Dassault Systèmes Reports Strong Third Quarter Results With New Licenses Revenue up 54% in Constant Currencies

PARIS--(BUSINESS WIRE)--Regulatory News:

“We continued to gain important new references for our Version 6 global collaborative platform, amongst the most recent of which was Bell Helicopter’s decision to select ENOVIA V6 and expand the usage of our products to include SIMULIA, DELMIA and 3DVIA and to upgrade to CATIA V6.”

Dassault Systèmes (DS) (Paris:DSY) (Euronext Paris: #13065, DSY.PA) reports IFRS unaudited financial results for the third quarter and nine months ended September 30, 2010. These results were reviewed by the Company’s Board of Directors on October 27, 2010.

Summary Financial Highlights

• Non-IFRS revenue, operating margin and EPS ahead of DS objectives
• In constant currencies, IFRS total revenue increased 30% (38.4% as reported) and non-IFRS total revenue increased 32% (40.1% as reported)
• Non-IFRS operating margin increases 250 basis points to 28.0%
• EPS up 44% to €0.46 (IFRS) and up 48% to €0.65 (non-IFRS)
• DS increases 2010 non-IFRS financial objectives for Q3 overachievement

Third Quarter Financial Summary (unaudited)
In millions of Euros, except per share data	IFRS						Non-IFRS
			Change		Change in cc*				Change		Change in cc*
Q3 Total Revenue	403.6		38	%	30	%	408.8		40	%	32	%
Q3 Software Revenue	366.7		43	%	35	%	371.9		45	%	37	%
Q3 EPS	0.46		44	%			0.65		48	%
Q3 Operating Margin	18.8	%					28.0	%
*In constant currencies.

“Dassault Systèmes delivered a powerhouse third quarter thanks to important contributions from all of our brands and superb execution from every organizational unit in DS and among our sales partners around the globe. We were very pleased by both the level of new software sales and the growth of our recurring software revenue,” commented Bernard Charlès, Dassault Systèmes President and Chief Executive Officer. “Given the backdrop of a still fragile economic recovery, this performance demonstrates the value of our industry solutions for our customers.

“We continued to gain important new references for our Version 6 global collaborative platform, amongst the most recent of which was Bell Helicopter’s decision to select ENOVIA V6 and expand the usage of our products to include SIMULIA, DELMIA and 3DVIA and to upgrade to CATIA V6.”

DS completed the acquisition of the IBM PLM operations on March 31, 2010 and these operations were merged into the Company’s operations within its PLM business segment for the six-month period commencing April 1, 2010. Due to the deep integration of former IBM PLM employees into the Company’s operations, involving many changes in sales territories and responsibilities, it is not possible to track the IBM PLM revenue and profit since the acquisition date. As previously disclosed, the IBM PLM share of DS software revenue was estimated at approximately €45 million in the 2009 third quarter.

Third Quarter 2010 Financial Review (unaudited)
In millions of Euros	IFRS				Non-IFRS
	Q3 2010	Q3 2009	Change in cc*		Q3 2010	Q3 2009	Change in cc*
Total Revenue	403.6	291.7	30	%	408.8	291.8	32	%
Software Revenue	366.7	255.6	35	%	371.9	255.7	37	%
Services and other Revenue	36.9	36.1	(4	%)	36.9	36.1	(4	%)
PLM software Revenue	286.9	194.7	39	%	292.1	194.8	42	%
Mainstream 3D software Revenue	79.8	60.9	22	%	79.8	60.9	22	%
Americas	116.3	89.1	18	%	118.7	89.2	20	%
Europe	173.0	134.8	28	%	174.5	134.8	29	%
Asia	114.3	67.8	51	%	115.6	67.8	53	%
*In constant currencies.

• In constant currencies, IFRS total revenue increased 30% (38.4% as reported) and non-IFRS total revenue increased 32% (40.1% as reported) on software revenue growth of 35% (IFRS) and 37% (non-IFRS).
• IFRS (and non-IFRS) new license revenue increased 63.7% and 54% in constant currencies. New license revenue results benefited from a strong level of activity in both the PLM and Mainstream 3D business segments.
• IFRS recurring software revenue (comprised of periodic licenses and maintenance revenue) increased 37.4% and 29% in constant currencies. Non-IFRS recurring software revenue increased 40.0% and 32% in constant currencies. The growth in recurring software revenue reflected a further improvement in subscription revenue trends, with renewal rates back to historical levels across the Company, and with the increase in new business activity.

• IFRS and non-IFRS services and other revenue increased 2.2%, and decreased 4% in constant currencies principally reflecting the lower level of new software activity during 2009.
• IFRS PLM software revenue increased 47.4% and 39% in constant currencies. Non-IFRS PLM software revenue increased 49.9% and 42% in constant currencies, with CATIA software revenue increasing by 40%, ENOVIA by 64% and Other PLM by 31%.
• Mainstream 3D (IFRS and non-IFRS) software revenue increased 31.0% and 22% in constant currencies. New seats licensed increased 22% to 10,609 seats.
• The non-IFRS operating margin increased to 28.0% from 25.5% in the 2009 third quarter principally reflecting the strong growth in software revenue as the Company saw an increase in transaction volume.
• IFRS earnings per diluted share increased 43.8% to €0.46 compared to €0.32 in the 2009 third quarter, reflecting higher revenue growth and a decrease in the effective income tax rate to 22.4% from 31.1% in the year-ago period, partially offset by a higher level of financial expense, net. Non-IFRS earnings per diluted share increased 47.7% to €0.65 compared to €0.44 in the year-ago period, principally due to strong revenue growth and operating margin expansion.

