PARIS and PROVIDENCE – Dassault Systèmes, the French parent company of Providence-based virtual-testing developer Simulia, saw its annual profit rise 10.92 percent last year to 198 million euros in constant currencies (about $254.8 million at today’s rate of exchange) from the €178.5 million ($229.7 million) it posted for 2007. That outpaced companywide revenue, which grew 6.04 percent year-over-year to $1.72 billion.
Earnings per diluted share rose to €1.66 (about $2.137) from 2007’s €1.49 ($1.918).
Those gains came despite a lackluster fourth quarter, in which “an increasingly difficult macroeconomic environment” spurred contract deferrals that hurt the period’s revenue, margin and earnings, the company said in its report early today
“Dassault Systèmes ended the fiscal year with growth in revenue and earnings, a high level of recurring software revenue and a strong balance sheet,” said Bernard Charlès, the parent company’s president and chief executive. Moreover, “thanks to our strategic investments in our product portfolio and sales channels, DS gained one point of market share in 2008.”
Full-year software sales grew 11 percent – to €1.15 billion ($1.485 billion), or 86 percent of total revenue – led by recurring software sales, which rose 18 percent compared with 2007. Among regions, growth was fastest in the emerging markets of China, India, Brazil, Eastern Europe and Russia, where DS revenue rose about 40 percent last year.
Meanwhile, worldwide services and other revenue fell 5 percent to €180.4 million ($232.22 million), reflecting both the second-quarter spinoff of the company’s French product-lifecycle management (PLM) sales division, Dassault Systèmes Solutions France, or DSF – and the “winding down of certain historical channel management activities and related fee revenues. However, DS PLM consulting services revenue posted year-over-year growth in constant currencies,” the company said.
The unaudited results released today were somewhat sunnier than the preliminary and partial data DS released last month, which predicted fourth-quarter earnings would fall at least 10 percent to between €0.65 and €0.70 per diluted share. (READ MORE)
For the three months ended Dec. 31, Dassault Systèmes posted net income of €71.6 million (about $92.20 million), a 6.53-percent decline from the year-ago €76.6 million ($98.59 million), on fourth-quarter revenue that rose 5.45 percent to €382.9 million ($492.96 million). Earnings per diluted share fell to €0.60 (about 77.2 cents) from the 2007 fourth quarter’s €0.64 (about 82.4 cents).
Total software sales rose 1 percent compared with the year-ago period, as growth in recurring software revenue more than offset declines in sales of new licenses. Meanwhile, fourth-quarter “services and other revenue decreased 11 percent in constant currencies, principally reflecting the DSF divestiture at the end of the 2008 second quarter and winding down of certain historical channel management activities,” the company said.
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As in its third-quarter report, DS praised Providence-based Simulia for its double-digit software-revenue growth, although it added that fourth-quarter sales of the division’s Catia software fell 7 percent.
Other highlights of the Providence-based division’s fourth quarter included:
• The Nov. 19 release of Abaqus 6.8 Extended Functionality (6.8-EF), the latest version of the company’s market-leading finite-element analysis (FEA) software suite.
• The Dec. 3 release of CZone for Abaqus, an add-on product to aid in simulations of “the crushing behavior of energy-absorbing laminated composites. CZone “will provide significant value to the automotive and aerospace industries by enabling them to accelerate the design cycle and lower the costs of including new composite materials in their vehicles,” Graham Barnes, director of Engenuity, said at the time. The new package incorporates the composite-crushing technology developed by third-quarter acquisition Engenious with the existing composite-analysis capabilities of Simulia’s Abacus software.
Going forward, “we expect 2009 to be a difficult global economic environment in which to operate,” said Charlès, the DS president and CEO. “But we move into the year with an expanded addressable market, strengthened sales channels, and a richer product portfolio to serve our customers.
“Moreover, our new Version 6 collaborative platform enables us to bring more flexibility and value to our customers through further coverage of industry processes. We are pleased that a number of companies – across consumer goods, energy, life sciences [and] high tech, as well as aerospace and automotive – have become strategic partners with DS as we work closely with them to leverage 3D PLM for sustainable product development.”
Dassault Systèmes (Nasdaq: DASTY and Euronext Paris: DSY.PA) specializes in 3D and product lifecycle management (PLM) software. It is the parent of the Providence-based Simulia, a developer of DS-simulation software including the Abaqus and Catia analysis applications. All DS figures above are stated on a constant-currency basis, according to U.S. generally accepted accounting practices (GAAP). For more information, visit www.simulia.com.
