Dassault Systèmes raises its targets for 2022: operational profitability surprises favorably – 04/27/2022 at 15:03

(AOF) – Dassault Systèmes (+ 5.19% to 40.61 euros) is now among the top of the basket on the Paris market. The maker of computer-aided design and manufacturing software raised its 2022 earnings per share target after a strong start to the year. The French tech company is now targeting adjusted diluted earnings per share growth of 9% to 11%, or 1.04 to 1.06 euros, from 0.98 euros to 1 euro earlier. Adjusted operating margin is now expected to be between 33.4% and 33.7%, compared to 32.7% to 33.1% previously.

Dassault Système is still targeting adjusted sales growth of 9 to 10% at constant exchange rates, or between EUR 5.355 and 5.405 billion, and software sales growth of the same order. It also maintained its target of growing license and other software sales between 10% and 12% at constant exchange rates.

The computer-aided design and manufacturing software company can afford to be more optimistic given a better-than-expected first quarter, especially in terms of profitability.

In the first quarter, adjusted earnings per share rose 20% to 0.27 euros, 0.03 cents better than consensus. Adjusted operating margin increased 1.2 points to 35% for a sales increase of 13% (8% at constant exchange rates) to EUR 1.324 billion. The margin was expected at 32.8% and compares to a guidance of 32.3% to 33%.

“The good surprise comes mainly from the very clear improvement in profitability, although Dassault Systèmes indicates that the recruitments are in line with these objectives,” said Invest Securities.

Dassault Systèmes says it has taken all steps to suspend its operations in Russia, which will represent less than 0.5% of adjusted sales in 2021.

In parallel with this publication, the French technology company revealed its future governance. On January 9, 2023, the Chairman of the Board of Directors, Charles Edelstenne, will reach the statutory age limit for the performance of this position. The Board of Directors proposes to the General Meeting of Shareholders of 19 May to renew the expiring directorships of Charles Edelstenne, Bernard Charlès and Pascal Daloz.

If these mandates are renewed, Charles Edelstenne will be Chairman of the Board of Directors until January 9, 2023, when he will remain a director and become Honorary Chairman. Bernard Charlès then becomes CEO and Pascal Daloz Deputy CEO.

AOF – MORE INFORMATION

Most important points:

– Software publishing company founded in 1981;

– Revenue of €4.5 billion, generated 37% in Europe, 38% in America and 25% in Asia;

– Activity divided between industrial innovation for 51%, mainstream innovation for 21%, life sciences for 18% and services for 10%;

– Business model based on the 3DEXPERIENCE virtual platform of various software useful to customers in their search for sustainable innovations that harmonize product, nature and life, with 3 key sectors – manufacturing, life sciences & health and infrastructure & cities;

– Capital controlled at 40.39% (54.45% of the voting rights) by the Dassault family, 6% (8.06%) by Charles Edelstenne, chairman of the 12-member board of directors, and 1.62% ( 2.07%) by Bernard Charlès, Chief Executive Officer;

– Healthy balance sheet, with debt reduced to €2.7 billion and cash to €2.14 billion.

Challenges

– Human Industry Experience strategy aimed at strengthening leadership in manufacturing industries, infrastructures and cities, then life sciences and health: – take advantage of the 13 major brands of the group -Enovia, 3DExcite, Centric PLM for collaboration in the field of applications, SolidWorks, Catia, Geovia, Biovia for 3D modeling, 3DVia, Delmia, Simulia for simulations and Netvibes, Exalead, Medidata for information intelligence and the new 3D Experience Works for SMBs

– Offerings targeting 11 economic sectors and 12 geographical areas;

– Financial target of 13% annual growth in earnings per share between 2020 and 2024, being €6;

– Innovation strategy supported by R&D of 935 M€ with 12 technology portfolios;

– Environmental strategy “Sustainability Compass” based on the 3DEXPERIENCE Platform for Sustainability with 4 major commitments: 38% reduction of CO2 emissions per employee in 2025 (compared to 2018) – CO2 neutrality for 2050 – 2/3 of new licenses with a positive impact on the environment – federation of stakeholders;

– Visibility of the activity, the recurring software revenue that generates 8/10ths of the revenue.

Challenges

– Growth of the subsidiary 3DS Outscale, dedicated to the cloud, SecNumCloud certified for the public sector in France and strengthened by the acquisition of NuoDB;

– Spin-offs of the “virtual twins” synchronization program between real products and the data processed in virtual products.

Software publishers: multiple takeovers in healthcare

According to market research firm IDC, the healthcare industry is expected to spend more than $15 billion on software and cloud servers by 2023. After Microsoft acquires Nuance, which combines speech recognition and telemedicine, for $16 billion, it is now Oracle’s turn to acquire Cerner, the number two medical software distribution company in the United States, the largest acquisition in its history. history. The amount of this operation, carried out in cash, is 28.3 billion dollars. Cerner, which posted revenues of $5.5 billion in 2021, could allow Oracle to strengthen its positions in the cloud as the US group struggles to grow as its main rivals such as Google, Microsoft or Amazon Web services.

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