the 2021 Universal Registration Document set out below for ease of reference:
"In light of the uncertainties regarding economic, business, social, health and geopolitical conditions at the global level, Dassault Systèmes' revenue, net earnings and cash flows may grow more slowly, whether on an annual or quarterly basis, mainly due to the following factors:
business, for example, due to stricter export compliance rules or the introduction of new customs tariffs;
The occurrence of crises – health and geopolitical crises in particular – could have consequences for the health and safety of Dassault Systèmes' employees. It could also adversely impact the financial situation or financing capabilities of Dassault Systèmes' existing and potential customers, commercial and technology partners, some of whom may be forced to temporarily close sites or cease operations. A deteriorating economic environment could generate increased price pressure and affect the collection of receivables, which would negatively impact Dassault Systèmes' revenue, financial performance and market position.
Dassault Systèmes makes every effort to take into consideration this uncertain macroeconomic outlook. Dassault Systèmes' business results, however, may not develop as anticipated. Furthermore, due to factors affecting sales of Dassault Systèmes' products and services, 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 Group has in particular assumed an average US dollar to euro exchange rate of US\$1.10 per €1.00 as well as an average Japanese yen to euro exchange rate of JPY130.0 to €1.00, before hedging for the third and fourth quarters 2022. The Group has in particular assumed an average US dollar to euro exchange rate of US\$1.10 per €1.00 as well as an average Japanese yen to euro exchange rate of JPY132.2 to €1.00, before hedging for the full year 2022. However, currency values fluctuate, and the Group's results may be significantly affected by changes in exchange rates.
Readers are cautioned that the supplemental non-IFRS financial 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 in isolation from or as a substitute for IFRS measurements. The supplemental non-IFRS financial information should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with IFRS. Furthermore, the Group's supplemental non-IFRS financial information may not be comparable to similarly titled "non-IFRS" measures used by other companies. Specific limitations for individual non-IFRS measures are set forth in the Company's 2021 Universal Registration Document filed with the AMF on March 17, 2022.
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.
Dassault Systèmes' 3DEXPERIENCE platform, 3D design software, 3D Digital Mock Up and Product Lifecycle Management (PLM) solutions: http://www.3ds.com
Connect with Dassault Systèmes on
Dassault Systèmes, the 3DEXPERIENCE Company, is a catalyst for human progress. We provide business and people with collaborative 3D virtual environments to imagine sustainable innovations. By creating virtual twin experiences of the real world with our 3DEXPERIENCE platform and applications, our customers push the boundaries of innovation, learning and production to achieve a more sustainable world for patients, citizens, and consumers. Dassault Systèmes brings value to more than 300,000 customers of all sizes, in all industries, in more than 140 countries. For more information, visit www.3ds.com
Béatrix Martinez / François-José Bordonado: Arnaud de Cheffontaines: +33 1 47 03 69 48 +33 1 61 62 40 73 / 69 24 Jamie Ricketts : +44 20 3727 1600 [email protected] Tom Blundell: +44 20 3727 1600 USA & Canada: [email protected]
Arnaud Malherbe +33 (0)1 61 62 87 73 [email protected]
© Dassault Systèmes. All rights reserved. 3DEXPERIENCE, the Compass icon, the 3DS logo, CATIA, BIOVIA, GEOVIA, SOLIDWORKS, 3DVIA, ENOVIA, NETVIBES, MEDIDATA, CENTRIC PLM, 3DEXCITE, SIMULIA, DELMIA, and IFWE are commercial trademarks or registered trademarks of Dassault Systèmes, a French "société européenne" (Versailles Commercial Register # B 322 306 440), or its subsidiaries in the United States and/or other countries.
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
Acquisitions and Foreign Exchange Impact
Condensed consolidated statements of income
Condensed consolidated balance sheet
Condensed consolidated cash flow statement
IFRS – non-IFRS reconciliation
Dassault Systèmes 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 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 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 U.S. dollars. Therefore, we are including 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.
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.
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:
Our product lines financial reporting include the following financial information:
Mainstream Innovation software revenue, comprised of our CENTRIC PLM and 3DVIA brands, as well as our 3DEXPERIENCE WORKS family which includes the SOLIDWORKS brand.