2010 Nine Month Financial Summary (unaudited)
In millions of Euros, except per share data	IFRS			Non-IFRS
		Change	Change in cc*		Change	Change in cc*
YTD 2010 Total Revenue	1,101.1	21%	17%	1,112.7	22%	18%
YTD 2010 Software Revenue	992.8	24%	20%	1,004.4	26%	21%
YTD 2010 EPS	1.18	51%		1.67	42%
YTD 2010 Operating Margin	17.9%			26.3%
*In constant currencies.

In millions of Euros	IFRS			Non-IFRS
	YTD 2010	YTD 2009	Change in cc*	YTD 2010	YTD 2009	Change in cc*
Total Revenue	1,101.1	912.3	17%	1,112.7	913.7	18%
Software Revenue	992.8	798.7	20%	1,004.4	800.1	21%
Services and other Revenue	108.3	113.6	(8%)	108.3	113.6	(8%)
PLM software Revenue	764.1	601.9	23%	775.7	603.3	24%
Mainstream 3D software Revenue	228.7	196.8	12%	228.7	196.8	12%
Americas	324.2	283.0	10%	327.7	283.6	11%
Europe	487.6	416.6	17%	490.5	416.7	17%
Asia	289.3	212.7	24%	294.5	213.4	26%
*In constant currencies.

• In constant currencies, IFRS total revenue increased 17% (20.7% as reported) and non-IFRS total revenue increased 18% (21.8% as reported) on software revenue growth of 20% (IFRS) and 21% (non-IFRS).
• By geographic region and in constant currencies, total revenue increased in Europe by 17% (IFRS and non-IFRS), in the Americas by 10% (IFRS) and 11% (non-IFRS) and in Asia by 24% (IFRS) and 26% (non-IFRS).
• IFRS (and non-IFRS) new licenses revenue increased 33.7% and 29% in constant currencies.
• IFRS recurring software revenue, comprised of periodic licenses and maintenance revenue, increased 21.8% and 18% in constant currencies. Similarly, non-IFRS recurring software revenue increased 23.4% and 19% in constant currencies.
• IFRS PLM software revenue increased 26.9% and 23% in constant currencies and non-IFRS PLM software revenue increased 28.6% and 24% in constant currencies.
• Mainstream 3D (IFRS and non-IFRS) software revenue increased 16.2% and 12% in constant currencies. New SolidWorks commercial seats licensed increased 17% to 30,222 seats.
• IFRS and non-IFRS services and other revenue decreased 4.7% and 8% in constant currencies, reflecting the impact from the lower level of new software activity during 2009.
• IFRS diluted net income per share increased 51.3% principally reflecting an increase in operating income of 41.6% and in part a decrease in the effective tax rate to 27.3% from 30.8% in the 2009 period. Non-IFRS net income per diluted share increased 41.5% to €1.67 per share from €1.18 per share, principally reflecting an increase in non-IFRS operating income of 44.4% offset in part by an increase in the non-IFRS effective tax to 31.0% from 29.4% in the year-ago period.

Cash Flow and Other Financial Highlights

IFRS net operating cash flow was €51.1 million for the 2010 third quarter, compared to €56.6 million in the year-ago period, principally reflecting higher net income, offset by higher working capital requirements. IFRS net operating cash flow was €316.7 million for the 2010 nine-month period, increasing substantially from €233.9 million for the similar period in 2009 on higher net income and an improvement in working capital as well as an increase in other non-cash items.

The Company’s net cash position, representing cash and short-term investments of €999.3 million, net of debt (current and long-term) of €327.6 million, was €671.7 million at September 30, 2010, compared to a net financial position of €858.0 million at December 31, 2009. For the 2010 nine-month period, the Company’s principal uses of cash included cash acquisitions totaling €465.7 million and cash dividends of €54.5 million.

Key Business and Corporate Highlights

EADS and Dassault Systèmes to Reach a New level of Cooperation to Accelerate Introduction of PLM 2.0. In a separate press release issued today, DS and EADS announced enhanced cooperation with EADS in the PLM domain, supporting the recent EADS initiative called Phenix PLM Harmonization Center (PHC).

Dassault Systèmes will hold its US Customer Conference 2010 on November 9-10, in Orlando, Florida. Speakers from Ford, Procter & Gamble (P&G) and GE will be among the customers presenting at the 2010 Dassault Systèmes Customer Conference (DSCC), taking place November 9-10. This year’s conference, which brings together the company’s CATIA, DELMIA, ENOVIA, SIMULIA and 3DVIA customers, partners and technology leaders in one setting, will follow the theme, “Dream to Life: Envision & Invent the Future.”

