THE FUTURE
THROUGH THE EYES
OF EXPERIENCE
2014
ANNUAL REPORT
CONTENTS
1
2
3
4
PERSON RESPONSIBLE
PRESENTATION OF THE GROUP
1.1 Key Figures
1.2 History
1.3 Group Organization
1.4 Business Activities
1.5 Research and Development
1.6 Risk factors
SOCIAL, SOCIETAL AND
ENVIRONMENTAL RESPONSIBILITY
2.1 Social and Societal Responsibility
2.2 Environmental Responsibility
3
5
6
7
12
14
26
27
37
38
57
2.3
Independent Verifi er’s Attestation and Assurance
Report on Social, Societal and Environmental Information 66
FINANCIAL REVIEW AND PROSPECTS 69
3.1 Operating and Financial Review
3.2 2015 Financial Objectives and Multi-Year Growth Plan
3.3
Interim and Other Financial Information
FINANCIAL STATEMENTS
4.1 Consolidated Financial Statements
4.2 Parent Company Financial Statements
4.3 Legal and Arbitration Proceedings
70
81
82
83
84
123
149
5
6
7
CORPORATE GOVERNANCE
151
5.1 Report of the Chairman on Corporate Governance
and Internal Control
5.2 Report of the Statutory Auditors on Corporate
Governance and Internal Control
5.3 Summary of the Compensation and Benefi ts Due
to Directors
5.4 Transactions in the Company’s Shares
by the Management of the Company
5.5 Statutory Auditors
INFORMATION ABOUT
DASSAULT SYSTÈMES SA, THE SHARE
CAPITAL AND THE OWNERSHIP
STRUCTURE
6.1. Information about Dassault Systèmes SA
6.2
Information about the Share Capital
6.3
Information about the Shareholders
6.4 Stock Market Information
GENERAL MEETING
OF SHAREHOLDERS
7.1 Presentation of the Resolutions Proposed
by the Board of Directors to the General Meeting
of Shareholders on May 28, 2015
7.2 Draft Resolutions Proposed by the Board
of Directors to the General Meeting of Shareholders
on May 28, 2015
152
171
172
181
186
187
188
192
196
200
201
202
208
CROSS-REFERENCE TABLES
220
ANNUAL REPORT 2014
ANNUAL FINANCIAL REPORT
This document is an English-language translation of Dassault Systèmes’ Document de référence (Annual Report), which was filed with
the AMF (French Financial Markets Authority) on March 24 , 2015, in accordance with Articles 212-13 of the AMF General Regulation.
Only the French version of the Document de référence is legally binding.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 1
GENERAL
This Annual Report also includes:
(cid:125) the annual financial report to be prepared and published by
every listed company within four months of the end of its
fiscal year, pursuant to Article L. 451-1-2 of the Monetary
and Financial Code and Article 222-3 of the French Financial
Markets Authority (“AMF”) General Regulation; and
(cid:125) the annual management report of Dassault Systèmes SA’s
Board of Directors, which must be provided to the
General Meeting of Shareholders approving the financial
statements for each completed fiscal year, pursuant to
Articles L. 225-100 et seq. of the French Commercial Code.
The index set forth on page 220 provides cross-references to
the relevant portions of these two reports.
All references to “euro” or to the symbol “€” refer to the legal
currency of the French Republic and certain countries of the
European Union. All references to the “U.S. dollar” or to the
symbol “$” refer to the legal currency of the United States.
As used herein, “Dassault Systèmes”, the “Company” or the
“Group” refers to Dassault Systèmes SA and all the companies
included in the scope of consolidation.
“Dassault Systèmes SA” refers only to the French parent
company of the Group.
In compliance with Article 28 of European Regulation no. 809/2004
of the Commission, the following information is incorporated
by reference in this Annual Report:
(cid:125) the consolidated financial statements on pages 66
to 100 (inclusive), the parent company financial statements
on pages 102 to 122 (inclusive), and the related audit
reports on pages 101, 124 to 127 (inclusive) of the Annual
Report (Document de référence) for the year 2013 filed
with the AMF on March 28, 2014, under no. D. 14-0227;
(cid:125) the financial information on pages 56 to 65 (inclusive)
of the Annual Report (Document de référence) for the
year 2013 filed with the AMF on March 28, 2014, under
no. D. 14-0227;
(cid:125) the consolidated financial statements on pages 74 to 109
(inclusive), the parent company financial statements on
pages 111 to 134 (inclusive), and the related audit reports
on pages 109 to 110, 136 to 140 (inclusive) of the Annual
Report (Document de référence) for the year 2012 filed
with the AMF on April 3, 2013, under no. D. 13-0272;
(cid:125) the financial information on pages 60 to 73 (inclusive) of the
Annual Report (Document de référence) for the year 2012
filed with the AMF on April 3, 2013, under no. D. 13-0272.
The portions of these documents which are not incorporated
herein are either not relevant for current investors, or are
covered in another section of this Annual Report.
2 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
PERSON RESPONSIBLE
Person Responsible for the Annual Report
Bernard Charlès – President and Chief Executive Officer.
Certification by the Person Responsible
for the Annual Report
Vélizy-Villacoublay, March 24 , 2015.
“I hereby certify, after having taken all reasonable measures
for this purpose, that the information contained in this Annual
Report (Document de référence) is, to my knowledge, in
accordance with the facts and that no information liable to
affect its significance has been omitted.
I have received a completion letter (lettre de fin de travaux) from
the auditors stating that they have verified the information
regarding the financial situation and the financial statements
included in this Annual Report and that they have read this
document in its entirety.
I certify that, to my knowledge, the financial statements
have been prepared in accordance with applicable accounting
standards and give a faithful representation of the assets,
financial situation and results of Dassault Systèmes SA and all
the companies included in the scope of consolidation, and that
the “management report” included in this Annual Report, as
indicated in the cross reference index below, presents a faithful
representation of the business trends, results and financial
situation of Dassault Systèmes SA and all the companies
included in the scope of consolidation as well as a description
of the principal risks and uncertainties which they face.