To measure the progressive penetration of 3DEXPERIENCE software, we utilize the following ratios:
Cloud revenues correspond to revenue generated through a catalog of online services delivered by Dassault Systèmes via a cloud infrastructure hosted by Dassault Systèmes, or by third party providers of cloud computing infrastructure services. This offering is available through different deployment methods: Public cloud, Private cloud, Dedicated cloud. All cloud applications can be offered through perpetual licenses and maintenance or subscriptions models.
(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' contract liabilities (deferred revenue), share-based compensation expense, including 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 acquisition, integration and restructuring expenses, and impairment of goodwill and acquired intangible assets, certain one-time items included in financial loss, net, certain one-time tax effects 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.
| Non-IFRS reported | ||||||||
|---|---|---|---|---|---|---|---|---|
| In millions of Euros, except per share data, | Three months ended | Six months ended | ||||||
| percentages, headcount and exchange rates | June 30, | June 30, | Change in | June 30, | June 30, | Change in | ||
| 2022 | 2021 | Change | constant currencies |
2022 | 2021 | Change | constant currencies |
|
| Total Revenue | € 1,384.0 | € 1,161.5 | 19% | 11% | € 2,708.6 | € 2,335.1 | 16% | 10% |
| Revenue breakdown by activity | ||||||||
| Software revenue | 1,250.2 | 1,051.3 | 19% | 11% | 2,455.8 | 2,119.7 | 16% | 9% |
| Of which licenses and other software revenue | 271.6 | 223.1 | 22% | 14% | 506.2 | 426.9 | 19% | 12% |
| Of which subscription and support revenue | 978.6 | 828.2 | 18% | 10% | 1,949.5 | 1,692.7 | 15% | 9% |
| Services revenue | 133.9 | 110.2 | 21% | 14% | 252.8 | 215.4 | 17% | 11% |
| Software revenue breakdown by product line | ||||||||
| Industrial Innovation | 662.2 | 571.0 | 16% | 11% | 1,316.6 | 1,180.2 | 12% | 8% |
| Life Sciences | 275.2 | 218.4 | 26% | 13% | 529.1 | 428.3 | 24% | 13% |
| Mainstream Innovation | 312.7 | 261.8 | 19% | 8% | 610.0 | 511.2 | 19% | 10% |
| Revenue breakdown by geography | ||||||||
| Americas | 556.7 | 449.4 | 24% | 9% | 1,088.0 | 912.7 | 19% | 8% |
| Europe | 490.7 | 420.8 | 17% | 13% | 962.3 | 856.6 | 12% | 9% |
| Asia | 336.6 | 291.3 | 16% | 12% | 658.2 | 565.8 | 16% | 14% |
| Operating income | € 442.4 | € 373.8 | 18% | € 906.4 | € 771.2 | 18% | ||
| Operating margin | 32.0% | 32.2% | 33.5% | 33.0% | ||||
| Net income attributable to shareholders | € 347.0 | € 287.4 | 21% | € 709.3 | € 588.6 | 21% | ||
| Diluted earnings per share (1) | € 0.26 | € 0.22 | 21% | 11% | € 0.54 | € 0.44 | 20% | 13% |
| Closing headcount | 23,383 | 21,587 | 8% | 23,383 | 21,587 | 8% | ||
| Average Rate USD per Euro | 1.06 | 1.21 | (12)% | 1.09 | 1.21 | (9)% | ||
| Average Rate JPY per Euro | 138.21 | 131.93 | 5% | 134.31 | 129.87 | 3% |
(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
(unaudited; in millions of Euros)
| Non-IFRS reported | o/w growth at | o/w change of | o/w FX impact on | |||
|---|---|---|---|---|---|---|
| In millions of Euros | June 30, | June 30, | constant rate and | scope impact at | previous year | |
| Change 2022 2021 |
scope | current year rate | figures | |||
| Revenue QTD | 1,384.0 | 1,161.5 | 222.6 | 137.1 | 0.5 | 84.9 |
| Revenue YTD | 2,708.6 | 2,335.1 | 373.5 | 237.9 | 0.5 | 135.2 |