AgustaWestland Chooses V6 for Production and Supplier Collaboration Excellence. AgustaWestland, a Finmeccanica Company, and worldwide leader in the design and construction of rotary wing aircraft, has chosen ENOVIA V6 and DELMIA V6 PLM solutions to support its product development activities. Dassault Systèmes’ V6 was chosen after a thorough comparative analysis of competing PLM technologies in the aerospace and defense industry. With ENOVIA V6 and DELMIA V6, AgustaWestland will benefit from the online environment to harmonize the activities of their various production facilities and as a future system for integrated product development.

Tesla Motors Selects Dassault Systèmes’ V6 PLM Solution. Tesla is beginning its upgrade to V6 with implementation of the ENOVIA V6 collaboration solution. Improvements and predefined templates in the latest ENOVIA release have enabled a successful pilot of the core solutions in just over a month, paving the way for a successful production implementation. Phase two of the implementation will involve the launch of the DELMIA digital manufacturing solution in late 2010. Future phases will migrate Tesla’s product authoring solution from CATIA V5 to CATIA V6. Additionally, Tesla is using the CATIA ICEM solution for Class A surfacing, DELMIA Human for occupant ergonomics, plus solutions from Dassault Systèmes software partners.

Scania Improves Its Product Development With Support From Dassault Systèmes’ PLM Solutions. Scania, one of the world’s leading manufacturers of trucks and buses, has integrated production design, product development, processes and manufacturing using Dassault Systèmes PLM solutions. Scania creates full scale 3D models with Dassault Systèmes’ CATIA and ENOVIA, encompassing everything from design evaluation and virtual manufacturing to marketing material.

Astronauts Stay Strong with Help from SolidWorks Software. Though phenomenally fit, astronauts grow weak after prolonged missions in zero gravity. To help combat muscle atrophy, NTE-SENER, a Spanish company, using SolidWorks software, has developed a sophisticated system to test their strength in space. Called MARES, the Muscle Atrophy Research and Exercise System was developed by NTE-SENER for the European Space Agency (ESA). It was launched last April aboard the NASA Discovery Space Shuttle and will be installed in the European Columbus Module of the International Space Station.

SolidWorks 2011 Helps Turn Good Ideas into Great Results. During the third quarter, SolidWorks 2011 product line was introduced delivering new ways to speed product design, deepen collaboration, and strengthen designers’ engagement with manufacturing.

Dassault Systèmes Forming Americas Campus in Greater Boston. DS has signed a long term lease for office, technology lab and data center space in Waltham, MA. This new campus will enable DS to consolidate its businesses and employees into a single, world-class state of the art Americas headquarters reflecting the vision of the Company while allowing DS to optimize its operational effectiveness and efficiency as it executes its growth plans.

Other Corporate Information

On August 2, 2010, Dassault Systèmes filed its 2010 Half Year financial report with the French “Autorité des marchés financiers”. The 2010 Half Year financial report and an English language translation of this document are available on the Company’s website.

On October 27, 2010, Dassault Systèmes Board of Directors decided to convene an Extraordinary Shareholders Meeting on December 15, 2010 in order to amend some articles of the Company By-laws.

Business Outlook

Thibault de Tersant, Senior Executive Vice President and CFO, commented, “DS delivered a strong third quarter, with total revenue, operating margin and earnings per share coming in ahead of our expectations. Both new licenses revenue and recurring software revenue contributed to the strength of the software results, growing, respectively, 54% and 32% in constant currencies. We benefited from strong growth in all geographic regions, an important level of contribution from our industry diversification and a good dynamic in our core industries.

“Turning to our financial objectives for the fourth quarter and year, first, we are reconfirming and leaving unchanged our fourth quarter objectives which had already incorporated our assumption of an acceleration of revenue growth during the second half of 2010. Secondly, we are increasing our 2010 financial objectives to reflect the full third quarter revenue over-performance of €25 million in constant currencies. Therefore, with respect to our 2010 financial objectives, we are raising our revenue growth target range by two points to 18% to 19% in constant currencies, increasing our operating margin target range an additional 100 basis points to 27% to 28% and raising our earnings per share growth objective about five points to 26% to 32% growth.”

The Company’s current objectives are the following:

• Fourth quarter 2010 non-IFRS total revenue objective of about €412 to €427 million, non-IFRS operating margin of about 29% to 32% and non-IFRS EPS of about €0.68 to €0.78;
• 2010 non-IFRS revenue growth objective range of about 18% to 19% in constant currencies; (€1.525 to €1.540 billion based upon the 2010 currency exchange rate assumptions below from €1.495 to €1.515 billion previously);
• 2010 non-IFRS operating margin of about 27% to 28%, from 26% to 27% previously;
• 2010 non-IFRS EPS range of about €2.35 to €2.45, representing growth of about 26% to 32%; (previous range €2.25 to €2.35, 21% to 26% growth)
• Objectives are based upon exchange rate assumptions for the 2010 fourth quarter of US$1.45 per €1.00 and JPY125 per €1.00 and a full year average of US$1.35 (unchanged) per €1.00 and JPY120 (JPY125 previously) per €1.00.

The Company’s objectives are prepared and communicated only on a non-IFRS basis and are subject to the cautionary statement set forth below.