The consolidated financial statements for the year 2013
are covered by a report of the Statutory Auditors, set forth
on page 101 of the English-language translation of the
registration document for the year 2013 – filed with the AMF
on March 28, 2014 under the number D.14-0227 – which
contains an observation”.
Bernard Charlès
President and Chief Executive Officer
DASSAULT SYSTÈMES ANNUAL REPORT 2014 3
4 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
1
PRESENTATION
OF THE GROUP
CONTENTS
1.5 Research and Development
1.5.1 Overview
1.5.2 Intellectual Property
1.6 Risk factors
1.6.1 Risks Related to the Company’s Business
1.6.2 Financial and Market Risks
1.6.3 Insurance
26
26
26
27
27
34
35
1.1 Key Figures
1.2 History
1.2.1 History and Development of the Company
1.2.2 Investments
1.2.3 Facilities Strategy
1.3 Group Organization
1.3.1 Dassault Systèmes SA’s Position within the Group
1.3.2 Principal Subsidiaries of the Company
1.4 Business Activities
1.4.1 Principal Activities
1.4.2 Principal Markets
1.4.3 Material Contracts
6
7
7
10
11
12
12
13
14
14
17
26
DASSAULT SYSTÈMES ANNUAL REPORT 2014 5
1 Presentation of the Group
Key Figures
1.1 Key Figures
The selected financial information set forth below has been
prepared in accordance with International Financial Reporting
Standards (“IFRS”) as adopted in the European Union, unless
otherwise indicated.
A financial review including a comparison of 2014 and 2013
can be found in Chapter 3, “Financial review and prospects”.
(in millions, except percentages and per share data)
Total revenue
Operating income
As a percentage of total revenue
Net income attributable to equity holders of the Company
Diluted net income per share(1)
Dividend per share (1)
Supplemental non-IFRS financial information(3)
Total revenue
Operating income
As a percentage of total revenue
Net income attributable to equity holders of the Company
Diluted net income per share(1)
Year ended December 31,
2014
2013
2012
€2,294.3
€2,066.1
€2,028.3
430.8
18.8%
291.3
€1.14
€0.43(2)
503.0
24.3%
352.3
€1.38
€0.42
501.0
24.7%
334.8
€1.33
€0.40
€2,346.7
€2,072.8
€2,038.5
699.2
29.8%
465.5
€1.82
652.8
31.5%
445.5
€1.75
644.3
31.6%
424.5
€1.69
(1) All historical per share data reflects the two-for-one stock split effected in July 2014 (see paragraph 6.2 “Information about the Share Capital”).
(2) To be proposed for approval at the General Meeting of Shareholders scheduled for May 28, 2015.
(3) Readers are cautioned that the supplemental non-IFRS financial information is subject to inherent limitations. It is not based on any comprehensive set of accounting rules or
principles and should not be considered in isolation from or as a substitute for IFRS measurements. The supplemental non-IFRS financial information should be read only in
conjunction with the Company’s consolidated financial statements prepared in accordance with IFRS. Furthermore, the supplemental non-IFRS financial information may not be
comparable to similarly titled adjusted measures used by other companies. For a reconciliation of this non-IFRS financial information with the Company’s audited financial
statements, see paragraph 3.1.1.2 “Supplemental Non-IFRS Financial Information”.
(in millions)
ASSETS
Year ended December 31,
2014
2013
2012*
Cash, cash equivalents and short-term investments
€1,175.5
€1,803.7
€1,319.1
627.7
3,164.9
4,968.1
360.1
1,664.5
2,943.5
472.6
1,911.6
4,187.9
380.0
1,197.4
2,610.5
457.8
1,835.5
3,612.4
63.8
1,211.7
2,336.9
€4,968.1
€4,187.9
€3,612.4
Trade accounts receivable, net
Other assets
TOTAL ASSETS
LIABILITIES
Borrowings
Other liabilities
Parent shareholders’ equity
TOTAL LIABILITIES
* Restated to reflect the adoption of revised IAS 19.
6 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
1.2 History
Presentation of the Group
History
1
1
1.2.1 History and Development of the Company
1.2.1.1
Summary
Dassault Systèmes, the 3DEXPERIENCE Company, provides
software applications and services, designed to support
companies’ innovation processes. The Company’s software
applications and services span design from ideation, to
early 3D digital conceptual design drawings to full digital
mock-up; virtual testing of products; end-to-end global
industrial operations, including manufacturing management
to operations planning & optimization; and in marketing and
sales from digital marketing and advertising to end-consumer
shopping experience. The Group brings value to over
200,000 customers of all sizes, in all industries, in more
than 140 countries. Dassault Systèmes is the world leader
of the global Product Lifecycle Management (“PLM”) market
(design, simulation, manufacturing, collaboration) based upon
end-user software revenue, a position which it has held since
1999.
Dassault Systèmes was established in 1981 through the
spin-off of a small team of engineers from Dassault Aviation,
which was developing software to design wind tunnel models
and therefore reduce the cycle time for wind tunnel testing,
using modeling in three dimensions (“3D”). The Company
entered into a distribution agreement with IBM the same year
and started to sell its software under the CATIA brand. With
the introduction of its Version 3 (“V3”) architecture in 1986,
the foundations of 3D modeling for product design were
established.
its work with
Through
industrial customers, the
large
Company learned how important it was for them to have a
software solution that would support the design of highly
diversified parts in 3D. The growing adoption of 3D design
for all components of complex products, such as airplanes and
cars, triggered the vision for transforming the 3D part design
process into an integrated product design. The Version 4
(“V4”) architecture was created, opening new possibilities
to realize full digital mock-ups (“DMU”) of any product. The
V4 architected software solutions helped customers reduce
the number of physical prototypes and realize substantial
savings in product development cycle times, and it made
global engineering possible as engineers were able to share
their ongoing work across the globe virtually.