(unaudited; in millions of Euros, except per share data and percentages)
| IFRS reported | ||||
|---|---|---|---|---|
| Three months ended | Six months ended | |||
| In millions of Euros, except per share data and percentages | June 30, | June 30, | June 30, | June 30, |
| 2022 | 2021 | 2022 | 2021 | |
| Licenses and other software revenue | 271.6 | 223.1 | 506.2 | 426.9 |
| Subscription and Support revenue | 978.5 | 827.6 | 1,949.4 | 1,691.6 |
| Software revenue | 1,250.1 | 1,050.7 | 2,455.6 | 2,118.5 |
| Services revenue | 133.9 | 110.1 | 252.8 | 215.2 |
| Total Revenue | € 1,383.9 | € 1,160.8 | € 2,708.5 | € 2,333.7 |
| Cost of software revenue (1) | (113.8) | (96.0) | (224.1) | (197.7) |
| Cost of services revenue | (115.9) | (99.5) | (216.3) | (193.4) |
| Research and development expenses | (273.8) | (229.4) | (518.3) | (466.4) |
| Marketing and sales expenses | (368.2) | (309.4) | (705.6) | (619.3) |
| General and administrative expenses | (103.4) | (96.3) | (199.5) | (189.8) |
| Amortization of acquired intangible assets and of tangible assets revaluation | (99.7) | (89.3) | (195.5) | (178.8) |
| Other operating income and expense, net | 2.1 | (7.2) | (2.7) | (24.1) |
| Total Operating Expenses | (1,072.7) | (927.2) | (2,062.1) | (1,869.5) |
| Operating Income | € 311.2 | € 233.6 | € 646.4 | € 464.2 |
| Financial loss, net | (4.8) | (5.1) | (9.7) | (8.0) |
| Income before income taxes | € 306.4 | € 228.4 | € 636.7 | € 456.2 |
| Income tax expense | (182.8) | (46.0) | (249.1) | (99.7) |
| Net Income | € 123.6 | € 182.5 | € 387.6 | € 356.5 |
| Non-controlling interest | 0.4 | 0.2 | 0.7 | 0.5 |
| Net Income attributable to equity holders of the parent | € 124.0 | € 182.7 | € 388.3 | € 357.1 |
| Basic earnings per share (2) | 0.09 | 0.14 | 0.30 | 0.27 |
| Diluted earnings per share (2) | € 0.09 | € 0.14 | € 0.29 | € 0.27 |
| Basic weighted average shares outstanding (in millions) | 1,311.5 | 1,310.3 | 1,311.0 | 1,308.6 |
| Diluted weighted average shares outstanding (in millions) | 1,322.7 | 1,323.9 | 1,324.3 | 1,323.6 |
(1) Excluding amortization of acquired intangible assets and of tangible assets revaluation
(2) 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
| Three months ended June 30, 2022 | Six months ended June 30, 2022 | ||||
|---|---|---|---|---|---|
| IFRS reported | Change (3) | Change in constant currencies |
Change (3) | Change in constant currencies |
|
| Revenue | 19% | 11% | 16% | 10% | |
| Revenue by activity | |||||
| Software revenue | 19% | 11% | 16% | 10% | |
| Services revenue | 22% | 14% | 18% | 12% | |
| Software Revenue by product line | |||||
| Industrial Innovation | 16% | 11% | 12% | 8% | |
| Life Sciences | 26% | 14% | 24% | 14% | |
| Mainstream Innovation | 19% | 8% | 19% | 10% | |
| Revenue by geography | |||||
| Americas | 24% | 9% | 19% | 8% | |
| Europe | 17% | 13% | 12% | 9% | |
| Asia | 16% | 12% | 16% | 14% |
(3) Variation compared to the same period in the prior year
(unaudited; in millions of Euros)
| IFRS reported | ||
|---|---|---|
| In millions of Euros | June 30, | December 31, |
| 2022 | 2021 | |
| ASSETS | ||
| Cash and cash equivalents | 3,157.0 | 2,979.5 |
| Trade accounts receivable, net | 1,233.5 | 1,366.3 |
| Contract assets | 16.6 | 12.7 |
| Other current assets | 406.6 | 360.5 |
| Total current assets | 4,813.8 | 4,719.0 |
| Property and equipment, net | 813.7 | 817.0 |
| Goodwill and Intangible assets, net | 8,636.6 | 8,175.0 |
| Other non-current assets | 295.8 | 507.7 |
