Dassault Systemes S.A. ( DASTY) Q2 2011 Earnings Call July 28, 2011 4:30 AM ET Executives François-José Bordonado – Head, IR Bernard Charles – President and CEO Thibault de Tersant – Senior EVP and CFO Analysts Marc Geall – Deutsche Bank AG Sébastien Thévoux-Chabuel – Oddo & Cie SCA Presentation François-José Bordonado (Starts Abruptly)
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As you may have seen, the – I think we are quite pleased with the result for the second quarter. In the first quarter result, the IBM acquisition was done last year April 1, 2010. The new license, the revenue growth is up 9% in the quarter excluding exchange rate 15%, so year-to-date it’s a nice 21%. And there is a strong dynamic for the new licenses, which we think is an important parameter, of course, at 36% for the quarter. The software growth is also strong at 16%, and the operating margin is, as we planned, at 28%. The EPS is up 10%. So the key element is really new license growth.I think the takeaway is really the balance in the growth between product lines, channels on regions, geographic regions, so it’s well-balanced. Our diversification from a geographic standpoint is working as plan, and I think there is still a lot of potential to do, to do better, but I think we are very pleased with what is going on right now. And we’ve introduced a significant milestone. We are introducing for the second half of this year the – our solution taking advantage of the cloud infrastructure. You have seen the announcement with Amazon a few weeks ago. This is a key milestone because I think it demonstrates, number one, that the Version 6, the V6 architecture is cloud enabled. This architecture is consistent between cloud enterprise servers and clients, so there is a full consistency; not so many softwares in the world where this can be achieved. So we think it’s a very key differentiator. Of course, we are on a start, whole product portfolio are not available and we don’t planned to provide all product portfolios, but we provide – to provide very key products, which we show the value on how cloud can be used, and I will be back on that topic later on.
If you look now on the software revenues by product lines, CATIA is up 13% on the quarter, 26% on the first half. ENOVIA with strong growth also, 22%, and other PLM software, 22%; Mainstream 3D 11%; total software added to 16% growth. A very strong new license dynamic for ENOVIA at 49% excluding exchange rate. You have seen that we have announced key customer wins on those – we say even more they’re win back we are replacing existing PLM infrastructure with our infrastructure.So from a channel perspective when you look at our – the way we reach the world through these three channels called the Business Transformation channel, direct engagement with customers. It’s a pleasant 57% of our revenue, up 15% on the quarter. 24% of our total revenue is coming from what we call the indirect PLM channel, Value Solutions, up 18%. On the Professional channel, collection of resellers with a high density resellers around the globe, is representing 19% of our revenue, up 11%. The reason why we communicated that this time is to give you the new picture of how the split of revenue, where it is coming from after – post-merger of all our sales force with the IBM sales force, so I think it provides a baseline for you to think about how we are playing forward. Those channels are very, very – have very, very strong identity. On the PLM BT channel, it’s about direct customer engagement, large customer engagement, innovation on business transformation. The second one is really with very selective companies, which are satisfied resellers and we want to sell on value the PLM solution. And, of course, the third one, the Profession channel, is more for volume. If you look at from a geo standpoint, Americas still going well at 20%, Europe is with lower growth at 8% on the second quarter, 19% on the year. But you have notice that Europe was very strong last year, so the base effect is there; no specific concern for Europe on the full year. And Asia is up 21%, 25% on the full year. So good dynamic in Americas, healthy growth in Europe, and a very strong quarter in Asia thanks to China and India. Read the rest of this transcript for free on seekingalpha.com