The non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2010 currency exchange rates above: deferred revenue write-downs estimated at approximately €17 million for 2010; share-based compensation expense estimated at approximately €21 million for 2010 and amortization of acquired intangibles estimated at approximately €70 million for 2010. The above objectives do not include any impact from other operating income and expense, net principally comprised of, acquisition, integration and restructuring expenses. These estimates do not include any new stock option or share grants, or any new acquisitions or restructurings completed after October 28, 2010.

Webcast and Conference Call Information

Dassault Systèmes will host a webcast and a conference call today, Thursday, October 28, 2010. Management will host a webcast at 8:30 AM London time/9:30 AM Paris time and will then host the conference call at 9:00 AM New York time/2:00 PM London time/3:00 PM Paris time. The webcast and conference call will be available via the Internet by accessing http://www.3ds.com/company/finance/. Please go to the website at least fifteen minutes prior to the webcast or conference call to register, download and install any necessary audio software. The webcast and conference call will be archived for 30 days.

Additional investor information can be accessed at http://www.3ds.com/company/finance/ or by calling Dassault Systèmes’ Investor Relations at 33.1.61.62.69.24.

Forward-looking Information

Statements herein that are not historical facts but express expectations or objectives for the future, including but not limited to statements regarding the Company’s non-IFRS financial performance objectives, are forward-looking statements.

Such forward-looking statements are based on DS management's current views and assumptions and involve known and unknown risks and uncertainties. Actual results or performances may differ materially from those in such statements due to a range of factors. The Company’s current outlook for 2010 assumes, among other things, that the economic recovery will be slow, but if global economic and business conditions improve more slowly than anticipated, or remain stable or further deteriorate, the Company’s business results may not develop as currently anticipated and may remain below their earlier levels for an extended period of time. Further the Company has assumed that its increased responsibility for its direct PLM sales, in particular resulting from the integration of the IBM PLM acquisition which was completed on March 31, 2010, and the resulting commercial and management challenges, will not cause it to incur substantial unanticipated costs and inefficiencies. Moreover, in preparing such forward-looking statements, the Company has in particular assumed an average U.S. dollar to euro exchange rate of US$1.35 per €1.00 and an average Japanese yen to euro exchange rate of JPY120 to €1.00 for 2010; however, currency values fluctuate, and the Company’s results of operations may be significantly affected by changes in exchange rates. The Company’s actual results or performance may also be materially negatively affected by the current global economic context, difficulties or adverse changes affecting its partners or its relationships with its partners, including the evolution of its longstanding strategic relationship with IBM, changes in exchange rates, new product developments, and technological changes; errors or defects in its products; growth in market share by its competitors; and the realization of any risks related to the integration of IBM PLM within DS and of any newly acquired company and internal reorganizations. Unfavorable changes in any of the above or other factors described in the Company’s regulatory reports, including the Document de référence, and the 2010 Half Year Report as filed with the French “Autorité des marchés financiers” (AMF) on April 1, 2010, and August 2, 2010, respectively, could materially affect the Company’s financial position or results of operations.

Non-IFRS Financial Information

Readers are cautioned that the supplemental non-IFRS (previously referred to as “adjusted IFRS”) information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRS measurements. Also, the Company’s supplemental non-IFRS financial information may not be comparable to similarly titled non-IFRS measures used by other companies. Further specific limitations for individual non-IFRS measures, and the reasons for presenting non-IFRS financial information, are set forth in the Company’s annual report for the year ended December 31, 2009 included in the Company’s 2009 Document de référence and 2010 First Half Report filed with the AMF on April 1, 2010 and August 2, 2010, respectively.

In the tables accompanying this press release the Company sets forth its supplemental non-IFRS figures for revenue, operating income, operating margin, net income and diluted earnings per share, which exclude the effect of adjusting the carrying value of acquired companies’ deferred revenue, stock-based compensation expense, the expenses for the amortization of acquired intangible assets and other income and expense, net (in each case, as explained respectively in the Company’s 2009 Document de référence filed with the AMF on April 1, 2010 and 2010 First Half Report) and the income tax effect of the non-IFRS adjustments and certain one-time tax effects. The tables also set forth the most comparable IFRS financial measure and reconciliations of this information with non-IFRS information.

Information in Constant Currencies

When the Company believes it would be helpful for understanding trends in its business, the Company provides percentage increases or decreases in its revenue (in both IFRS as well as non-IFRS) to eliminate the effect of changes in currency values, particularly the U.S. dollar and the Japanese yen, relative to the euro. When trend information is expressed herein "in constant currencies", the results of the "current" period have first been recalculated using the average exchange rates of the comparable period in the preceding year, and then compared with the results of the comparable period in the preceding year.

This press release constitutes the quarterly financial information required by article L.451-1-2 IV of the French Monetary and Financial Code (Code Monétaire et Financier).

About Dassault Systèmes

As a world leader in 3D and Product Lifecycle Management (PLM) solutions, Dassault Systèmes brings value to more than 115,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systèmes develops and markets PLM application software and services that support industrial processes and provide a 3D vision of the entire lifecycle of products from conception to maintenance to recycling. The Dassault Systèmes portfolio consists of CATIA for virtual product design - SolidWorks 3D for Professionals - DELMIA for virtual production - SIMULIA for realistic simulation - ENOVIA for global collaborative lifecycle management, and 3DVIA for online 3D lifelike experiences. Dassault Systèmes’ shares are listed on Euronext Paris (#13065, DSY.PA) and Dassault Systèmes’ ADRs may be traded on the US Over-The-Counter (OTC) market (DASTY). For more information, visit http://www.3ds.com

CATIA, DELMIA, ENOVIA, SIMULIA, SolidWorks and 3DVIA are registered trademarks of Dassault Systèmes or its subsidiaries in the US and/or other countries.