| Total non-current assets | 9,746.2 | 9,499.7 |
| Total Assets | € 14,559.9 | € 14,218.7 |
| LIABILITIES AND EQUITY | ||
| Trade accounts payable | 183.5 | 192.4 |
| Contract liabilities | 1,546.8 | 1,304.4 |
| Borrowings, current | 905.5 | 903.3 |
| Other current liabilities | 697.8 | 1,070.3 |
| Total current liabilities | 3,333.6 | 3,470.3 |
| Borrowings, non-current | 2,736.9 | 2,966.4 |
| Other non-current liabilities | 1,479.0 | 1,571.0 |
| Total non-current liabilities | 4,215.9 | 4,537.4 |
| Non-controlling interests | 14.6 | 13.7 |
| Parent shareholders' equity | 6,995.9 | 6,197.3 |
| Total Liabilities and equity | € 14,559.9 | € 14,218.7 |
| IFRS reported | ||||||
|---|---|---|---|---|---|---|
| In millions of Euros | Three months ended | Six months ended | ||||
| June 30, | June 30, | Change | June 30, | June 30, | Change | |
| 2022 | 2021 | 2022 | 2021 | |||
| Net income attributable to equity holders of the parent | 124.0 | 182.7 | (58.7) | 388.3 | 357.1 | 31.2 |
| Non-controlling interest | (0.4) | (0.2) | (0.2) | (0.7) | (0.5) | (0.2) |
| Net income | 123.6 | 182.5 | (58.9) | 387.6 | 356.5 | 31.1 |
| Depreciation of property and equipment | 47.3 | 43.6 | 3.7 | 93.2 | 86.9 | 6.3 |
| Amortization of intangible assets | 102.5 | 92.0 | 10.5 | 201.6 | 186.6 | 15.0 |
| Adjustments for other non-cash items | 165.5 | 13.3 | 152.2 | 196.7 | 79.2 | 117.5 |
| Changes in working capital | (21.6) | 60.1 | (81.7) | 168.7 | 323.9 | (155.2) |
| Net Cash Provided by (Used in) Operating Activities | € 417.3 | € 391.4 | € 25.9 | € 1,047.8 | € 1,033.2 | € 14.6 |
| Additions to property, equipment and intangibles | (31.9) | (29.3) | (2.6) | (62.7) | (56.8) | (5.9) |
| Payment for acquisition of businesses, net of cash acquired | (3.8) | - | (3.8) | (7.3) | - | (7.3) |
| Other | (2.5) | (0.6) | (1.9) | (29.3) | (9.2) | (20.1) |
| Net Cash Provided by (Used in) Investing Activities | € (38.3) | € (29.9) | € (8.4) | € (99.4) | € (66.0) | € (33.4) |
| Proceeds from exercise of stock options | 7.4 | 37.8 | (30.4) | 25.8 | 74.9 | (49.1) |
| Cash dividends paid | (223.5) | (147.1) | (76.4) | (223.5) | (147.1) | (76.4) |
| Repurchase and sale of treasury stock | (75.5) | (6.1) | (69.4) | (602.4) | (94.4) | (508.0) |
| Capital increase | - | - | - | 198.6 | - | 198.6 |
| Acquisition of non-controlling interests | - | - | - | (0.5) | - | (0.5) |
| Proceeds from borrowings | 0.7 | (0.4) | 1.1 | 3.6 | - | 3.6 |
| Repayment of borrowings | (3.1) | (3.0) | (0.1) | (238.4) | (11.3) | (227.1) |
| Repayment of lease liabilities | (26.7) | (24.9) | (1.8) | (49.8) | (49.2) | (0.6) |
| Net Cash Provided by (Used in) Financing Activities | € (320.8) | € (143.6) | € (177.2) | € (886.6) | € (227.1) | € (659.5) |
| Effect of exchange rate changes on cash and cash equivalents | 90.6 | (13.0) | 103.6 | 115.7 | 29.9 | 85.8 |
| Increase (decrease) in cash and cash equivalents | € 148.9 | € 204.9 | € (56.0) | € 177.5 | € 770.1 | € (592.6) |
| Cash and cash equivalents at beginning of period | € 3,008.1 | € 2,714.1 | € 2,979.5 | € 2,148.9 | ||
| Cash and cash equivalents at end of period | € 3,157.0 | € 2,919.0 | € 3,157.0 | € 2,919.0 |
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 December 31, 2021 filed with the AMF on March 17, 2022. To compensate for these limitations, the supplemental non-IFRS financial information should be read not in isolation, but only in conjunction with the Group's consolidated financial statements prepared in accordance with IFRS.
