Transcription
Analysts MeetingQ3 2016Bernard Charlès, Vice-Chairman of the Boardof Directors & CEOThibault de Tersant, Senior EVP, CFO
Forward Looking InformationStatements herein that are not historical facts but express expectations or objectives for the future, including but not limited to statementsregarding the Company’s non-IFRS financial performance objectives, are forward-looking statements.Such forward-looking statements are based on Dassault Systèmes management's current views and assumptions and involve knownand unknown risks and uncertainties. Actual results or performances may differ materially from those in such statements due to a rangeof factors. The Company’s current outlook for 2016 takes into consideration, among other things, an uncertain global economicenvironment. In light of the continuing uncertainties regarding economic, business, social and geopolitical conditions at the global level,the Company’s revenue, net earnings and cash flows may grow more slowly, whether on an annual or quarterly basis. While theCompany makes every effort to take into consideration this uncertain macroeconomic outlook, the Company’s business results, however,may not develop as anticipated. Furthermore, due to factors affecting sales of the Company’s products and services as described aboveand in the Risk Factors section of the Company’s most recent Document de Référence, there may be a substantial time lag between animprovement in global economic and business conditions and an upswing in the Company’s business results.In preparing such forward-looking statements, the Company has in particular assumed an average US dollar to euro exchange rate ofUS 1.15 per 1.00 for the 2016 fourth quarter and US 1.12 per 1.00 for the full year as well as an average Japanese yen to euroexchange rate of JPY120.0 to 1.00 for the fourth quarter and JPY120.8 to 1.00 for the full year before hedging; however, currencyvalues fluctuate, and the Company’s results of operations may be significantly affected by changes in exchange rates.The Company’s actual results or performance may also be materially negatively affected by numerous risks and uncertainties, asdescribed in the “Risk Factors” section of the 2015 Document de Référence, filed with the AMF on March 23, 2016, and also available onthe Company’s website www.3ds.com.2
Non-IFRS InformationReaders are cautioned that the supplemental non-IFRS information presented in this press release is subject to inherent limitations. It isnot based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRSmeasurements. Also, the Company’s supplemental non-IFRS financial information may not be comparable to similarly titled non-IFRSmeasures used by other companies. Further specific limitations for individual non-IFRS measures, and the reasons for presenting nonIFRS financial information, are set forth in the Company’s annual report for the year ended December 31, 2015 included in theCompany’s 2015 Document de Référence filed with the AMF on March 23, 2016.In the tables accompanying this press release the Company sets forth its supplemental non-IFRS figures for revenue, operating income,operating margin, net income and diluted earnings per share, which exclude the effect of adjusting the carrying value of acquiredcompanies’ deferred revenue, share-based compensation expense and related social charges, the amortization of acquired intangibleassets, other operating income