(Tables to follow)

TABLE OF CONTENTS

Non-IFRS key figures

Condensed consolidated statements of income

Condensed consolidated balance sheets

Condensed consolidated cash flow statements

IFRS – non-IFRS reconciliation

DASSAULT SYSTEMES

NON-IFRS KEY FIGURES

(unaudited; in millions of Euros, except per share data, headcount and exchange rates)

Non-IFRS key figures exclude the effects of adjusting the carrying value of acquired companies’ deferred revenue, stock-based compensation expense, amortization of acquired intangible assets, and other operating income and expense, net.

Comparable IFRS financial information and a reconciliation of the IFRS and non-IFRS measures are set forth in the separate tables within this Attachment.

	Three months ended								Nine months ended
	September 30, 2010		September 30, 2009		Change		Change in cc*		September 30, 2010		September 30, 2009		Change		Change in cc*
Non-IFRS Revenue	€ 408.8		€ 291.8		40	%	32	%	€ 1,112.7		€ 913.7		22	%	18	%
Non-IFRS Revenue breakdown by activity
Software revenue	371.9		255.7		45	%	37	%	1,004.4		800.1		26	%	21	%
of which new licenses revenue	96.6		59.0		64	%	54	%	258.1		193.0		34	%	29	%
of which periodic licenses, maintenance and product development revenue	275.3		196.7		40	%	32	%	746.3		607.1		23	%	19	%
Services and other revenue	36.9		36.1		2	%	(4	%)	108.3		113.6		(5	%)	(8	%)
Recurring software revenue	274.9		196.4		40	%	32	%	745.6		604.2		23	%	19	%
Non-IFRS software revenue breakdown by product line
PLM software revenue	292.1		194.8		50	%	42	%	775.7		603.3		29	%	24	%
of which CATIA software revenue	175.7		118.8		48	%	40	%	464.5		353.2		32	%	27	%
of which ENOVIA software revenue	52.6		30.0		75	%	64	%	137.3		104.2		32	%	27	%
Mainstream 3D software revenue	79.8		60.9		31	%	22	%	228.7		196.8		16	%	12	%
Non-IFRS Revenue breakdown by geography
Americas	118.7		89.2		33	%	20	%	327.7		283.6		16	%	11	%
Europe	174.5		134.8		29	%	29	%	490.5		416.7		18	%	17	%
Asia	115.6		67.8		71	%	53	%	294.5		213.4		38	%	26	%
Non-IFRS operating income	€ 114.5		€ 74.5		54	%			€ 293.1		€ 203.0		44	%
Non-IFRS operating margin	28.0	%	25.5	%					26.3	%	22.2	%
Non-IFRS net income	79.3		52.2		52	%			200.8		139.5		44	%
Non-IFRS diluted net income per share	€ 0.65		€ 0.44		48	%			€ 1.67		€ 1.18		42	%
Closing headcount	8,892		7,812		14	%			8,892		7,812		14	%
Average Rate USD per Euro	1.29		1.43		(10	%)			1.31		1.37		(4	%)
Average Rate JPY per Euro	110.7		133.8		(17	%)			117.7		129.5		(9	%)

DASSAULT SYSTEMES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (IFRS) (unaudited; in millions of Euros, except per share data)
	Three months ended				Nine months ended
	September 30,		September 30,		September 30,		September 30,
	2010		2009		2010		2009
New licenses revenue	96.6		59.0		258.1		193.0
Periodic licenses, maintenance and product development revenue	270.1		196.6		734.7		605.7
Software revenue	366.7		255.6		992.8		798.7
Services and other revenue	36.9		36.1		108.3		113.6
Total Revenue	€ 403.6		€ 291.7		€ 1,101.1		€ 912.3
Cost of software revenue (excluding amortization of acquired intangibles)	(19.6	)	(12.7	)	(55.4	)	(40.8	)
Cost of services and other revenue	(36.2	)	(32.3	)	(106.3	)	(105.8	)
Research and development	(83.8	)	(73.3	)	(244.4	)	(235.7	)
Marketing and sales	(128.5	)	(81.7	)	(342.1	)	(267.1	)
General and administrative	(31.5	)	(22.9	)	(88.4	)	(79.7	)
Amortization of acquired intangibles	(20.9	)	(9.6	)	(48.3	)	(32.2	)
Other operating income and expense, net	(7.3	)	(2.5	)	(18.9	)	(11.7	)
Total Operating Expenses	(€ 327.8)		(€ 235.0)		(€ 903.8)		(€ 773.0)
Operating Income	€ 75.8		€ 56.7		€ 197.3		€ 139.3
Financial revenue and other, net	(4.4	)	(0.8	)	(2.0	)	(5.0	)
Income before income taxes	71.4		55.9		195.3		134.3
Income tax expense	(16.0	)	(17.4	)	(53.4	)	(41.3	)
Net Income	55.4		38.5		141.9		93.0
Minority interest	0.0		(0.1	)	(0.1	)	(0.2	)
Net Income attributable to equity holders of the parent	€ 55.4		€ 38.4		€ 141.8		€ 92.8
Basic net income per share	0.47		0.33		1.20		0.79
Diluted net income per share	€ 0.46		€ 0.32		€ 1.18		€ 0.78
Basic weighted average shares outstanding (in millions)	119.1		117.6		118.6		117.5
Diluted weighted average shares outstanding (in millions)	121.5		118.6		120.0		118.3
IFRS revenue variation as reported and in constant currencies
	Three months ended September 30, 2010				Nine months ended September 30, 2010
	Change*		Change in cc**		Change*		Change in cc**
IFRS Revenue	38	%	30	%	21	%	17	%
IFRS Revenue by activity
Software Revenue	43	%	35	%	24	%	20	%
Services and other Revenue	2	%	(4	%)	(5	%)	(8	%)
IFRS Software Revenue by product line
PLM software revenue	47	%	39	%	27	%	23	%
of which CATIA software revenue	45	%	37	%	29	%	25	%
of which ENOVIA software revenue	72	%	60	%	30	%	25	%
Mainstream 3D software revenue	31	%	22	%	16	%	12	%
IFRS Revenue by geography
Americas	31	%	18	%	15	%	10	%
Europe	28	%	28	%	17	%	17	%
Asia	69	%	51	%	36	%	24	%
* Variation compared to the same period in the prior year. ** In constant currencies.