| Three months ended June 30, | Change | |||||||
|---|---|---|---|---|---|---|---|---|
| In millions of Euros, except per share data and percentages |
2022 | Adjustment(1) | 2022 | 2021 | Adjustment(1) | 2021 | IFRS | Non |
| IFRS | Non-IFRS | IFRS | Non-IFRS | IFRS(2) | ||||
| Total Revenue | € 1,383.9 | € 0.1 | € 1,384.0 | € 1,160.8 | € 0.7 | € 1,161.5 | 19% | 19% |
| Revenue breakdown by activity | ||||||||
| Software revenue | 1,250.1 | 0.1 | 1,250.2 | 1,050.7 | 0.6 | 1,051.3 | 19% | 19% |
| Licenses and other software revenue | 271.6 | - | 271.6 | 223.1 | - | 223.1 | 22% | 22% |
| Subscription and Support revenue | 978.5 | 0.1 | 978.6 | 827.6 | 0.6 | 828.2 | 18% | 18% |
| Recurring portion of Software revenue | 78% | 78% | 79% | 79% | ||||
| Services revenue | 133.9 | - | 133.9 | 110.1 | 0.1 | 110.2 | 22% | 21% |
| Software Revenue breakdown by product line | ||||||||
| Industrial Innovation | 662.2 | - | 662.2 | 571.0 | - | 571.0 | 16% | 16% |
| Life Sciences | 275.2 | - | 275.2 | 217.9 | 0.5 | 218.4 | 26% | 26% |
| Mainstream Innovation | 312.7 | - | 312.7 | 261.7 | 0.1 | 261.8 | 19% | 19% |
| Revenue breakdown by geography | ||||||||
| Americas | 556.7 | - | 556.7 | 448.8 | 0.6 | 449.4 | 24% | 24% |
| Europe | 490.6 | 0.0 | 490.7 | 420.7 | 0.1 | 420.8 | 17% | 17% |
| Asia | 336.6 | - | 336.6 | 291.3 | - | 291.3 | 16% | 16% |
| Total Operating Expenses | € (1,072.7) | € 131.1 | € (941.7) | € (927.2) | € 139.5 | € (787.6) | 16% | 20% |
| Share-based compensation expense and related social charges |
(32.7) | 32.7 | - | (42.3) | 42.3 | - | ||
| Amortization of acquired intangible assets and of tangible assets revaluation |
(99.7) | 99.7 | - | (89.3) | 89.3 | - | ||
| Lease incentives of acquired companies | (0.7) | 0.7 | - | (0.7) | 0.7 | - | ||
| Other operating income and expense, net | 2.1 | (2.1) | - | (7.2) | 7.2 | - | ||
| Operating Income | € 311.2 | € 131.1 | € 442.4 | € 233.6 | € 140.2 | € 373.8 | 33% | 18% |
| Operating Margin | 22.5% | 32.0% | 20.1% | 32.2% | ||||
| Financial loss, net | (4.8) | 0.4 | (4.5) | (5.1) | 0.4 | (4.7) | (6)% | (5)% |
| Income tax expense | (182.8) | 91.7 | (91.1) | (46.0) | (34.6) | (80.6) | 298% | 13% |
| Non-controlling interest | 0.4 | (0.3) | 0.2 | 0.2 | (1.3) | (1.1) | 109% | (114)% |
| Net Income attributable to shareholders | € 124.0 | € 223.0 | € 347.0 | € 182.7 | € 104.7 | € 287.4 | (32)% | 21% |
| Diluted Earnings Per Share (3) | € 0.09 | € 0.17 | € 0.26 | € 0.14 | € 0.08 | € 0.22 | (32)% | 21% |
(1) In the reconciliation schedule above, (i) all adjustments to IFRS revenue data reflect the exclusion of the effect of adjusting the carrying value of acquired companies' contract liabilities (deferred revenue); (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, including related social charges, lease incentives of acquired companies, as detailed below, and other operating income and expense, net including acquisition, integration and restructuring expenses, and impairment of goodwill and acquired intangible assets; (iii) adjustments to IFRS financial loss, net reflect the exclusion of certain one-time items included in financial loss, net, and; (iv) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted earnings per share, certain one-time tax effects and the income tax effect of the non-IFRS adjustments.