and expense, net, certain one-time items included in financial revenue and other, net, and the income taxeffect of the non-IFRS adjustments and certain one-time tax effects. The tables also set forth the most comparable IFRS financialmeasure and reconciliations of this information with non-IFRS information.When the Company believes it would be helpful for understanding trends in its business, the Company provides percentage increases ordecreases in its revenue (in both IFRS as well as non-IFRS) to eliminate the effect of changes in currency values, particularly theU.S. dollar and the Japanese yen, relative to the euro. When trend information is expressed herein "in constant currencies", the results ofthe "prior" period have first been recalculated using the average exchange rates of the comparable period in the current year, and thencompared with the results of the comparable period in the current year.3
Q3 2016 Highlights Delivering good Q3 total revenue, operating margin and EPS 3DEXPERIENCEdelivering strong growth ENOVIA showinggood momentum SOLIDWORKS performing Broadeningwellreach in T&M, High-tech, CG-Retail, CPG-Retail and AEC Closing CST acquisition and expanding in Electromagnetic Simulation Updating FY16 guidance for Q3 positive currency impact and CST acquisition,narrowing revenue range4
Agenda51Q3 16 Business Review2Q3 16 Financial Highlights3Q4 & FY16 Financial Objectives4Financial Information Appendix
Q3 16 Non-IFRS 6Top line growth and operating marginexpansion resulting in good EPS growth millionsQ3 16YTD 16Revenue735.52,183.0Growth 7% 5%Growth exFX 7% 6%Software Growth exFX 7% 6%Operating Margin32.0%29.6%Operating Margin Growth 0.8 pt 0.8 ptEPS ( )0.631.71EPS Evolution 9% 11%
Software Revenue by Region Non-IFRSQ3 16: 7Growth in North America offset in part byweaker results in Latin AmericaGood performance in France andSouthern EuropeStrong performance in Asia led by Chinaand KoreaSoftware Revenue Growth exFX by RegionQ3 16YTD 16Americas 3% 6%Europe 4% 6% 17% 8% 7% 6%AsiaSoftware Revenue
Software Revenue by Brands Non-IFRSQ3 16: CATIA: good traction in Asia ENOVIA: new licenses up 27% exFX (15% inQ3 15)SOLIDWORKS: performance driven by newlicenses and recurringOther Software: strong base of comparison(software revenue up 18% exFX in Q3 15) 8Software Revenue Growth exFX by BrandsQ3 16YTD 16CATIA 7% 4%ENOVIA 9% 11%SOLIDWORKS 14% 11%Other Software 2% 3%Software Revenue 7% 6%
Q3 16 Business Review SOLIDWORKS 3DEXPERIENCE 3DEXPERIENCity Industries9
Q3 SOLIDWORKS Performance SOLIDWORKS new licenses up 13% exFX in Q3 (double-digit growth across geos) Continuously investing in R&D with a new release every year Sustaining strong community involvement 725k commercial users 10M students have learned SOLIDWORKS in the past 22 years 350 resellers 650 software partners10
Launching SOLIDWORKS 2017 INNOVATE – New capabilities to synchronizeThe power you need to drive innovationelectronic and mechanical design DESIGN – More core power and performance toaccelerate design process VALIDATE – Greater design ideas with simulation COLLABORATE – Unlock any 3D model to workwith SOLIDWORKS BUILD & MANAGE – Data integration fromconcept to manufacturing11Connecting SOLIDWORKS users with3DEXPERIENCE Platform
Q3 16 Business Review SOLIDWORKS 3DEXPERIENCE 3DEXPERIENCity Industries12
3DEXPERIENCE YTD Performance% V6 / New Licenses Revenue* Non-IFRS 13 points in YTD 1633%20%YTD 2015YTD 2016* Excluding SOLIDWORKS and acquisitions133DEXPERIENCE new licensesrevenue up 76% exFX