DASSAULT SYSTEMES CONDENSED CONSOLIDATED BALANCE SHEETS (IFRS) (unaudited; in millions of Euros)
	September 30,	December 31,
	2010	2009
ASSETS
Cash and cash equivalents	920.6	939.1
Short-term investments	78.7	118.9
Accounts receivable, net	323.5	322.3
Other current assets	119.2	121.4
Total current assets	1,442.0	1,501.7
Property and equipment, net	65.8	59.6
Goodwill and Intangible assets, net	1,234.6	660.8
Other non current assets	144.3	77.6
Total Assets	€ 2,886.7	€ 2,299.7
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable	76.3	67.7
Unearned revenues	365.4	243.7
Other current liabilities	282.3	174.3
Total current liabilities	724.0	485.7
Long-term debt	302.1	200.1
Other non current obligations	238.1	165.1
Total long-term liabilities	540.2	365.2
Minority interests	1.0	1.1
Parent shareholders' equity	1,621.5	1,447.7
Total Liabilities and Shareholders' equity	€ 2,886.7	€ 2,299.7

DASSAULT SYSTEMES CONDENSED CONSOLIDATED CASH FLOW STATEMENTS (IFRS) (unaudited; in millions of Euros)
	Three months ended						Nine months ended
	September 30, 2010		September 30, 2009		Change		September 30, 2010		September 30, 2009		Change
Net Income attributable to equity holders of the parent	55.4		38.4		17.0		141.8		92.8		49.0
Minority interest	0.0		0.1		(0.1	)	0.1		0.2		(0.1	)
Net Income	55.4		38.5		16.9		141.9		93.0		48.9
Depreciation of property & equipment	5.9		5.5		0.4		17.3		17.0		0.3
Amortization of intangible assets	22.0		10.9		11.1		51.4		35.5		15.9
Other non cash P&L Items	13.7		3.4		10.3		15.6		6.1		9.5
Changes in working capital	(45.9	)	(1.7	)	(44.2	)	90.5		82.3		8.2
Net Cash provided by operating activities	51.1		56.6		(5.5	)	316.7		233.9		82.8
Acquisition of assets and equity, net (1)	(9.5	)	(1.6	)	(7.9	)	(494.4	)	(18.4	)	(476.0	)
Sale of fixed assets	0.3		0.0		0.3		1.0		0.5		0.5
Sale (purchase) of short term investments, net	(0.7	)	(56.7	)	56.0		41.6		(98.8	)	140.4
Loans and others	(1.4	)	0.3		(1.7	)	(1.3	)	0.3		(1.6	)
Net Cash provided by (used in) investing activities	(11.3	)	(58.0	)	46.7		(453.1	)	(116.4	)	(336.7	)
Proceeds (Repayments) of short-term and long-term debt	0.0		(0.1	)	0.1		115.0		(0.1	)	115.1
Share repurchase	(5.7	)	0.0		(5.7	)	(7.2	)	0.0		(7.2	)
Exercise of DS stock option	15.0		1.5		13.5		39.8		2.0		37.8
Cash dividend paid	0.0		0.0		0.0		(54.5	)	(54.8	)	0.3
Net Cash provided by (used in) financing activities	9.3		1.4		7.9		93.1		(52.9	)	146.0
Effect of exchange rate changes on cash and cash equivalents	(67.8	)	(13.7	)	(54.1	)	24.8		(27.2	)	52.0
Increase in cash and cash equivalents	(18.7	)	(13.7	)	(5.0	)	(18.5	)	37.4		(55.9	)
Cash and cash equivalents at beginning of period	939.3		845.2				939.1		794.1
Cash and cash equivalents at end of period	920.6		831.5				920.6		831.5
(1) The acquisition of the IBM PLM operations is presented net of payments received from IBM in connection with the settlement of royalties due as of March 31, 2010. As a result, reported cash flows from operations are lower in the periods presented above (and for the remainder of 2010) than they would have been had this transaction not occurred.