In order to fulfill the mission to provide a robust 3D Product
Lifecycle Management (“PLM”) solution supporting the entire
product lifecycle from design to manufacturing, the Company
developed and introduced its next software architecture in
1999, Version 5 (“V5”). In conjunction with its strategy and
product portfolio development plans, the Company undertook
a series of targeted acquisitions expanding its software
applications portfolio offering to include digital manufacturing,
realistic simulation, product data management and enterprise
business process collaboration.
Building upon its work in 3D, DMU, and PLM, and in conjunction
with the evolution it began to see among its clients in different
industry verticals, the Company unveiled in 2012 its next
horizon, 3DEXPERIENCE, designed to support its customers
in their innovation processes to deliver new and rewarding
experiences for their end users. The Company's vision is now
to encompass the harmonization between products, nature
and life and moved to an industry go to market strategy.
The 3DEXPERIENCE platform is a business platform which
can be used on premise or online, in a public or private cloud
leveraging the Company’s technology architecture Version 6
(“V6”). During 2013 the Company undertook an initial limited
launch of its new platform and initial cloud offerings followed
by a general availability release in February 2014.
See paragraphs 1.2.1.3 “Dassault Systèmes’ Purpose and
Strategy”, 1.4.1.1 “Summary” and 1.4.1.4 “Technology” for
further information.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 7
1 Presentation of the Group
History
1.2.1.2
Summary Timeline
1981
(cid:96) Creation of Dassault Systèmes to design products in 3D
through the spin-off of a team of engineers from Dassault
Aviation.
2000
(cid:96) Creation of the DELMIA brand, addressing the digital
manufacturing domain (digital process planning, robotic
simulation and human modeling technology).
(cid:96) The Company’s fl agship brand, CATIA, is launched.
(cid:96) Worldwide marketing, sales and support agreement with
IBM, beginning of a long-standing partnership.
(cid:96) Initial industry focus: automotive and aerospace.
1986
(cid:96) V3 software introduced for 3D Design.
1994
(cid:96) V4 architecture introduced offering a new technology
enabling the full Digital Mock-Up (“DMU”) of a product,
enabling customers to signifi cantly reduce the number of
physical prototypes and to have a complete understanding
of the virtual product.
(cid:96) Expansion of the Company’s industry focus to seven
industries, adding fabrication and assembly, consumer
goods, high-tech, shipbuilding and energy.
1996
(cid:96) Initial public offering in Paris and listing on the NASDAQ (the
Company voluntarily delisted from the NASDAQ in 2008).
1997
(cid:96) Broadening of the Company’s 3D design product line to
the entry 3D market, with the acquisition of the start-up
SOLIDWORKS, with a Windows-native architecture, to target
principally the 2D to 3D migration market opportunity.
(cid:96) Formation of the Company’s Professional channel, focused
on marketing, sales and support of SOLIDWORKS.
(cid:96) Organization of the Company into two business segments,
its customers’ end-to-end
design-centric
customers
process-centric, supporting
and
product
(Mainstream/SOLIDWORKS), dedicated
seeking to design products in a 3D design environment.
development
process,
to
1998
(cid:96) Creation of the ENOVIA brand, focused on management of
CATIA product data with the acquisition of IBM’s Product
Manager software.
1999
(cid:96) Launch of V5, a new architecture software for the PLM market
designed for both Windows NT and UNIX environments.
(cid:96) The Company expands its ENOVIA product line with
the acquisition of SmarTeam focused on product data
management for the small and mid-sized companies
(“SMB”) market.
8 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
2005
(cid:96) Creation of the SIMULIA brand, addressing realistic
simulation, representing a signifi cant expansion of the
Company’s simulation capabilities, leveraging the acquisition
of Abaqus.
(cid:96) Sales generated through the long-standing distribution
agreement with IBM account for 52% of the Company’s
total revenues.
(cid:96) Creation of the Company’s PLM Value Solutions sales
channel, an indirect channel for the PLM market specifi cally
focused on supporting SMB companies.
2006
(cid:96) Expansion of the ENOVIA portfolio with the acquisition of
MatrixOne, a global provider of collaborative PDM software
and services.
(cid:96) Expansion of the Company’s industry focus from seven to
11 industries.
2007
(cid:96) Amendment of the IBM PLM partnership agreement,
outlining the progressive assumption of full responsibility
for the Company’s PLM Value Solutions channel.
(cid:96) Creation of the 3DVIA brand. Building upon several years
of research and investment, 3DVIA was launched to bring
3D technology to new users to imagine, communicate and
experience in 3D.
(cid:96) Further expanding its product offering for CATIA, the
Company acquired ICEM, a company well-known in the
automotive industry for its styling and high-quality surface
modeling and rendering solutions.
2008
(cid:96) Introduction of the Company’s V6 architecture.
2010
(cid:96) The Company acquires full control of its distribution sales
channels with the acquisition of IBM PLM, the IBM business
unit dedicated exclusively to the marketing, sale and support
of the Company’s PLM software.
(cid:96) Signing of a Global Alliance agreement with IBM in which
the Company and IBM defi ned the next steps in their
relationship, extending their cooperation in key areas:
professional services, cloud computing, middleware, fl exible
fi nancing and hardware.
(cid:96) Acquisition of Exalead, a French company providing search
platforms and search-based applications for consumer and
business users.
Presentation of the Group
History
1
2011
(cid:96) DELMIA’s offering expands with the acquisition of Intercim,
offering manufacturing and production management
software for advanced and highly regulated industries.
(cid:96) Two-for-one stock split of the Dassault Systèmes share
par value on July 17, 2014, which was decreased from €1
to €0.50. Multiplication by two of the number of shares
representing the share capital at this date.
1
(cid:96) 100% of the Company’s total revenues are derived from
its wholly-directed three sales channels, completing the
transition from IBM begun in 2005.
(cid:96) Dassault Systèmes announced its new online V6 architecture
for 3DEXPERIENCE and applications.