3DEXPERIENCE Platform: 10,000 Users at RenaultRENAULTGlobal manufacturer of three million vehicles annuallyBusiness Values:Solution:“Our ’NewPDM’ program is key for engineering digitalacceleration of Groupe Renault. This huge businesstransformation, driven with Dassault Systèmes’support, represents a clear performance breakthroughfor the development of the future range of our threebrands, Renault, Dacia and Renault Samsung Motors.”3DEXPERIENCE Platformwith Target Zero DefectIndustry Solution Experience(including ENOVIA, CATIA,SIMULIA, DELMIA) to lowerrisks and costs associatedwith new productsintroductionGaspar Gascon Abellan, Executive Vice President Engineering,Groupe Renault14
Q3 16 Business Review SOLIDWORKS 3DEXPERIENCE 3DEXPERIENCity Industries15
Attending World Cities Summit July 2016, Singapore 92 mayors and city leaders from 64 countries attending 2016 World CitiesSummit taking place in SingaporeShowcasing the 3DEXPERIENCE platform and revealing the valueof IOT for Smart Cities16
Cybernaut Adopts 3DEXPERIENCE Platform“We wish to enhancethe public’sawareness of thevalue and advantagesof 3D technology andbig data to push thetechnology andservice innovation ofChina for Made inChina 2025.”Zhu Min, President of Cybernaut17CybernautLeading group in China pioneering in smart city-related projects and in supportingSMBs from emerging industry in ChinaBusiness Values:Creating Industry Parks in several cities anddeploying the 3DEXPERIENCE platform in order to:Solution:-3DEXPERIENCE PlatformSupport the faster development of Small and including 3DEXPERIENCityMid-size Business-Develop education and cultivate 3D talents-Contribute to building a number of smartcities
Q3 16 Business Review SOLIDWORKS 3DEXPERIENCE 3DEXPERIENCity Industries18
Industries PerformanceQ3 16 – Software Revenue Q316 software revenue driven by: Transportation& Mobility High-Tech ConsumerPackaged Goods & Retail Consumer Goods & Retail Architecture, Engineering & Construction** Architecture, Engineering & Construction; Consumer Goods & Retail; Consumer Packaged Goods & Retail; Energy, Process & Utilities; Finance BusinessServices; High-Tech; Life Sciences; Marine & Offshore; Natural Resources19
150M ofconnected carsin 202050B of connecteddevices by 2020THE HYPER CONNECTED WORLD10B connectionsbetween industrial machines20
Q3 High-Tech Performance High-Tech new licenses revenue up 36% exFX in Q3, 30% in YTD Semiconductor Companies selecting Silicon Thinking toaccelerate time-to-market in developing IOT-readysystems-on-chip Good traction from Electronics Products Manufacturerswith Smarter, Faster, Lighter to orchestrate engineeringteams for mechatronics21YTD Q3Wins & ExtensionsWith Silicon Thinking
Closing CST Acquisition Acquisition completed on September 30, 2016 Paid 220m in cashCST enabling electromagnetic simulation tobe integrated in Industry Solution Experiences formulti-physics and multi-scale simulation Eliminating electromagnetic interference Ensuring connectivity under all22operating conditionsElectromagnetism is fundamental toharmonize Product, Nature and Life
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Agenda241Q3 16 Business Review2Q3 16 Financial Highlights3Q4 & FY16 Financial Objectives4Financial Information Appendix
