Jul 30

Written by: Steve Wolfe
7/30/2010 12:25 PM 

The second quarter of 2010 is the first in which Dassault Systèmes recognized revenue from the IBM acquisition. According to the company’s press release, the IBM “share of DS software revenue was estimated at approximately €53 million in the second quarter of 2009.” Add this figure to Dassault’s revenue from the second quarter of 2009, and its PLM revenue rose a scant three percent year-to-year, not the robust 30 percent suggested by the financial statements. Dassault Systèmes’ overall revenues (in euros) rose 6 percent when similarly adjusted for the IBM effect, not the 24 percent reported. The lower figure is in line with that of US rival Parametric Technology, which reported a seven-percent sales increase.

Unraveling the effect of currency fluctuations on Dassault Systèmes’ revenues would make a good question on a graduate-school finance exam. Dassault Systèmes claims PLM software grew 27 percent and mainstream 3D (SolidWorks) grew 14 percent year-over-year, excluding the effects of foreign exchange. But converting Dassault Systèmes revenues to US dollars at prevailing exchange rates gives a different picture. Dassault Systèmes PLM software revenues grew 21 percent from $280.8 million to $340.9 million. SolidWorks revenue grew 12 percent from $88.9 million to $99.1 million. Adjusting PLM dollar revenues for the IBM contribution indicates they fell three percent from last year’s levels.

Figure 2 - The decline of the euro relative to the dollar depressed revenue growth when compared with US companies.
(Click image for an enlarged view.)

With net income of €48 million ($62 million US) and a cash position of almost €400 million ($507 million) net of long-term debt and other non-current obligations, Dassault Systèmes appears to be in good financial shape. But like PTC, its recovery from the recent recession is slow. Rival Autodesk appears likely to report a similarly slow turnaround when its current fiscal quarter ends.

Figure 3 - PLM software revenue got a boost from the acquisition of IBM’s PLM Software business.
(Click image for an enlarged view.)

Figure 4 - SolidWorks got no benefit from the IBM deal. Growth slowed in dollars.
(Click image for an enlarged view.)

Figure 5 - SolidWorks cumulative commercial license sales topped 400,000 in the most recent quarter.
(Click image for an enlarged view.)
 

Figure 6 - 55 percent of Dassault Systèmes sales came from outside the euro zone.

Figure 7 - CATIA sales, aided by IBM's contribution, made up a larger share of Dassault Systèmes’ business in the quarter.