2012
(cid:96) Expansion of the Company’s strategy to 3DEXPERIENCE.
See paragraph 1.2.1.3 “Dassault Systèmes’ Purpose and
Strategy”.
(cid:96) Creation of a new brand, GEOVIA, dedicated to model the
planet, focus on a new industrial sector, Natural Resources,
with the acquisition of Gemcom in the mining sector.
(cid:96) Acquisitions of Netvibes, bringing intelligent dashboarding
capabilities, and SquareClock, providing cloud-based
3D space planning solutions.
(cid:96) Introduction of the Company’s fi rst Industry Solution
Experiences.
2013
(cid:96) Unveiling of V6 Release 2014, available to select customers,
on premise as well as Software as a Service (SaaS),
featuring the controlled availability of existing and new
industry-focused and user-focused offerings and the
introduction of a new navigational user interface.
(cid:96) Broadening of the Company’s manufacturing offerings to
Manufacturing Operations Management with the acquisition
of Apriso.
2015
(cid:96) Introduction of 3DEXPERIENCE R2015x.
For further information on acquisitions in 2014 and 2013,
see paragraph 1.2.2 “Investments”.
1.2.1.3 Dassault Systèmes’ Purpose
and Strategy
Dassault Systèmes’ corporate purpose is to provide business
and people with 3DEXPERIENCE universes to
imagine
sustainable innovations capable of harmonizing product,
nature and life.
A growing number of companies in all industry verticals are
evolving their innovation processes to imagine the future both
with, and for, their end-consumers. To meet this challenge,
it is vital to ensure collaborative work processes internally
and externally to the enterprise with designers, engineers,
researchers and marketing managers, as well as external ad
hoc participants because the innovation flow comes from
many directions. Enabling this flow unleashes the innovation
its 3DEXPERIENCE
potential. Dassault Systèmes, with
platform leveraging its V6 architecture, provides this “linkage”,
enabling its clients to create the value that their ultimate
consumers are seeking. The Company’s 3DEXPERIENCE
portfolio is designed to support 3D realistic virtual experiences
representing usage of future products, and is comprised of
social and collaborative applications, 3D modeling applications,
simulation
intelligence
and
applications.
applications,
information
2014
(cid:96) Introduction of 3DEXPERIENCE R2014x, the fi rst release
of the Company’s new 3DEXPERIENCE platform, offering
end-to-end
engineering,
manufacturing and business capabilities and services, with
the V6 architecture as its foundation.
integrated
scientifi c,
and
(cid:96) Creation of a new brand, 3DEXCITE, with the acquisition
of Realtime Technology AG (“RTT”) providing professional
high-end 3D visualization software, marketing solutions
and computer generated imagery services to extend the
Company’s offerings to marketing professionals.
(cid:96) Creation of a new brand, BIOVIA, dedicated to address
science-based industries, combining the acquisition of
Accelrys and the Company’s internal developments in
BioPLM.
(cid:96) Further broadening of the Company’s manufacturing
offerings with the Quintiq acquisition in operations planning
and optimization.
For Dassault Systèmes to be able to help its customers
simulate the end-consumer experience, it is important to
have a complete understanding of the most critical business
needs of the industries in which its customers operate.
Therefore, Dassault Systèmes has adapted its organization to
provide a strong focus on the users of its software through
its brands structure, while at the same time, advancing the
understanding and development of the needs of its 12 target
industries through the combined action of its organization by
industry, sales channels and local geographic presence.
Dassault Systèmes has brought value to customers since
its inception in 1981 by providing solutions in 3D Design
for product creation, DMU for replacing physical mock-ups,
and PLM covering the product’s whole life, from design to
manufacture and service. Now Dassault Systèmes has crossed
into the next stage in its vision of the future: the 3DEXPERIENCE
era, where helping customers reach a new milestone in terms
of innovation for a greater end-user satisfaction, is the new
way of doing business.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 9
1 Presentation of the Group
History
1.2.2
Investments
The Company’s investments, both through expenditures on
its internal R&D efforts and through acquisitions, are closely
aligned with its strategic roadmap. The Company’s internal R&D
investments are the principal driver of its product innovations
and enhancements. In addition, with its expanded purpose
and Industry Solution Experiences strategy the Company is
growing its addressable market along two axes: (i) broadening
its offer to cover the key product disciplines of clients adding
upstream consumer insights to its core markets of design,
engineering, simulation and manufacturing, and extending
through to business planning and operations and point of sales
and end-consumer experiences; and (ii) expanding its market
coverage to address industries focused on the interaction of
business and people with nature (geosphere) and business and
people with life sciences (biosphere).
As a result, the Company has and will continue to evaluate
potential external investments complementing and extending
the business value it brings to industries, clients and users.
For further information, see paragraphs 1.2.1.3 “Dassault
Systèmes’ Purpose and Strategy” and 1.4.1.3 “Growth
Strategy”.
1.2.2.1 Acquisitions in 2014 and 2013
Well aligned with its expanded purpose and addressable market
vision introduced in 2012, Dassault Systèmes has been in an
active period of discussions with selected companies. During
2014 the Company invested €952.9 million on a net cash basis
to acquire companies in several key areas: (i) addressing the
life sciences where it introduced a new brand, BIOVIA, based
upon the acquisition of Accelrys and the Company’s internal
research in bio-intelligence; (ii) addressing marketers with the
RTT acquisition, rebranded as 3DEXCITE, which enables to
reuse virtual mock-ups or 3D product designs to create images,
marketing brochures, promotional films or virtual but very
realistic show rooms; and (iii) addressing business operations
management with the acquisition of Quintiq, for supply chain,
logistics and workforce operations planning and optimization.
In addition, the Company strengthened the capabilities of its
simulation brand, SIMULIA with the acquisition of SIMPACK
for multi-body simulation.