Software Revenue Growth Non-IFRSNew Licenses RevenueRecurring and Other Software Revenue 3.1% 3% ex FX 6.4% 8% ex FX 8.1% 6% ex FX 7.1% 8% ex FXSoftware revenue up 7% exFX in Q3 16 driven by good recurring revenue benefiting from recoveries25
Service Revenue & Margin Evolution Non-IFRSService Revenue 2.9% 3% ex FX 6.2% 6% ex FXServ. Gross Margin2611.6%9.2%13.5%15.8%
Operating Income Evolution Non-IFRSOperating incomeQ3 Operating Margin: YoY Comparison 8.1% 0.8pt 10.1% 0.8ptOp. margin28.8%29.6%31.2% 300 net hirings* in Q3 16* excluding acquisitions2732.0%
EPS Non-IFRSDiluted EPSQ3 EPS: YoY Comparisonin EUR 11%1.801.601.401.711.541.201.00 9%0.800.600.400.580.633Q153Q160.20-YTD 15YTD 16Excluding one-off impacts, Q3 16 EPS up 17%28
Change in Net Financial Position (YTD) 191 166-140-32 309 16-245-102-53-41,4571,351Net FinancialPosition Q4 201529Operating cash flow: 526mcompared to 530m in YTD Q3 2015Net IncomeNon cash P&LitemsChange inChange in NonOperating operating workingworking capitalcapitalCapitalexpenditureAcquisitions and DS stock option Cash dividendother investingexercisepaidnetShareRepurchaseFX ImpactNet FinancialPosition Q3 2016
Operating Cash Flow Evolution IFRS million30Q3 16Q3 15ChangesOperating Cash Flow 77 113-36Net income adjusted for non cash items 187 159 28Decrease in trade accounts receivable 91 38 53Trade accounts receivable up 5% exFX* compared to Q3 15(Decrease) in unearned revenue-137-101-36Unearned revenue up 7% exFX** compared to Q3 15Increase in accrued compensation 1 21-20Timing impact on payments of salariesIncrease (Decrease) in accounts payable 5-18 23(Decrease) Increase in income taxes payable-43 37-80Other-27-23-4* excluding impact of changes in scope** excluding impact of purchase accounting on acquisitionsHigher downpayments in Q3 16 and timing impact of tax refunds
Agenda311Q3 16 Business Review2Q3 16 Financial Highlights3Q4 & FY16 Financial Objectives4Financial Information Appendix
Objectives Changes: July to October Non-IFRS Adding CST acquisition Taking into account Q3 positive currency impact Updating GBP for Q4 (from 0.90 per 1.00 in July 0.95 in October) Keeping US and JPY unchanged for Q4 (US 1.15 per 1.00, JPY 120.0 per 1.00) Narrowing FY revenue range from 25 to 15 million New revenue range at 3.015 to 3.030 billion Lowend unchanged from activity stand-point Mid point 32lowered by 5 million from activity stand-pointEPS upgraded from 2.40 to 2.40-2.45
Objectives Changes: July to October Non-IFRSRevenue variationexFX Growth:33 6-7% 6-7%
Proposed objectives Non-IFRSQ4 2016832-847FY 20163,015-3,030Growth 4-6% 5%Growth exFX 7-9% 6-7%Software Growth exFX 7-9% 7%Operating Margin33-35% 31.0%Operating Margin Growth-3 to -1ptStableEPS ( )0.69-0.742.40-2.45EPS Growth-3 to 4% 7-9% Software revenue up 7% exFX / rates1.151.12 Tax rate below last year by 2.5 points / rates120.0120.8 EPS up 9-11% exFXRevenue (M )34Q4 2016: Software revenue up 7-9% exFX New licenses revenue up 8-12% exFX Recurring revenue up 7-8% exFX Operating margin down 0.5 point exFX atmid-point, reflecting recruitments in Salesand R&D and by marketing programs EPS reflecting heavy currency headwinds( 6 points)FY 2016:
Agenda351Q3 16 Business Review2Q3 16 Financial Highlights3Q4 & FY16 Financial Objectives4Financial Information Appendix
Software Revenue by RegionIFRSin MEUR3Q163Q15GrowthAmericasEuropeAsiaSoftware revenue194.8263.0189.0646.8184.1256.1153.3593.5 5.8% 2.7% 23.3% 9.0%3Q1629%Growthex FX 6% 5% 18% 9%3Q1530%26%YTD 16YTD 15Growth582.2803.5542.71 928.4539.6770.4489.51 799.5 7.9% 4.3% 10.9% 7.2%YTD 1631%28%Growthex FX 8% 7% 9% 8%YTD 1530%27%30%AmericasEuropeAsia3641%43%42%43%