DASSAULT SYSTEMES

SUPPLEMENTAL NON-IFRS FINANCIAL INFORMATION
IFRS – NON-IFRS RECONCILIATION
(unaudited; in millions of Euros, except per share data)

Readers are cautioned that the supplemental non-IFRS information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRS measurements. Also, the Company’s supplemental non-IFRS financial information may not be comparable to similarly titled non-IFRS measures used by other companies. Further specific limitations for individual non-IFRS measures, and the reasons for presenting non-IFRS financial information, are set forth in the Company’s Document de référence for the year ended December 31, 2009 and 2010 Half Year report filed with the AMF on April 1, 2010, and August 2, 2010, respectively. To compensate for these limitations, the supplemental non-IFRS financial information should be read not in isolation, but only in conjunction with the Company’s consolidated financial statements prepared in accordance with IFRS.

In millions of Euros, except per share data and percentages	Three months ended September 30,						Change
	2010	Adjustment	2010	2009	Adjustment	2009	IFRS	Non-IFRS
	IFRS	(1)	non-IFRS	IFRS	(1)	non-IFRS		(2)
Total Revenue	€ 403.6	5.2	€ 408.8	€ 291.7	0.1	€ 291.8	38%	40%
Total Revenue breakdown by activity
Software revenue	366.7	5.2	371.9	255.6	0.1	255.7	43%	45%
New Licenses	96.6			59.0			64%
Product Development	0.4			0.3
Periodic Licenses and Maintenance	269.7	5.2	274.9	196.3	0.1	196.4	37%	40%
Recurring portion of Software revenue	74%		74%	77%		77%
Services and other revenue	36.9			36.1			2%
Total Software Revenue breakdown by product line
PLM software revenue	286.9	5.2	292.1	194.7	0.1	194.8	47%	50%
of which CATIA software revenue	171.7	4.0	175.7	118.8			45%	48%
of which ENOVIA software revenue	51.6	1.0	52.6	30.0			72%	75%
Mainstream 3D software revenue	79.8			60.9			31%
Total Revenue breakdown by geography
Americas	116.3	2.4	118.7	89.1	0.1	89.2	31%	33%
Europe	173.0	1.5	174.5	134.8	0.0	134.8	28%	29%
Asia	114.3	1.3	115.6	67.8	0.0	67.8	69%	71%
Total Operating Expenses	(€ 327.8)	33.5	(€ 294.3)	(€ 235.0)	17.7	(€ 217.3)	39%	35%
Stock-based compensation expense	(5.3)	5.3	-	(5.6)	5.6	-	-	-
Amortization of acquired intangibles	(20.9)	20.9	-	(9.6)	9.6	-	-	-
Other operating income and expense, net	(7.3)	7.3	-	(2.5)	2.5	-	-	-
Operating Income	€ 75.8	38.7	€ 114.5	€ 56.7	17.8	€ 74.5	34%	54%
Operating Margin	18.8%		28.0%	19.4%		25.5%
Income before Income Taxes	71.4	38.7	110.1	55.9	17.8	73.7	28%	49%
Income tax expense	(16.0)	(14.8)	(30.8)	(17.4)	(4.0)	(21.4)	-	-
Income tax adjustments	(14.8)	14.8	-	(4.0)	4.0	-	-	-
Minority interest	0.0			(0.1)			-
Net Income attributable to shareholders	€ 55.4	23.9	€ 79.3	€ 38.4	13.8	€ 52.2	44%	52%
Diluted Net Income Per Share (3)	€ 0.46	0.19	€ 0.65	€ 0.32	0.12	€ 0.44	44%	48%
(1) In the reconciliation schedule above, (i) all adjustments to IFRS revenue data reflect the exclusion of the deferred revenue adjustment of acquired companies; (ii) adjustments to IFRS operating expenses data reflect the exclusion of the amortization of acquired intangibles, share-based compensation expense, and other operating income and expense, and (iii) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted net income per share, the income tax effect of the non-IFRS adjustments.
	Three months ended September 30,
In millions of Euros	2010 IFRS	Adjustment	2010	2009 IFRS	Adjustment	2009
			non-IFRS			non-IFRS
Cost of services and other revenue	(36.2)	0.2	(36.0)	(32.3)	0.1	(32.2)
Research and development	(83.8)	3.0	(80.8)	(73.3)	3.2	(70.1)
Marketing and sales	(128.5)	1.1	(127.4)	(81.7)	1.0	(80.7)
General and administrative	(31.5)	1.0	(30.5)	(22.9)	1.3	(21.6)
Total stock-based compensation expense		5.3			5.6
(2) The non-IFRS percentage increase (decrease) compares non-IFRS measures for the two different periods. In the event there is non-IFRS adjustment to the relevant measure for only one of the periods under comparison, the non-IFRS increase (decrease) compares the non-IFRS measure to the relevant IFRS measure. (3) Based on a weighted average 121.5 million diluted shares for Q3 2010 and 118.6 million diluted shares for Q3 2009.