| Three months ended June 30, | Change | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| In millions of Euros, except percentages | 2022 IFRS |
Share-based compensatio n expense and related social charges |
Lease incentives of acquired companies |
2022 Non IFRS |
2021 IFRS |
Share-based compensatio n expense and related social charges |
Lease incentives of acquired companies |
2021 Non IFRS |
IFRS | Non IFRS |
| Cost of revenue | (229.6) | 2.0 | 0.2 | (227.4) | (195.5) | 2.8 | 0.2 | (192.5) | 17% | 18% |
| Research and development expenses | (273.8) | 11.8 | 0.3 | (261.8) | (229.4) | 12.0 | 0.3 | (217.1) | 19% | 21% |
| Marketing and sales expenses | (368.2) | 9.9 | 0.1 | (358.2) | (309.4) | 12.3 | 0.1 | (297.1) | 19% | 21% |
| General and administrative expenses | (103.4) | 9.0 | 0.1 | (94.3) | (96.3) | 15.3 | 0.1 | (80.9) | 7% | 17% |
| Total | € 32.7 | € 0.7 | € 42.3 | € 0.7 |
(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 1,322.7 million diluted shares for Q2 2022 and 1,323.9 million diluted shares for Q2 2021. 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
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 December 31, 2021 filed with the AMF on March 17, 2022. To compensate for these limitations, the supplemental non-IFRS financial information should be read not in isolation, but only in conjunction with the Group's consolidated financial statements prepared in accordance with IFRS.
| Six months ended June 30, | Change | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| In millions of Euros, except per share data and percentages |
2022 | Adjustment(1) | 2022 | 2021 | Adjustment(1) | 2021 | IFRS | Non | |
| IFRS | Non-IFRS | IFRS | Non-IFRS | IFRS(2) | |||||
| Total Revenue | € 2,708.5 | € 0.1 | € 2,708.6 | € 2,333.7 | € 1.4 | € 2,335.1 | 16% | 16% | |
| Revenue breakdown by activity | |||||||||
| Software revenue | 2,455.6 | 0.1 | 2,455.8 | 2,118.5 | 1.2 | 2,119.7 | 16% | 16% | |
| Licenses and other software revenue | 506.2 | - | 506.2 | 426.9 | - | 426.9 | 19% | 19% | |
| Subscription and Support revenue | 1,949.4 | 0.1 | 1,949.5 | 1,691.6 | 1.2 | 1,692.7 | 15% | 15% | |
| Recurring portion of Software revenue | 79% | 79% | 80% | 80% | |||||
| Services revenue | 252.8 | - | 252.8 | 215.2 | 0.2 | 215.4 | 18% | 17% | |
| Software Revenue breakdown by product line |
|||||||||
| Industrial Innovation | 1,316.6 | - | 1,316.6 | 1,180.2 | - | 1,180.2 | 12% | 12% | |
| Life Sciences | 529.1 | - | 529.1 | 427.3 | 1.0 | 428.3 | 24% | 24% | |
| Mainstream Innovation | 609.8 | 0.1 | 610.0 | 511.0 | 0.2 | 511.2 | 19% | 19% | |
| Revenue breakdown by geography | |||||||||
| Americas | 1,087.9 | 0.1 | 1,088.0 | 911.4 | 1.3 | 912.7 | 19% | 19% | |
| Europe | 962.3 | - | 962.3 | 856.5 | 0.1 | 856.6 | 12% | 12% | |
| Asia | 658.2 | - | 658.2 | 565.7 | - | 565.8 | 16% | 16% | |
| Total Operating Expenses | € (2,062.1) | € 259.9 | € (1,802.2) | € (1,869.5) | € 305.7 | € (1,563.8) | 10% | 15% | |