Software Revenue by RegionNon-IFRSin MEUR3Q163Q15GrowthAmericasEuropeAsiaSoftware revenue194.8263.3189.0647.1189.3258.9154.6602.8 2.9% 1.7% 22.3% 7.3%3Q16Americas29%Growthex FX 3% 4% 17% 7%3Q1530%26%YTD 16YTD 15Growth583.2804.2543.01 930.4555.3780.1493.81 829.2 5.0% 3.1% 10.0% 5.5%YTD 1631%28%Growthex FX 6% 6% 8% 6%YTD 1530%27%30%EuropeAsia41%3743%42%43%
Revenue by Product LineIFRSin MEUR3Q163Q15GrowthCATIA SWENOVIA SWSOLIDWORKS SWOther SWServicesTotal 66.382.2675.7 7.1% 10.2% 12.3% 8.3% 7.5% 8.8%3Q16SOLIDWORKS SW24%Services38703.0229.6455.9539.9252.22 180.6676.4206.7418.5497.9243.52 043.0 3.9% 11.1% 8.9% 8.4% 3.6% 6.7%12%31%25%34%24%11%10%20%Growthex FX 4% 11% 11% 9% 4% 7%YTD 1512%33%10%21%GrowthYTD 1625%Other SWYTD 1512%33%ENOVIA SWYTD 163Q1512%CATIA SWGrowthex FX 7% 9% 14% 8% 7% 9%21%10%20%
Revenue by Product LineNon-IFRSin MEUR3Q163Q15GrowthCATIA SWENOVIA SWSOLIDWORKS SWOther SWServicesTotal 75.683.2686.0 7.1% 10.2% 12.3% 2.7% 6.2% 7.2%3Q16ENOVIA SWYTD 16YTD 15Growth703.0229.6455.9541.9252.62 183.0676.4206.7418.5527.6245.42 074.6 3.9% 11.1% 8.9% 2.7% 2.9% 5.2%3Q1512%CATIA SWGrowthex FX 7% 9% 14% 2% 6% 7%YTD 1612%32%25%YTD 1512%32%26%Growthex FX 4% 11% 11% 3% 3% 6%12%31%25%33%25%SOLIDWORKS SW10%Other SWServices3921%10%20%11%21%10%20%
Software Revenue EvolutionNon-IFRS2 5002 0001 50028%27%Recurring1 000500Non-recurring72%73%25%25%75%75%3Q153Q16-YTD 15 YTD 1640
IFRS P&L(In millions of , except per share data)Software revenueNew licensesOther software revenuePeriodic licenses and MaintenanceService and other revenueTotal revenue20162015YoYNine months months ended September 30,20162015YoY646.8593.5 9.0%1,928.41,799.5161.5145.8 10.8%510.4479.7 7.2% 6.4%3.12.9 6.9%8.316.2-48.8%482.2444.8 8.4%1,409.71,303.6 8.1%88.4735.282.2675.7 7.5% 8.8%252.22,180.6243.52,043.0 3.6% 6.7%Cost of Software revenue(36.9)(33.4) 10.5%(112.1)(105.4) 6.4%Cost of Service and other revenue(74.6)(72.3) 3.2%(230.4)(217.2) 6.1%Research and development(131.8)(114.9) 14.7%(401.0)(366.5) 9.4%Marketing and sales(224.1)(211.3) 6.1%(684.1)(657.1) 4.1%General and administrative(56.3)(51.6) 9.1%(166.7)(152.5) 9.3%Amortization of acquired her operating income and expense, net(12.8)(0.6)N/A(26.3)(6.8)N/ATotal operating expenses(574.3)(526.9) 9.0%(1,735.8)(1,625.9) 6.8%Operating incomeFinancial revenue and other, netIncome tax expenseNon-controlling interestNet Income (to equity holders of the 0.6)105.5 8.1%-20.0% 8.2%N/S 9)275.7 6.6%N/A-16.0% 48.3% 10.4%0.440.41 7.3%1.181.08 9.3%257.7256.5257.4256.4Diluted net income per share (EPS)Average diluted shares (Million)41Three months ended September 30,
IFRS P&L (%)Three months ended September 30,2016Nine months months ended September 30,20152016% of revenue% of revenueSoftware revenue88.0%87.8%88.4%88.1%New licenses22.0%21.6%23.4%23.5%Other software revenue0.4%0.4%0.4%0.8%Periodic licenses and .0%11.6%100.0%11.9%100.0%Service and other revenueTotal revenue422015Cost of Software revenue5.0%4.9%5.1%5.2%Cost of Service and other revenue10.1%10.7%10.6%10.6%Research and development17.9%17.0%18.4%17.9%Marketing and sales30.5%31.3%31.4%32.2%General and administrative7.7%7.6%7.6%7.5%Amortization of acquired intangibles5.1%6.3%5.3%5.9%Other operating income and expense, net1.7%0.1%1.2%0.3%Total operating expenses78.1%78.0%79.6%79.6%Operating incomeFinancial revenue and other, netIncome tax rate (% of IBIT)Non-controlling interestNet Income (to equity holders of the %13.5%
