Dassault Systèmes Reports Strong Revenue and Earnings Growth and Upgrades 2015 Financial Objectives

VÉLIZY-VILLACOUBLAY, France — July 23, 2015 —Dassault Systèmes (Euronext Paris: #13065, DSY.PA), the 3DEXPERIENCE Company, world leader in 3D design software, 3D Digital Mock Up and Product Lifecycle Management (PLM) solutions, today announced IFRS unaudited financial results for the second quarter and six months ended June 30, 2015. These results were reviewed by the Company's Board of Directors on July 22, 2015.

Summary Highlights (unaudited)

• Organic, constant currency new licenses revenue growth of 9% in Q2 and 11% in H1
• Good SIMULIA, DELMIA, EXALEAD and GEOVIA brands performance
• Q2 Asia non-IFRS revenue up 20% in constant currencies on strong demand across portfolio
• Strategic initiatives: Smart Cities, Additive Manufacturing, Multi-physics Simulation
• Upgrades 2015 Non-IFRS EPS Growth Objective: 18% (was 15-17% previously)

2015 Second Quarter and First Half Financial Highlights (unaudited)

"Dassault Systèmes' second quarter and first half financial performance were driven by good customer dynamics for our solutions in a wide range of industries. We also made significant progress in advancing strategic initiatives," commented Bernard Charlès, Dassault Systèmes President and Chief Executive Officer.

"Among these is 3D printing, which represents game-changing possibilities in terms of production business models. Additive manufacturing requires unique software specification-based design capabilities and intimate understanding of new materials, all of them at the core of our Research & Development efforts in the past years, or acquired with BIOVIA. The 3DEXPERIENCE platform makes it possible to industrialize comprehensive additive manufacturing processes.

"Addressing Smart Cities, we're developing 'Virtual Singapore', the digital twin experience of the city-state and a world first, based on our 3DEXPERIENCity solutions, in cooperation with the Singapore Prime Minister's office. Over the course of the last 20 years, Dassault Systèmes has been deploying digital twins for many complex industries, from aerospace to biotech. We're now applying it to cities, some of the most complex products ever created – in order to improve infrastructure development, risk management or traffic optimization, for example. Large-scale simulations of an entire city showcase what is possible using the 3DEXPERIENCE platform. With 'Virtual Singapore' we will have a 'master model' to represent, simulate and optimize an urban experience.

"And recently for Internet of Experiences, Netvibes, part of our 3DEXPERIENCE platform, with its dashboard intelligence, has introduced a revolutionary innovation of its stand-alone product. Called 'Dashboard of Things', it introduces 'programmable intelligence', whereby businesses and consumers can very easily program automatic interactions between apps and devices, to provide further value to its 7 million users. This is an example of how Dassault Systèmes gives meaning to the Internet of Things."

2015 Second Quarter Financial Summary (unaudited)

• IFRS total revenue increased 16% on software revenue growth of 14% and services and other revenue growth of 30%. On a non-IFRS basis, total revenue increased 14%, on software revenue growth of 12% and services and other revenue growth of 28%. (All growth rates in constant currencies.)
• From a regional perspective and in constant currencies, Asia had the strongest performance in the second quarter with non-IFRS total revenue growth of 20%. The region displayed strength across all geographies. Non-IFRS total revenue for both Europe and the Americas increased 12% in constant currencies, led by France and Southern Europe and by North America in the respective regions.
• Non-IFRS new licenses revenue increased 17%, with the strongest growth coming from large customers in the quarter. New licenses growth also benefited from acquisitions completed in 2014. Non-IFRS periodic license, maintenance and other software-related revenue increased 11%, reflecting strong maintenance growth and 2014 acquisitions and accounted for 70% of non-IFRS total software. (All growth comparisons are in constant currencies.)
• By product line, non-IFRS software revenue increased 4% for CATIA, reflecting strong growth in new licenses revenue on a high comparison base; ENOVIA increased 1%, reflecting the transition underway with good 3DEXPERIENCE platform prospects. Other software increased 35%, with the inclusion of Quintiq acquired in September 2014 and Accelrys in April of last year and year over year improvement across brands, including DELMIA, GEOVIA and EXALEAD. SOLIDWORKS software revenue grew 11% on new licenses growth and strong recurring revenue. (All growth comparisons are in constant currencies.)
• IFRS operating income increased 58% to €157.7 million. Non-IFRS operating income increased 31% to €212.4 million on revenue growth, currency benefits and operating margin expansion. The non-IFRS operating margin increased to 29.4%, compared to 28.5% in the year-ago second quarter, with organic operating margin improvement and currency tailwinds more than offsetting acquisition dilution.
• The IFRS effective tax rate increased to 36.8% in the 2015 second quarter compared to 35.6% in the year-ago quarter. The non-IFRS effective tax rate increased to 36.1%, compared to 34.4% in the 2014 second quarter.
• IFRS diluted net income per share increased 50% to €0.39 per share, compared to €0.26 per share on a two-for-one split-adjusted basis in the year-ago quarter. Non-IFRS diluted net income per share grew 25% to €0.53, compared to €0.43 per share on a two-for-one split-adjusted basis in the 2014 second quarter on higher revenue, currency benefits and operating margin expansion.