In 2013, the Company completed seven acquisitions,
for a net cash investment of €213.4 million. Acquisition
investments were made in manufacturing, simulation and in
urban modeling as follows: (i) in manufacturing where the
Company significantly expanded its DELMIA offering with
Apriso, providing manufacturing operations management
software solutions; (ii) in analysis and simulation, further
strengthening CATIA and SIMULIA’s capabilities with SFE
bringing a fully integrated design-simulation approach to run
simulations at an early stage of concept design and shorten
product development time; FE-DESIGN bringing powerful
design optimization technology; SIMPOE for plastic injection
molding simulation and Safe Technology for fatigue simulation
to evaluate product durability; and (iii) in the automated
creation and management of urban cities and landscapes with
Archivideo.
Acquisitions
2014: Creation of the BIOVIA brand, addressing science-based
industries with the acquisition of Accelrys and the Company’s
internal BioPLM developments.
In April 2014, Dassault Systèmes completed the acquisition
of Accelrys, a leading provider of scientific innovation lifecycle
management software for chemistry, biology and materials
sciences industries, a publicly-traded company based in San
Diego, United States. This acquisition was completed at the
end of a tender offer for all outstanding shares of Accelrys, for
cash consideration of approximately €542 million.
2014: Introduction of a new brand, 3DEXCITE, following
the acquisition of RTT, extending the Company’s offerings
to address marketing professionals in its core and target
industries.
I n January 2014, the Company acquired 84% of Realtime
Technology AG (RTT), a publicly-traded company, and then
finalized the acquisition of the remaining shares, leading to
a total purchase price of approximately €191 million in cash.
RTT is a leading provider of professional high-end visualization
software, marketing solutions and computer generated
imagery services. Its customer base includes a number of
the world’s leading automotive companies as well as global
industry leaders in aerospace and consumer goods. With RTT’s
solutions, companies are able to: i) more closely link design
and marketing domains thanks to very high level of realistic
3D real-time visualization; ii) speed time from design to
sales thanks to the ability to conduct marketing all along the
product development cycle; and in turn, iii) derive significant
returns on investment over traditional marketing methods.
2014: Dassault Systèmes Extends 3DEXPERIENCE platform to
Global Business Operations Planning with Quintiq Acquisition.
In September 2014, the Company completed the acquisition
of Quintiq, a global leader in operations management and
optimization with offerings spanning notably production,
supply chain, logistics, and workforce management, for cash
consideration of approximately €260 million. Receiving a top
ranking by clients, Quintiq’s solutions are used at 1,000 sites,
in more than 90 countries. Quintiq further enriches the
3DEXPERIENCE platform capabilities and enables a better
support for the Company’s customers in industries such as
10 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Presentation of the Group
History
1
solutions include: i) flexibility to quickly adapt to customer
environment while driving best-in-class manufacturing;
ii) standardization across multiple plants to establish best
practices; and iii) operations monitoring to synchronize
product releases across all manufacturing operations.
1
1.2.2.2
Principal Acquisitions of the Past
Three Years
The Company’s principal acquisitions with an individual
purchase price greater than €100 million over the last three
years include:
Acquisition
Accelrys
Quintiq
RTT
Apriso
Gemcom
Year
2014
2014
2014
2013
2012
Purchase Price
€542 million
€260 million
€191 million
€179 million
€274 million
metals, mining, oil & gas, air transport and rail, logistics and
freight. Key reasons customers select Quintiq’s solutions
include: i) a single, integrated solution able to solve operations
planning puzzles; ii) a solution designed to be 100% adaptable
to each client’s unique business processes, requirements and
constraints; iii) KPI-based planning; iv) superior performance
(Quintiq holds
results from record-breaking technology
120 world records in optimization); and v) seamless integration
with existing IT infrastructure.
2013: Broadening of the Company’s manufacturing offerings
to Manufacturing Operations Management
In July 2013 Dassault Systèmes acquired Apriso, a leading
provider of manufacturing operations management software
solutions, headquartered
in Long Beach, California for
approximately €179 million in cash. Apriso complements
DELMIA’s application portfolio through its manufacturing
operations management capabilities and expands DELMIA’s
offer across multiple industries, such as Consumer Goods &
Retail, Consumer Packaged Goods & Retail, High-Tech, Life
Sciences, Transportation & Mobility, Aerospace & Defense and
Industrial Equipment. Key reasons customers select Apriso’s
1.2.3 Facilities Strategy
With the exception of facilities totaling 21,000 square meters
belonging to 3D PLM Software Solutions Ltd (“3D PLM Ltd”)
located in Pune, India, the Company does not own the offices
it occupies and does not have full ownership rights over any
real estate or building, either directly or through a lease (see
Notes 14 and 25 to the consolidated financial statements).
Decisions regarding the
location of Dassault Systèmes
facilities are driven by the objectives of supporting growth in
the Company’s business. The Company is also guided by its
objectives to encourage synergies and collaboration within
the Company, control costs and reduce environmental impact,
while also improving staff working conditions. The Company
seeks to be close to its customers, its partners in research
and principal schools and universities, which are one of the
main sources of recruitment for Dassault Systèmes. In light
of the challenges lying ahead for the Group in the next few
years, the facilities department has equipped itself with all the
tools required to deal with them. It has formalized and unified
the decision-making process, and put in place occupancy
and economic performance indicators. In order to ensure
continuous high performance, these indicators are compared
with a panel of High-Tech companies.
1.2.3.1
Facilities Rationalization Strategy
The rationalization of the Company’s facilities is determined
by grouping together subsidiaries and operations on a limited
number of sites throughout a single region or country. This
process has, in particular, led to an audit of the facilities and
their usage conditions, during external growth transactions, in
order to determine steps to be taken in connection with the
Group’s strategy (maintaining the lease, facilities rehabilitation
or consolidation).