| Share-based compensation expense and related social charges |
(60.2) | 60.2 | - | (101.4) | 101.4 | - | |||
| Amortization of acquired intangible assets and of tangible assets revaluation |
(195.5) | 195.5 | - | (178.8) | 178.8 | - | |||
| Lease incentives of acquired companies | (1.5) | 1.5 | - | (1.4) | 1.4 | - | |||
| Other operating income and expense, net | (2.7) | 2.7 | - | (24.1) | 24.1 | - | |||
| Operating Income | € 646.4 | € 260.0 | € 906.4 | € 464.2 | € 307.1 | € 771.2 | 39% | 18% | |
| Operating Margin | 23.9% | 33.5% | 19.9% | 33.0% | |||||
| Financial loss, net | (9.7) | 0.7 | (9.0) | (8.0) | 0.8 | (7.2) | 22% | 25% | |
| Income tax expense | (249.1) | 60.8 | (188.3) | (99.7) | (73.6) | (173.3) | 150% | 9% | |
| Non-controlling interest | 0.7 | (0.6) | 0.2 | 0.5 | (2.7) | (2.2) | 34% | (107)% | |
| Net Income attributable to shareholders | € 388.3 | € 321.0 | € 709.3 | € 357.1 | € 231.5 | € 588.6 | 9% | 21% | |
| Diluted Earnings Per Share (3) | € 0.29 | € 0.24 | € 0.54 | € 0.27 | € 0.17 | € 0.44 | 9% | 20% |
(1) In the reconciliation schedule above, (i) all adjustments to IFRS revenue data reflect the exclusion of the effect of adjusting the carrying value of acquired companies' contract liabilities (deferred revenue); (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, including related social charges, lease incentives of acquired companies, as detailed below, and other operating income and expense, net including acquisition, integration and restructuring expenses, and impairment of goodwill and acquired intangible assets; (iii) adjustments to IFRS financial loss, net reflect the exclusion of certain one-time items included in financial loss, net, and; (iv) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted earnings per share, certain one-time tax effects and the income tax effect of the non-IFRS adjustments.
| Six months ended June 30, | Change | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| In millions of Euros, except percentages | 2022 IFRS |
Share-based compensatio n expense and related social charges |
Lease incentives of acquired companies |
2022 Non IFRS |
2021 IFRS |
Share-based compensatio n expense and related social charges |
Lease incentives of acquired companies |
2021 Non IFRS |
IFRS | Non IFRS |
| Cost of revenue | (440.4) | 3.3 | 0.5 | (436.6) | (391.1) | 6.9 | 0.4 | (383.8) | 13% | 14% |
| Research and development expenses | (518.3) | 20.9 | 0.6 | (496.8) | (466.4) | 34.1 | 0.6 | (431.7) | 11% | 15% |
| Marketing and sales expenses | (705.6) | 18.0 | 0.2 | (687.3) | (619.3) | 27.9 | 0.2 | (591.2) | 14% | 16% |
| General and administrative expenses | (199.5) | 17.9 | 0.2 | (181.4) | (189.8) | 32.5 | 0.1 | (157.2) | 5% | 15% |
| Total | € 60.2 | € 1.5 | € 101.4 | € 1.4 |
(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 1,324.3 million diluted shares for YTD 2022 and 1,323.6 million diluted shares for YTD 2021. 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.
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