- IFRS total revenue increased 9%. Non-IFRS total revenue increased 12%, on software revenue growth of 9% and services and other revenue growth of 37%. The non-IFRS services gross margin improved to 17.3% from 5.2%, benefiting from the higher service margin profile of digital content creation as well as ongoing operational improvements. Excluding acquisitions and divestitures, non-IFRS total revenue and software revenue increased 4% and 5%, respectively. (All growth rates in constant currencies.)
- On a regional basis, non-IFRS revenue in Europe increased 12%, led by the United Kingdom and Germany; revenue in the Americas increased 13%, with an improved business dynamic; and in Asia, revenue increased 10%, led by South Korea and well supported by Japan and China. (All growth rates in constant currencies.)
- Non-IFRS software revenue growth of 9% was driven by new licenses revenue which increased 11% on strong growth in Europe as well as from acquisitions and by recurring software revenue which increased 5% (IFRS) and 9% (non-IFRS) on growth in maintenance and rental. (All growth comparisons are in constant currencies.)
- By brand, non-IFRS software revenue increased 6% for CATIA. ENOVIA increased 8% and SOLIDWORKS increased 6% with new seats licensed totaling 27,049. Other software was higher by 20%, reflecting the addition of Accelrys, Apriso and RTT and double-digit software growth for SIMULIA across all three regions. (All growth comparisons are in constant currencies.)
- The non-IFRS operating margin decreased to 28.1% from 29.5%, and excluding currency effects was essentially stable as the Company focused on driving underlying organic operating margin growth.
- IFRS and non-IFRS net income per share reflected the combined impact from currency and a higher effective tax rate. Specifically, diluted net income per share decreased 23% (IFRS) and 2% (non-IFRS). Currency had an estimated negative 12 percentage points of impact on non-IFRS EPS growth.
Cash Flow and Other Financial Highlights
Net operating cash flow was €172.3 million and €354.6 million for the three and six-months ended June 30, 2014, compared to €168.3 million and €353.3 million for the 2013 respective periods.
In the 2014 First Half, the Company uses of cash were for acquisitions of €657.3 million, net of cash acquired; share repurchases of €130.0 million, cash dividends of €32.3 million and capital expenditures of €14.1 million. The Company received cash for stock options exercised of €34.6 million.
At June 30, 2014, the net financial position was €1.00 billion, compared to €1.44 billion at December 31, 2013. Cash, cash equivalents and short-term investments totaled €1.35 billion and long-term debt was €350.0 million, compared to €1.80 billion, and €360.0 million, respectively, at December 31, 2013.
Cash Dividend and Stock Split Approved at Annual Shareholders’ Meeting
At the Annual Shareholders’ Meeting held on May 26, 2014, shareholders approved a 4% increase in the annual cash dividend per share equivalent to €0.83 per share for the fiscal year ended December 31, 2013 and to offer an option to receive payment of the dividend in the form of new Dassault Systemes shares or in cash. 68% of Dassault Systèmes’ shares opted to receive the dividend in the form of new shares.
The payment of the dividend was completed on June 25, 2014 with the issuance of 802,310 new ordinary shares and with the cash payment in the aggregate amount of €32.3 million.
In addition, shareholders’ also approved a two-for-one stock split which became effective on July 17, 2014, with the total number of shares post-split of 255,723,498.
Summary of Recent Business, Technology and Customer Highlights
On June 13, 2014 in conjunction with its Capital Markets Day, Dassault Systèmes unveiled its next multi-year growth plan with the initiation of a 2019 non-IFRS EPS goal of about €7.00 or €3.50 on a split-adjusted basis, commenting that this goal represents about a 15% CAGR and is top-line driven with multiple key growth drivers. The EPS goal incorporates current exchange rates for the US dollar and Japanese yen and other major currencies.
On May 21, 2014, Dassault Systèmes introduced a new brand, BIOVIA for scientific innovation in the Age of Experience. The new brand is a combination of the Company’s own activities in BioIntelligence, its collaborative 3DEXPERIENCE technologies, and the leading life sciences and material sciences applications from the recent acquisition of Accelrys.
During the 2014 First Half the Company launched 11 new Industry Solution
Experiences. These include: Façade Design for Fabrication (cloud),
Ideation & Concept Design for Medical Devices (cloud), Ideation &
Concept Design for High-Tech (cloud), Ideation & Concept Design for
Automotive (cloud), Safe Plant Engineering, Solution for Wind Turbines
Engineering Offices (cloud), Solution for Industrial Equipment
Engineering Offices (cloud), Solution for Aerospace Suppliers (cloud),
Solution for Automotive Engineering Services, Entry Solution for
Engineering Services (cloud), and Smart & Synchronized.