1.2.3.2 Respecting the Environment
The Company is committed to a voluntary process of
limiting its impact on the environment (see paragraph 2.2.2
leads to seeking
“Environmental Report”). This process
DASSAULT SYSTÈMES ANNUAL REPORT 2014 11
1 Presentation of the Group
Group Organization
sites offering performance criteria in terms of modern
facilities, communications networks, environmental impact,
accessibility and Dassault Systèmes’ corporate image. The
Group seeks to rent buildings certified “HQE” (Haute Qualité
Environnementale, or High Environmental Quality) which is
well illustrated by its registered office in Vélizy-Villacoublay,
close to Paris (the “3DS Paris Campus”) and its major campus
near Boston, to cite a few.
1.2.3.3
Principal Sites
At December 31, 2014, the principal sites occupied by Group companies (except 3D PLM Ltd) in its three geographic regions are
as set forth in the table below.
Geographic region
Principal Sites
Europe
3DS Paris Campus Vélizy-Villacoublay, France(1)
3DS Munich Rosenheimer, Germany(4)
3DS s-Hertogenbosch, the Netherlands(4)
Americas
3DS Boston Campus, Waltham, Massachusetts, U.S.(2)
3DS Providence, Rhode Island, U.S.(3)
3DS San Diego, U.S.(4)
3DS Montreal, Canada
3DS Auburn Hills, Michigan, U.S.
3DS Selangor, Malaysia(4)
3DS Tokyo, Japan
Asia
Surface area
(in m2)
Activities on the site
70,000
7,800
5,400
20,000
8,800
5,700
5,200
4,600
4,700
4,500
Headquarters, R&D, Marketing and sales
R&D, Marketing and sales
R&D, Marketing and sales
R&D, Marketing and sales
R&D, Marketing and sales
R&D, Marketing and sales
Marketing and sales
R&D, Marketing and sales
R&D, Marketing and sales
Marketing and sales
(1) Dassault Systèmes occupies in Vélizy-Villacoublay a facility covering 60,000 square meters built in 2008 in accordance with the Group’s specifications. Since 2011,
Dassault Systèmes has rented 10,000 additional square meters in a nearby building. In February 2013, the Company entered into a build-to-suit lease agreement for a new
building to expand its headquarters. Under this agreement the Company has committed to lease an additional 13,000 square meters of office space (see Note 25 to the consolidated
financial statements).
(2) The Company has options to lease additional space as necessary at its 3DS Boston Campus.
(3) Since November 2014, Dassault Systèmes has occupied a new facility in the city of Johnston (near Providence, Rhode Island).
(4) Sites obtained through acquisitions in 2014 (RTT, Accelrys and Quintiq).
Dassault Systèmes believes that its existing real estate facilities are adequate, and that it is possible to acquire additional or
alternative space in the future, depending on needs, at reasonable conditions.
1.3 Group Organization
1.3.1 Dassault Systèmes SA’s Position within the Group
in
integrated
Dassault Systèmes SA, the Group’s parent company, fulfills
several roles: first, it is one of the Group’s largest operating
companies and one of its principal R&D centers, responsible
for the development of a number of the Group’s software
the 3DEXPERIENCE platform.
solutions
Dassault Systèmes SA also operates as a holding company as it
owns directly or indirectly all the companies that make up the
Group. Dassault Systèmes SA plays a centralizing role, defining
the Group’s overall strategy and the means for its deployment,
as well as the marketing and sales policy through the Group’s
three sales channels (described in paragraph 1.4.2.5 “Sales and
Marketing”). The parent company manages the Group’s cash
and financing needs centrally (“cash pooling”), and provides
support to the Group for a number of activities, including
finance, communication, marketing, legal affairs (including
management and protection of IP), human resources and IT,
and pools certain costs for its subsidiaries.
Dassault Systèmes SA receives dividends paid by
its
subsidiaries. Additionally, the costs of providing centralized
services are charged back to the respective subsidiaries
benefiting from support services and cost pooling, and it
receives royalties related to the IP it holds.
12 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Presentation of the Group
Group Organization
1
1.3.2 Principal Subsidiaries of the Company
At December 31, 2014,
included
Dassault Systèmes SA and 128 operational subsidiaries, as
compared to 94 operational subsidiaries in 2013; the increase
was due principally to the acquisitions of RTT, Accelrys and
the Company
Quintiq. In 2014, the Company continued its effort to simplify
the organization of its legal entities throughout the world.
The objective of this effort, which was launched in 2007, is
to reduce the number of legal entities held in each country.
1
The chart below sets forth the Company’s main subsidiaries.
Dassault Systèmes SA
Dassault Data Services SAS
(France)
Dassault Systemes K.K.
(Japan)
Dassault Systemes Korea Corp.
(South Korea)
Dassault Systemes Deutschland GmbH
(Germany)
%
0
0
1
Dassault Systemes SolidWorks Corporation
(USA)
SolidWorks Japan K.K.
(Japan)
Dassault Systemes 3DExcite GmbH
(Germany)
Dassault Systemes Simulia Corp.
(USA)
Dassault Systemes UK Ltd
(United Kingdom)
Dassault Systemes Canada Inc.
(Canada)
Europe
Asia
Americas
Di rect and indirect equity interest
Dassault Systemes Americas Corp.
(USA)
%
0
0
1
Dassault Systemes Services, LLC
(USA)
Dassault Systemes Biovia Corp.
(USA)
See also Note 27 to the consolidated financial statements and the table of subsidiaries and shareholdings under Note 24 to the
parent company financial statements.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 13
1 Presentation of the Group
Business Activities
1.4 Business Activities
1.4.1 Principal Activities
1.4.1.1
Summary
Dassault Systèmes, the 3DEXPERIENCE Company, provides
end-to-end software, content and services, designed to
support companies’ innovation processes. The Company’s
software applications and services now encompass three
principal spheres: “Product-Sphere”, “Geo-Sphere” and
“ Bio- Sphere” reflecting the Company’s expanded purpose
to provide business and people with virtual 3DEXPERIENCE
universes enabling to
innovations capable of
imagine
harmonizing product, nature and life.