Non-IFRS P&L(In millions of , except per share data)Software revenueNew licensesOther software revenuePeriodic licenses and MaintenanceService and other revenueTotal revenueCost of Software revenueCost of Service and other revenueResearch and developmentMarketing and salesNine months months ended September 30,20162015YoY647.1602.8 7.3%1,930.41,829.2 5.5%161.53.1482.5149.42.9450.5 8.1% 6.9% 7.1%511.08.31,411.1495.816.21,317.2 3.1%-48.8% 7.1%88.4735.583.2686.0 6.2% 7.2%252.62,183.0245.42,074.6 2.9% 207.5) 9.9% 3.3% 10.4% .5)(649.0) 5.7% 5.8% 5.5% 2.5%(50.7)(49.3) 2.8%(154.2)(148.3) 4.0%Total operating expenses(500.2)(472.3) 5.9%(1,536.8)(1,476.8) 4.1%Operating incomeFinancial revenue and other, netIncome tax expenseNon-controlling interestNet Income (to equity holders of the 0.6)148.5 10.1% 20.0% 11.0%N/S )395.5 8.1%N/A-2.7% 48.3% 11.0%0.630.58 8.6%1.711.54 11.0%257.7256.5257.4256.4General and administrativeDiluted net income per share (EPS)Average diluted shares (Million)43Three months ended September 30,20162015YoY
Non-IFRS P&L (%)Three months ended September 30,20162015Software revenueNew licensesOther software revenuePeriodic licenses and MaintenanceService and other revenueTotal revenue44Nine months months ended September .1%100.0%11.6%100.0%11.8%100.0%Cost of Software revenue5.0%4.8%5.1%5.1%Cost of Service and other revenueResearch and developmentMarketing and 10.5%17.2%31.3%General and administrative6.9%7.2%7.1%7.1%Total operating expenses68.0%68.8%70.4%71.2%Operating incomeFinancial revenue and other, netIncome tax rate (% of IBIT)Non-controlling interestNet Income (to equity holders of the %19.1%
IFRS – Non-IFRS Reconciliation QTDRevenue and Gross MarginThree months ended September 30,( million, except % and per share data)Total RevenueIncrease (Decrease)2016 IFRSAdjustment(1)2016Non-IFRS2015 otal Revenue breakdown by activity45Software revenueNew Licenses revenueOther software revenuePeriodic and Maintenance revenueRecurring portion of Software revenueService and other revenueTotal Revenue breakdown by product line646.8161.53.1482.275%88.4CATIA SW revenueENOVIA SW revenueSOLIDWORKS SW revenueOther SW revenueService and other revenueTotal Revenue breakdown by geography237.577.0152.2180.188.4Americas revenueEurope revenueAsia revenueGross MarginCost of Software revenueSoftware Gross margin*Cost of Service and other revenueService Gross margin225.4302.1207.7( 36.9)94.3%( 7.03.1%3.6%25.5%0.4%2.6%24.4%( 36.5)94.4%( 74.4)15.8%( 33.4)94.4%( 72.3)12.0%0.2( 33.2)94.5%( 72.0)13.5%10.5%9.9%3.2%3.3%5.70.3
IFRS – Non-IFRS Reconciliation QTDExpenses & Earnings( million, except % and per share data)Total Operating ExpensesThree months ended September 30,2016 IFRSAdjustment(1)2016Non-IFRS( 574.3)74.1Share-based compensation expenseAmortization of acquired intangiblesOther operating income and expense, netOperating IncomeOperating MarginFinancial revenue & other, netIncome tax expenseNon-controlling interestNet Income attributable to shareholdersDiluted net income per share, in EUR( 23.5)( 37.8)( 12.8)160.92015 IFRS2015Non-IFRSIFRSNon-IFRS( 500.2)( 526.9)54.6( 472.3)9.0%5.9%-( 11.2)( 42.8)( 0.6)235.3148.823.537.812.874.421.9%( 0.8)( 45.1)( 1.9)113.10.4432.0%( 1.2)( 70.6)( 1.9)161.60.63( 0.4)( 25.5)48.50.192016 IFRS4611.242.80.6-64.922.0%( 1.0)( 41.7)( 0.6)105.50.41( 21.9)43.00.17213.78.1%10.1%31.2%( 1.0)( 63.6)( .7%8.8%8.6%Three months ended September 30,( million)Cost of revenueResearch and developmentMarketing and salesGeneral and administrativeTotal Share-based compensation expenseIncrease (Decrease)Adjustment(1)( 111.5)( 131.8)( 224.1)( 56.3)Adjust.0.610.07.35.623.52016Non-IFRS( 110.9)( 121.8)( 216.8)( 50.7)2015 IFRS( 105.7)( 114.9)( 211.3)( 51.6)Adjust.0.54.63.82.311.22015Non-IFRS( 105.2)( 110.3)( 207.5)( 49.3)