DASSAULT SYSTEMES

SUPPLEMENTAL NON-IFRS FINANCIAL INFORMATION
IFRS – NON-IFRS RECONCILIATION
(unaudited; in millions of Euros, except per share data)

Readers are cautioned that the supplemental non-IFRS information presented in this press release is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or principles and should not be considered as a substitute for IFRS measurements. Also, the Company’s supplemental non-IFRS financial information may not be comparable to similarly titled non-IFRS measures used by other companies. Further specific limitations for individual non-IFRS measures, and the reasons for presenting non-IFRS financial information, are set forth in the Company’s Document de référence for the year ended December 31, 2009 and 2010 First Half report filed with the AMF on April 1, 2010, and August 2, 2010, respectively. To compensate for these limitations, the supplemental non-IFRS financial information should be read not in isolation, but only in conjunction with the Company’s consolidated financial statements prepared in accordance with IFRS.

In millions of Euros, except per share data and percentages	Nine months ended September 30,						Change
	2010	Adjustment	2010	2009	Adjustment	2009	IFRS	Non-IFRS
	IFRS	(1)	non-IFRS	IFRS	(1)	non-IFRS		(2)
Total Revenue	€ 1,101.1	11.6	€ 1,112.7	€ 912.3	1.4	€ 913.7	21%	22%
Total Revenue breakdown by activity
Software revenue	992.8	11.6	1,004.4	798.7	1.4	800.1	24%	26%
New Licenses	258.1			193.0			34%
Product Development	0.7			2.9
Periodic Licenses and Maintenance	734.0	11.6	745.6	602.8	1.4	604.2	22%	23%
Recurring portion of Software revenue	74%		74%	75%		76%
Services and other revenue	108.3			113.6			(5%)
Total Software Revenue breakdown by product line
PLM software revenue	764.1	11.6	775.7	601.9	1.4	603.3	27%	29%
of which CATIA software revenue	455.1	9.4	464.5	353.2			29%	32%
of which ENOVIA software revenue	135.4	1.9	137.3	104.2			30%	32%
Mainstream 3D software revenue	228.7			196.8			16%
Total Revenue breakdown by geography
Americas	324.2	3.5	327.7	283.0	0.6	283.6	15%	16%
Europe	487.6	2.9	490.5	416.6	0.1	416.7	17%	18%
Asia	289.3	5.2	294.5	212.7	0.7	213.4	36%	38%
Total Operating Expenses	(€ 903.8)	84.2	(€ 819.6)	(€ 773.0)	62.3	(€ 710.7)	17%	15%
Stock-based compensation expense	(17.0)	17.0	-	(18.4)	18.4	-	-	-
Amortization of acquired intangibles	(48.3)	48.3	-	(32.2)	32.2	-	-	-
Other operating income and expense, net	(18.9)	18.9	-	(11.7)	11.7	-	-	-
Operating Income	€ 197.3	95.8	€ 293.1	€ 139.3	63.7	€ 203.0	42%	44%
Operating Margin	17.9%		26.3%	15.3%		22.2%
Income before Income Taxes	195.3	95.8	291.1	134.3	63.7	198.0	45%	47%
Income tax expense	(53.4)	(36.8)	(90.2)	(41.3)	(17.0)	(58.3)	-	-
Income tax adjustments	(36.8)	36.8	-	(17.0)	17.0	-	-	-
Minority interest	(0.1)			(0.2)			-
Net Income attributable to shareholders	€ 141.8	59.0	€ 200.8	€ 92.8	46.7	€ 139.5	53%	44%
Diluted Net Income Per Share (3)	€ 1.18	0.49	€ 1.67	€ 0.78	0.40	€ 1.18	51%	42%
(1) In the reconciliation schedule above, (i) all adjustments to IFRS revenue data reflect the exclusion of the deferred revenue adjustment of acquired companies; (ii) adjustments to IFRS operating expenses data reflect the exclusion of the amortization of acquired intangibles, share-based compensation expense, and other operating income and expense, and (iii) all adjustments to IFRS income data reflect the combined effect of these adjustments, plus with respect to net income and diluted net income per share, the income tax effect of the non-IFRS adjustments.
	Nine months ended September 30,
In millions of Euros	2010 IFRS	Adjustment	2010	2009 IFRS	Adjustment	2009
			non-IFRS			non-IFRS
Cost of services and other revenue	(106.3)	0.6	(105.7)	(105.8)	0.4	(105.4)
Research and development	(244.4)	9.8	(234.6)	(235.7)	10.6	(225.1)
Marketing and sales	(342.1)	3.5	(338.6)	(267.1)	3.5	(263.6)
General and administrative	(88.4)	3.1	(85.3)	(79.7)	3.9	(75.8)
Total stock-based compensation expense		17.0			18.4
(2) The non-IFRS percentage increase (decrease) compares non-IFRS measures for the two different periods. In the event there is a non-IFRS adjustment to the relevant measure for only one of the periods under comparison, the non-IFRS increase (decrease) compares the non-IFRS measure to the relevant IFRS measure. (3) Based on a weighted average 120.0 million diluted shares for YTD 2010 and 118.3 million diluted shares for YTD 2009.