Dassault Systèmes is the world leader of the global Product
Lifecycle Management market based upon end-user software
revenue (source: CIMdata), a position which it has held
since 1999. Its world leadership reflects its core DNA as a
scientific company, combining science, technology and art
to help advance the success of the customers and users it
addresses with its Industry Solution Experiences.
Its software offerings now address users all across a
company’s product development loop enabling the Group
to provide companies with a comprehensive perspective:
from the product idea and specification; to design with early
3D digital models to full digital mock-ups; to virtual testing of
products; to virtual production and manufacturing operations
management; to operations planning and optimization; and
lastly to digital marketing and sales to end-consumer shopping
experience.
14 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
The Company has a diverse customer base, working with the
smallest manufacturers in the world to global leaders across
a number of industries. Its customers include companies in
12 industrial sectors: Aerospace & Defense; Transportation &
Mobility; Marine & Offshore; Industrial Equipment; High-Tech;
Architecture, Engineering & Construction; Consumer Goods &
Retail; Consumer Packaged Goods & Retail; Life Sciences;
Energy, Process & Utilities; Financial and Business Services; and
Natural Resources. See paragraph 1.4.2.2 “3DEXPERIENCE
Industries Served”.
1.4.1.2
Key Business Strengths
of the Company
its
Dassault Systèmes believes that
leadership of the
global PLM market reflects the fact that it has developed
the largest 3D PLM software applications portfolio in the
world with leadership positions in 3D design, simulation,
digital manufacturing and production and business process
management. With the addition of information intelligence,
social collaboration and realistic 3D virtual experiences
is positioned to work with
capabilities, the Company
companies from ideation to consumer experience and across
departments from research and development, engineering,
testing, manufacturing, governance to marketing and sales.
Dassault Systèmes software applications are focused on
helping customers address many of their most critical
product issues:
(cid:125) innovation to design new and rewarding experiences for
their end-customers;
(cid:125) time-saving for the launching cycle of new products;
(cid:125) manufacturing cost reduction;
(cid:125) improvement of the product quality and compliance;
(cid:125) time-to-market;
(cid:125) market globalization (design/manufacture anywhere);
(cid:125) supply chain collaboration;
(cid:125) regulatory compliance;
(cid:125) IP protection;
(cid:125) manufacturing efficiency.
Presentation of the Group
Business Activities
1
1
Dassault Systèmes maintains a long-term focus, well
supported by its financial model with a high level of
recurring software revenue.
One of the key reasons for the Company’s market share
leadership over the last fifteen years is its focus on a long-term
vision which is characterized by investing in people and
its long-term financial model. The Company has a diverse,
highly-educated employee base of over 13,000 employees
representing 116 nationalities. The Company’s long-standing
financial model, with a high level of recurring software revenue
(accounting for 73% of the Company’s total non-IFRS software
revenue in 2014), has enabled the Company to maintain as
well as increase investments in critical resources in R&D and
customer support even during challenging macroeconomic
environments.
Dassault Systèmes has a substantial commitment to
technological innovation which has enabled it to define and
create new markets, such as 3D Design, Digital Mock-Up,
Product Lifecycle Management and 3DEXPERIENCE. It
maintains an active dialogue with customers and users in
product development and an open development platform to
broaden product offerings for customers.
A key component to advancing the Company’s technology
and enabling it to define and create new markets is the close
relationship it has with its customers, including partnerships
with customers who are global leaders in their respective
industries, and the input the Company solicits from the
day-to-day users. The Company works closely with customers,
involving them in many phases of product development.
Through these close, long-term working relationships, the
Company develops a good understanding of its customers and
their most important business values. This level of knowledge
enables the Group to develop software solutions more closely
attuned to the customers’ requirements, highly suited to
their industries, and designed to maximize user productivity
and experience.
Dassault Systèmes has developed a clear identity and value
to its users through its market-proven brand strategy.
Commencing in 2012 the Company began to launch
Industry Solution Experiences that focus on key processes
and bring together the appropriate applications from its
market-leading brand applications portfolio.
The Company’s brand strategy (see paragraph 1.4.2.4
“3DEXPERIENCE Software Applications Portfolio”) focuses
on providing significant value to end-users with the objective
of each brand being a leader within its respective markets.
In support of its “Social Industry Experiences” strategy, the
Company packages its applications and user roles in Industry
Processes chosen because of their business relevance in each
of the 12 industries the Company targets.
Dassault Systèmes has a resilient and dynamic ecosystem of
partners, including for business sales, service with system
integrators, software development, educational and research
and technology.
Since inception the Company has worked in close partnership
with other professionals
in software development and
technology, in sales and marketing, in services and in education
and research. For marketing and sales, the Company operates
through both a direct sales force and indirectly through
value-added resellers, with total sales well balanced between
direct and indirect sales channels. It continues to selectively
expand and to extend its sales radius, deepen its industry
expertise and relationships, as well as domain or discipline
knowledge of its three sales channels. Similarly, the Company
is also expanding its relationships with system integrators
with strong industry expertise and regional presence for both
sales and service engagements.
Moreover, the Group is engaging with its ecosystem, working
with more than 400 software development partners building
applications complementing its software applications as well
as working with key technology partners.
The Company has worked closely for years with academic
and research organizations around the world to prepare the
STEM employees of tomorrow, collaborate in accelerating the
creation of new software dedicated to help the digital world
improve the real world and to use 3D to enable an improved
learning environment for students throughout the world.
1.4.1.3 Growth Strategy
Dassault Systèmes principal growth opportunities reflect
its current addressable market opportunity in PLM and the
increased potential size of its addressable market, estimated
at approximately $32 billion, with the expansion of its
market to 3DEXPERIENCE. The Company’s growth strategy
is focused on expanding its 3DEXPERIENCE market offering,
with user expansion in its core industries, diversification
of its industry coverage, deepening of its regional market
penetration, offering software on the c loud and through
Mobile applications, and selected key acquisitions.