IFRS – Non-IFRS Reconciliation YTDRevenue and Gross MarginNine months months ended September 30,( million, except % and per share data)Total RevenueIncrease (Decrease)2016 IFRSAdjustment(1)2016Non-IFRS2015 IFRSAdjustment(1)2015Non-IFRSIFRSNon-IFRS2 180.62.42 183.02 043.031.62 074.66.7%5.2%1 799.5479.716.21 303.672%243.55.5%3.1%-48.8%7.1%1.91 829.2495.816.21 317.272%245.47.2%6.4%-48.8%8.1%0.41 930.4511.08.31 .9%11.1%8.9%2.7%2.9%Total Revenue breakdown by activitySoftware revenueNew Licenses revenueOther software revenuePeriodic and Maintenance revenueRecurring portion of Software revenueService and other revenueTotal Revenue breakdown by product line471 928.4510.48.31 409.773%252.22.00.61.429.716.113.6CATIA SW revenueENOVIA SW revenueSOLIDWORKS SW revenueOther SW revenueService and other revenueTotal Revenue breakdown by 455.9541.9252.6Americas revenueEurope revenueAsia revenueGross MarginCost of Software revenueSoftware Gross margin*Cost of Service and other revenueService Gross .4%2.9%11.3%( 112.1)94.2%( 230.4)8.6%1.0( 111.1)94.2%( 229.4)9.2%( 105.4)94.1%( 217.2)10.8%0.3( 105.1)94.3%( 216.9)11.6%6.4%5.7%6.1%5.8%1.00.3
IFRS – Non-IFRS Reconciliation YTDExpenses & EarningsNine months months ended September 30,( million, except % and per share data)2016 IFRSAdjustment(1)Total Operating Expenses(1 735.8)199.0(1 536.8)Increase (Decrease)2015 IFRSAdjustment(1)2015Non-IFRSIFRSNon-IFRS(1 625.9)149.1(1 476.8)6.8%4.1%Share-based compensation expenseAmortization of acquired intangiblesOther operating income and expense, net( 57.5)( 115.2)( 26.3)57.5115.226.3-( 21.9)( 120.4)( 6.8)21.9120.46.8-Operating Income444.8201.4646.2417.1180.7597.86.6%Operating MarginFinancial revenue & other, netIncome tax expenseNon-controlling interestNet Income attributable to shareholdersDiluted net income per share, in EUR20.4%( 17.6)( 118.6)( 4.3)304.31.1829.6%( 6.2)( 196.7)( 4.3)439.01.7120.4%2.7( 141.2)( 2.9)275.71.0828.8%2.7( 202.1)( 2.9)395.51.54-16.0%48.3%10.4%9.3%11.4( 78.1)134.70.532016 IFRSCost of revenueResearch and developmentMarketing and salesGeneral and administrativeTotal Share-based compensation expense( 60.9)119.80.46Nine months months ended September 30,( million)482016Non-IFRS( 342.5)( 401.0)( 684.1)( 166.7)Adjust.2.023.919.112.557.52016Non-IFRS( 340.5)( 377.1)( 665.0)( 154.2)2015 IFRS( 322.6)( 366.5)( 657.1)( 152.5)Adjust.0.69.08.14.221.92015Non-IFRS( 322.0)( 357.5)( 649.0)( 148.3)8.1%-2.7%48.3%11.0%11.0%
Financial Revenue and OtherNon-IFRSMEUR493Q163Q15varYTD 16YTD 15varInterest IncomeInterest ExpenseFinancial net 3.115.5(4.6)10.9(2.7)(5.1)(7.8)Exchange Gain / (Loss)Other Income / (1.4)0.3Total(1.2)(1.0)(0.2)(6.2)2.7(8.9)
Exchange Rate evolutionFrom assumptions to actual dataBreakdown of P&L by currency for YTD 16Revenue *Operating Expenses*USD37.2%35.9%QTDJPY13.5%5.2%YTD20162015% changeEUR/USD1.121.11 1%EUR/JPY114.3135.9-16%EUR/USD1.121.11 1%EUR/JPY121.0134.8-10% /EUR – 3Q16/3Q15 Variance /EUR – 3Q16/3Q15 VarianceAverage /EUR rate1.11 - 1.12Average /EUR rate135.9 - 114.33Q163Q153Q151.12135.93Q161.11in averagein average114.3in average50Average Exchange ratesin average
