Dassault Systemes' CEO Discusses Q4 2011 Results - Earnings Call Transcript
Dassault Systemes SA (
)
Q4 2011 Earnings Call
February 9, 2012 9:00 am ET
Executives
François-José Bordonado - IR
Bernard Charlès - President and CEO
Thibault de Tersant - SEVP and CFO
Analysts
Gunnar Plagge - Citigroup
Michael Briest - UBS
Josep Bori - BNP Paribas
Adam Wood - Morgan Stanley
Presentation
François-José Bordonado
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Good morning, everyone. I am François-José Bordonado, Investor Relations. From the company, we have Bernard Charlès, our President and Chief Executive Officer; and Thibault de Tersant, our Senior Executive Vice President and Chief Financial Officer. I would like to welcome you to Dassault Systemes fourth quarter and full year 2011 presentation which is also being webcasted.
At the end of the presentation, we will take questions from the audience and from participants on the webcasted call. Later today, we will also hold a conference call.
Dassault Systemes' financial results are prepared in accordance with IFRS. In addition, we have provided supplemental non-IFRS financial information. For an understanding of the differences between the two, please see the reconciliation table included in our press release.
Some of the comments we will make during today's presentation will contain forward-looking statements, which could differ materially from actual results. Please refer to our risk factors in our fourth quarter press release and in our 2010 Document de reference and our 2011 Half Year Report.
Let me now introduce Bernard Charlès, President and Chief Executive Officer.
Bernard Charlès
Good morning, everyone. This is a special moment, I think, for Dassault Systemes. Let me tell you why before I review the full year results. I think we are announcing four things this morning.
Number one the full year achievement, which as you maybe have noticed already, in our view were excellent. 2010 was a very good year. I think 2011 will mark an excellent year.
Second, we are announcing the fact that we see on horizon beyond PLM. We are the company who invented PLM in June 1999 for those of you who were already following us. In June '99, we did a world tour and we said there is an era after Digital Mock-up in 3D. Digital Mock-up created to replace the physical mock-up. There is an era after that called Product Lifecycle Management. The move of this Digital Mock-up is how the product life will be managed.
I don't think many people at that time thought that Dassault Systemes would be able to create the portfolio of applications that would go far beyond manufacturing industry on certain industries like life sciences, consumer packaged goods on new sectors, even financial services. We have demonstrated over the 10 years that it was possible.
At that time, that announcement, that day just before the internet bubble was the day where we said we think we can reach a market which is twice the size of the market that was reachable to us before. Today, we are announcing that we believe we've what we call a 3D experience platform, and I will explain to you later what it is. We believe we can extend and multiply by almost 2 the market we can serve in the years to go.
The third announcement is the announcement of Netvibes, the acquisition of Netvibes. What is Dassault Systemes doing buying an native internet-borne company, buying a great technology which is used to create web pages and create a dashboard where you can take all RSS feeds information on the net and put them on a computer or mobile or whatever. Why is Dassault Systemes investing money there? We'll explain why. I think you may have still the same question for EXALEAD acquisition that we did 18 months ago.
And the fourth is related to people and leadership. I'm also pleased and we're delighted to announce that we have now someone joining us at the Executive Committee of Dassault Systemes, Monica Menghini. She is here in this room. Monica Menghini is bringing to Dassault Systemes a tremendous knowledge, having created the 20 brands in the world's best marketing company called Procter & Gamble. So she was for nine years at Saatchi & Saatchi, I think the most creative company.
Monica Menghini is going to take the lead to create the value creation process to make sure that our customers can see and understand what kind of value we bring to them and compare what we say versus what they get, which we think is a nice way to create value for the future. Monica will take care of the industries we serve, the solutions we sell, marketing and corporate communication.
How can a leader from Procter & Gamble company can join the most techy, geeky scientist and software company? It can happen when we convince her to join us. And she has been at Dassault Systemes already for four years. She was at Dassault Systemes to help us develop the market in consumer packaged goods, and we've been very successful in approaching those markets. So we want to generalize this approach.
That's it for announcement. Let me go now to the first topic which is related to the 2011 objectives. I think if you look at all parameters: new license growth, 20%; EPS growth, 17%; operating margin expansion, 180 basis points to 30.4% of operating margin.
The integration of our sales force, we spent €650 million buying our own sales force on the IBM team in 2010. It was a lot of money. Many people were thinking that this will dilute, so 2011 is the first full year where we've demonstrated we can transform the way we sell and engage these customers for the full year. We have transferred all IBM contracts to Dassault Systemes contracts, and we have demonstrated to all our customers that we are a good company to be working with and that we don't need anyone between them and us.
Extremely successful and I think I want to mention that, because this integration is going well on the level factor to improve revenue per salespeople I think is still there, as Thibault will tell me when we discuss about investment.
Indirect sales channel has been strengthened. Also, you remember we have three ways to sell around the world in 80-plus countries, direct sales force for large account, value solution and volume solution. Double-digit for each of those channels.
The diversification by geography is also working well. We have 20% growth. Something very essential, which is just what I talked about quality to the industry, industry-vertical diversification in new sectors like energy, construction, business services. And you remember in 2010, we told you that it was in life science, consumer goods and consumer packaged goods where we continue to grow. The industry verticalization and diversification is also fueling this growth.
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