Dassault Systèmes Non-IFRS Net Income Per Share Rises 12.5%

The Tip Desk · June 30, 2016 · 3 min read

The software company reported a first-half non-IFRS operating result of 410.9 million euros as it expands its 3DEXPERIENCE platform.

Dassault Systèmes, the software applications and services provider, reported a non-IFRS diluted net income of 1.08 a share for the first half of 2016, an increase of 12.5% from 0.96 a share in the same period last year,. The company said these results are in line with its non-IFRS financial objectives.

Non-IFRS revenue reached 1.45 billion euros, rising 5% at constant exchange rates. This growth was primarily driven by non-IFRS software revenue, which rose 6% at constant exchange rates. Recurring software revenue, consisting of periodic licenses and maintenance subscriptions, represented 72% of total non-IFRS software revenue and grew 9% at constant exchange rates,.

New license revenue grew 2% at constant exchange rates,. The company noted that new license revenue for the 3DEXPERIENCE platform and Social Industry Experiences specifically rose 68% at constant exchange rates. Dassault Systèmes attributed the slower growth in overall new licenses to the typical weighting of activity toward the end of the year.

Geographically, non-IFRS software growth was strongest in the Americas at 7% and Europe at 6%. Asia recorded 4% growth, which the company said was supported by Japan and China despite a less favorable economic context.

Operating performance improved as non-IFRS operating result rose 7% to 410.9 million euros,. The non-IFRS operating margin increased by 70 basis points to 28.4%,. The company stated that this margin gain was the result of a 90 basis point improvement partially offset by negative exchange rate effects of 20 basis points.

Diversification into new sectors now accounts for approximately 31% of software revenue, up one percentage point from the first half of 2015. The company reported the strongest software revenue growth in the Energy and Process, High Tech, and Marine and Offshore sectors. Among its historical sectors, Industrial Equipment saw the most marked growth.

Cash flow from operating activities rose 8% to 449.1 million euros. The company used this liquidity for 101.9 million euros in dividends, 43.3 million euros in share buybacks, 11.2 million euros for external growth, and 18.4 million euros for fixed asset acquisitions. Net cash stood at 1.64 billion euros at the end of June 2016, compared to 1.35 billion euros at the end of December 2015, while long-term debt remained stable at 1.00 billion euros,.

Strategic expansion continued through acquisitions. The company completed the purchase of Ortems in the second quarter to complement its DELMIA applications. On July 21, 2016, it announced a definitive agreement to acquire CST - Computer Simulation Technology AG to increase the multi-physics simulation capabilities of SIMULIA.

Dassault Systèmes anticipates an acceleration in new license revenue during the second half of 2016. The company plans to improve its recurring current operating margin while increasing investments to prepare for growth in 2017.