Comparing 3Q16 with mid-range ObjectivesNon-IFRS720.0 5.0%OperatingExpenses(501.8) 6.2%OperatingProfit218.2 2.1%OperatingMargin30.3%-0.9ptUSD impact8.0(5.1)2.9 0.1ptJPY impact including hedging3.3(1.3)2.0 0.1ptRevenue3Q16 Guidances mid-rangeGrowth YoY51Other currencies and other hedgingimpactTotal FX5.4(3.3)2.1 0.1pt16.7(9.7)7.0 0.3ptActivity / Cost Control / Other(1.2)11.310.1 1.4ptDelta: Reported vs guidances15.51.617.1 1.7pt3Q16 ReportedGrowth YoY735.5 7.2%(500.2) 5.9%235.3 10.1%32.0% 0.8pt3Q15 Reported686.0(472.3)213.731.2%
Estimated FX impact on 3Q16 Op. ResultsNon-IFRSEUR millions ratingMargin3Q16 Reported735.5(500.2)235.332.0%3Q15 Reported686.0(472.3)213.731.2%Growth as reported 7.2% 5.9% 10.1% 0.8 ptTotal FX Impact (2.9)(0.3)3Q15 exFX686.5(473.1)213.431.1%Growth exFX 7% 6% 10% 0.9 ptImpact of Actual Currency RatesUSD impactJPY impact including hedgingOther currencies and other hedging impact52
Estimated FX impact on YTD16 Op. 6 Reported2,183.0(1,536.8)646.229.6%YTD2015 Reported2,074.6(1,476.8)597.828.8%Growth as reported 5.2% 4.1% 8.1% 0.8 8.1)(7.2)2,060.3(1,469.7)590.628.7% 6% 5% 9% 0.9 ptEUR millions FYOperating OperatingIncomeMarginImpact of Actual Currency RatesUSD impactJPY impact including hedgingOther currencies and other hedging impactTotal FX Impact adjustmentYTD2015 exFXGrowth exFX53
Consolidated Statement of Cash FlowsIFRS54(in millions of )3Q163Q15VariationYTD16YTD15VariationNet income attributable to equity holders of the parentNon-controlling interestNet incomeDepreciation of property & equipmentAmortization of intangible assetsOther non-cash P&L itemsChanges in working capitalNet Cash Provided by (Used in) Operating Activities 36.2(65.6)(4.5)Additions to property, equipment and intangiblesPayment for acquisition of businesses, net of cash acquiredSale (Purchase) of short-term investments, netInvestments, loans and othersNet Cash Provided by (Used in) Investing Activities .3)Proceeds (Repayment) of short term and long term debt(Purchase) Sale of treasury stockProceeds from exercise of stock-optionsCash dividend paidNet Cash Provided by (Used in) Financing Activities (112.3)10.8(24.5)(9.1)(3.4)(26.2)Effect of exchange rate changes on cash and cash equivalents (IV)(3.4)(6.1)2.7(3.3)32.4(35.7)Increase (Decrease) in Cash (V) (I) (II) (III) (IV)(178.2)75.9(254.1)127.1415.8(288.7)Cash and cash equivalents at Beginning of Period2,585.81,444.12,280.51,104.2Cash and cash equivalents at End of Period2,407.61,520.02,407.61,520.0Cash and cash equivalents variation(178.2)75.9127.1415.8
Balance SheetIFRS55(in millions of )End ofSep-16End ofJun-16VariationSep-16 / Jun-16End ofDec-15VariationSep-16 / Dec-15Cash and cash equivalentsShort-term investmentsAccounts receivable, netOther current assetsTotal current assetsProperty and equipment, netGoodwill and Intangible assets, netOther non current .9-0.9-83.1 59.0-157.9 2.1 47.8 172.4-21.3-199.6 79.5 31.0-4.7 185.1 72.2Total Assets6,595.06,491.1 103.96,311.4 283.6Accoun
4 Q3 2016 Highlights Delivering good Q3 total revenue, operating margin and EPS 3DEXPERIENCE delivering strong growth ENOVIA showing good momentum SOLIDWORKS performing well Broadening reach in T&M, High-tech, CG-Retail, CPG-Retail and AEC Closing CST acquisition and expanding in Electromagnetic Simulation Updating FY16 guidance for Q3 positive currency impact and CST acquisition,