2015 First Half Financial Summary (unaudited)

• IFRS total revenue increased 16%. Non-IFRS total revenue increased 17%, with software revenue growth of 15% and services and other revenue growth of 28%. Excluding acquisitions and in constant currencies, non-IFRS total revenue growth accelerated to 7% in the 2015 First Half from 4% in the 2014 First Half and non-IFRS software revenue growth increased to 8% from 5% in the year-ago period. (All growth rates in constant currencies.)
• Excluding acquisitions and in constant currencies, non-IFRS new licenses software revenue increased 11% in the First Half 2015.
• For the 2015 First Half, the Company benefited from strong growth in most core industries well supported by growth of a number of the diversification industries. Specifically, The Company experienced solid new business activity in multiple industries, most notably Transportation & Mobility, Aerospace & Defense, Marine & Offshore, Life Sciences, CG, Energy, Process & Utilities and Natural Resource.
• On a regional basis, for the 2015 First Half, Europe represented 43% of total non-IFRS revenues, the Americas 31% and Asia 26%. The strongest performance was recorded in Asia with 19% growth, led by Korea and India, well supported by growth in Japan and China, representing the two largest regions. Non-IFRS revenue in Europe increased 15%, led by France and Southern Europe. Non-IFRS revenue in the Americas increased 17% on software and services growth in North America. (All growth rates in constant currencies.)
• Non-IFRS software revenue increased 15%, with new licenses revenue growth of 20% led by Asia. Periodic license, maintenance and other software-related revenue increased 14% (IFRS) and 13% (non-IFRS) with a strong performance across all three regions. Recurring software revenue represented 71% of total software revenue for the 2015 First Half and was comprised of maintenance and periodic licenses (rental or subscriptions). (All growth comparisons are in constant currencies.)
• By product line, non-IFRS software revenue increased 4% for CATIA, 14% for SOLIDWORKS, with new SOLIDWORKS seats licensed up 10%; and Other Software, which included the 2014 acquisitions of Quintiq and Accelrys, increased 45%. On an organic basis, Other Software increased 14%. (All growth comparisons are in constant currencies.)

• The non-IFRS operating margin was 27.7% for the 2015 First Half, slightly lower than the 28.1% recorded in the year-ago period. For the 2015 First Half the Company delivered an organic operating margin improvement of approximately 100 basis points.
• IFRS diluted net income per share increased 43%. Non-IFRS diluted net income per share increased 22% to €0.96 per diluted share, compared to €0.79 per diluted share on a split adjusted basis. Both IFRS and non-IFRS net income reflected strong revenue growth, organic operating margin expansion and the positive influence from currencies, offset in part by higher effective tax rates.

Business Outlook 
Thibault de Tersant, Senior Executive Vice President, CFO, commented, "Our second quarter financial results came in above our expectations, with the upside coming from solid execution of our new direct sales model, strong growth in Asia across the board and improvement in several brands including DELMIA, GEOVIA and EXALEAD.

"During the first half we delivered on our objectives for organic double-digits non-IFRS new licenses revenue growth and an increase in our organic non-IFRS operating margin of approximately 100 basis points – both targets excluding any currency benefits. And on top of this we have delivered excellent cash flow growth.

"Turning to our 2015 financial objectives, we are increasing our revenue range by about €40 million in total to €2.80 to €2.82 billion and are increasing our 2015 non-IFRS EPS objective to about €2.15, representing growth of about 18%. We are maintaining our target for double-digit organic new licenses revenue growth in constant currencies for the second half, even with a stronger base of comparison."

About Dassault Systèmes 
Dassault Systèmes, the 3DEXPERIENCE Company, provides business and people with virtual universes to imagine sustainable innovations. Its world-leading solutions transform the way products are designed, produced, and supported. Dassault Systèmes' collaborative solutions foster social innovation, expanding possibilities for the virtual world to improve the real world. The group brings value to over 190,000 customers of all sizes, in all industries, in more than 140 countries. For more information, visit www.3ds.com .

CATIA, SOLIDWORKS, ENOVIA, DELMIA, SIMULIA, GEOVIA, EXALEAD, 3D VIA, 3DSWYM, BIOVIA, NETVIBES, 3DEXCITE are registered trademarks of Dassault Systèmes or its subsidiaries in the US and/or other countries.