Business Outlook

Thibault de Tersant, Senior Executive Vice President, CFO, commented, “During the second quarter, we delivered our key financial metrics - software, new licenses revenue, earnings per share - at the high end of our guidance and reported a strong operational cash flow increase. The signing of the extended strategic partnership with Boeing was a remarkable milestone. Its ramp-up, starting in 2018, should drive revenue growth for several years and represents a key inflection point in 3DEXPERIENCE adoption by the market.

“Looking forward, we are reconfirming for 2017 our constant currencies objectives for total revenue growth of 6% to 7%, new licenses revenue growth of 8% to 10%, which implies a two-digit new licenses revenue growth in the second half of 2017, and recurring revenue growth of about 6%, with the year as a whole reflecting further strengthening of our competitive positioning.

“While maintaining the revenue and new license growth rate of our objectives, excluding currency impact, we are reflecting the recent strengthening of the euro against all our major currencies, leading to a reduction of our reported revenue range of €50 million. While preserving our investments, we managed to keep our margin target unchanged at around 31.5% and reflected the reduction of reported revenue on EPS.” (All figures on a non-IFRS basis.)

The Company’s third quarter and full year 2017 financial objectives are as follows:

• Third quarter 2017 non-IFRS total revenue objective of about €760 to €775 million based upon the exchange rates assumptions below, growing about 6% to 8% in constant currencies; non-IFRS operating margin of about 31.0% to 32.0%; and non-IFRS EPS of about €0.62 to €0.65;
• 2017 non-IFRS revenue growth objective of about 6% to 7% in constant currencies at €3.240 to €3.265 billion (reflecting the principal 2017 currency exchange rate assumptions below for the US dollar and Japanese yen as well as the potential impact from additional currencies representing about 10% of the Company’s total revenue in 2016);
• 2017 non-IFRS operating margin of about 31.5% compared to 2016 where the non-IFRS operating margin was 31.2%;
• 2017 non-IFRS EPS of about €2.62 to €2.66, representing a growth objective of about 5% to 7%;
• Objectives are based upon exchange rate assumptions of US$1.15 per €1.00 for the 2017 third quarter and US$1.12 per €1.00 for the full year; and JPY130 per €1.00 for the 2017 third quarter and JPY125.9 per €1.00 for the full year before hedging.

The Company’s objectives are prepared and communicated only on a non-IFRS basis and are subject to the cautionary statement set forth below.

The 2017 non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2017 principal currency exchange rates above: deferred revenue write-downs estimated at approximately €12 million, share-based compensation expense, including related social charges, estimated at approximately €99 million and amortization of acquired intangibles estimated at approximately €161 million. The above objectives also do not include any impact from other operating income and expense, net principally comprised of acquisition, integration and restructuring expenses, from one-time items included in financial revenue and from one-time tax restructuring gains and losses. Finally, these estimates do not include any new stock option or share grants, or any new acquisitions or restructurings completed after July 25, 2017.

Today’s Webcast and Conference Call Information

Today, Tuesday, July 25, 2017, Dassault Systèmes will first host from Paris a webcasted meeting 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 meeting and conference call will be available via the Internet by accessing http://www.3ds.com/investors/. Please go to the website at least 15 minutes prior to the webcast or conference call to register, download and install any necessary audio software. The webcast and conference call will be archived for one year.

Additional investor information can be accessed at http://www.3ds.com/investors/ or by calling Dassault Systèmes’ Investor Relations at 33.1.61.62.69.24.

Key Investor Relations Events

Third Quarter 2017 Earnings, October 25, 2017

Forward-looking Information

Statements herein that are not historical facts but express expectations or objectives for the future, including but not limited to statements regarding 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 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 Company’s current outlook for 2017 takes into consideration, among other things, an uncertain global economic environment. 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 the Company makes every effort to take into consideration this uncertain macroeconomic outlook, the Company’s business results, however, may not develop as anticipated. Further, 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. The Company’s actual results or performance may also be materially negatively affected by numerous risks and uncertainties, as described in the “Risk Factors” section of the 2016 Document de Référence (Annual Report) filed with the AMF (French Financial Markets Authority) on March 22, 2017, and also available on the Company’s website www.3ds.com .