(cid:125) Users expansion in its core industries: the Company sees
opportunities to expand the number of users of its software
solutions within its core industries through diversification
by addressing new disciplines and new segments. Within
a corporation, the Company’s applications now target
a large portion of the enterprise employees engaged in
contributing to the end-consumer product experience,
spanning from design, engineering and simulation, to
manufacturing, quality assurance and compliance, and from
project management, business planning & operations and
service departments to marketing, point of sales. For further
information see paragraph 1.4.2 “Principal Markets”.
(cid:125) Diversification of its industry coverage: through its focus
on developing industry specific solutions for the 12 vertical
industries it addresses, including its Industry Solution
Experiences and processes. The Company sees opportunities
to expand its presence and has developed industry solutions
to further its progress in each of the industrial sectors it
targets. For further information, see paragraph 1.4.2.2
“3DEXPERIENCE Industries Served”.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 15
1 Presentation of the Group
Business Activities
(cid:125) Deepening of its regional market penetration: the Company
sees opportunities to grow its presence in all geographic
markets. In order to strengthen and broaden its global
footprint, the Company has established 12 regional field
organizations to prioritize and drive the Company’s growth
initiatives at a local level. See paragraph 3.1.1.1 “Executive
Overview for 2014” for further information on growth by
geographic region.
(cid:125) 3D Dashboarding Technologies and Services: The
3DEXPERIENCE platform provides capabilities to dashboard,
monitor and summarize all enterprise and business
activities. With semantics and tagging technologies,
the platform provides unique ways of compassing any
businesses with real-time streamed media and information
in a context-aware, managed and intuitively-experienced
fashion.
(cid:125) Availability of on premise solutions, on the cloud, and
mobile applications: with the Company’s 3DEXPERIENCE
platform utilizing a cloud-enabled V6 architecture, the
Company is positioned to grow through its Cloud and
Mobile offerings. The Company believes that it will become
a growth driver with the progressive roll-out of its services
offering over the coming years, as well as with the release
of mobile applications using tablets because of the quick
implementation time and the reduction in total cost of
ownership it provides to customers. For further information
see paragraph 1.4.1.4 “Technology”.
(cid:125) Expanding through targeted acquisitions: in 2012, the
its next horizon, 3DEXPERIENCE,
Company unveiled
representing a potential doubling of its addressable market,
expanded its purpose and outlined a new strategy. Aligned
with its strategy, the Company is complementing its
internal developments with key selected acquisitions. For
further information see paragraphs 1.2.2 “Investments”,
1.4.1.4 “Technology” and 1.4.2 “Principal Markets”.
For a description of the challenges that must be met to
maintain growth, see paragraph 1.6.1 “Risks Related to the
Company’s Business”.
1.4.1.4
Technology
Dassault Systèmes has a substantial commitment to
technological innovation. Important areas of investment in
R&D include, among others, the 3DEXPERIENCE platform
foundations and services, Modeling Technologies (3D, systems
engineering, natural resources & biosystems), technologies for
product, production and usage realistic simulation, intelligent
information technologies (indexing, dashboarding and also
project management and compliance) and connectivity
technologies
(for social and structured collaboration).
Moreover, the Company’s R&D efforts are centered on
advancing breakthrough user experiences, and expanding the
reach of its solution with native cloud and mobility solutions.
3DEXPERIENCE platform, based on the V6 organic architecture
Since 1981, the Company has
introduced six versions
of its architecture, the most recent of which is V6. The
V6 software architecture is the foundation of the revolutionary
3DEXPERIENCE platform
that offers end-to-end and
integrated scientific, engineering, manufacturing and business
capabilities and services.
(cid:125) Social Collaboration Technologies and Services: The
3DEXPERIENCE platform allows any business to become
social, extending from structured project and organization
to social and open communities. The technology and
services allow seamless integration of communities, people,
rich profiles and media with access control and best of breed
practices (project management, ideation, wikis, blogs,
suggestion engines).
(cid:125) IP as a Service Technologies: The 3DEXPERIENCE platform
integrates Dassault Systèmes’ brands and
industry
offerings, with the semantic breadth and deepness to
handle any kind of corporate Intellectual Property for any
Product, Nature or Life data sets. IP Technologies and
services therefore are unique assets covering IP modeling,
IP lifecycle management and IP protection for all social
industries.
(cid:125) Cloud Technologies and Services: The 3DEXPERIENCE
platform provides cloud-based workspaces services and
technologies to enable secured, concurrent, and controlled
online collaborative environments to share, and innovate on
any IP. This technology is unique, optimized for big data
and available for remote usage for a wide variety of industry
practices.
(cid:125) Experiences Play Technologies and Services: The
3DEXPERIENCE platform aims at providing real-time,
realistic 3D experiences. The Play Technologies and Services
deliver unmatched visualization, execution, interactivity,
and scenarios experience in heterogeneous virtual universes.
3D Modeling Technologies
The Company’s DNA to model and represent as scientifically
accurate as possible products, nature and life has given birth
to a unique portfolio of modeling technologies and services
ranging from 3D Modeling to Systems Logical and Functional
Modeling. This applies to a wide spectrum of applicative
domains from Smart/Connected Products to urban systems,
to natural resources, to biological systems and chemistry.
16 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Presentation of the Group
Business Activities
1
1
Virtual + Real Technologies
Connectivity Technologies
The 3DEXPERIENCE is made possible by real-time realistic
simulation of virtual universes. The Company has therefore
made significant investments in technologies and services,
enabling simulation
from product’s complex
behaviors; factory and production systems execution; and
consumer usages in everyday life. This relies on unique
assets for complexity management and distributed massive
multi-discipline execution.
ranging
Intelligent Information Technologies
information
Consistent with the Company’s understanding of the
importance of harnessing and re-using data, the Company
acquired Exalead during 2010. With the acquisition of
Exalead, the Company has significantly expanded its internal
indexing and search capabilities technology and acquired an
important search-based infrastructure for the development
of
intelligence applications. The Company’s
search-based applications combine the sophisticated search
and access typically associated with databases with the
speed, scalability and simplicity of the Web. This allows
the 3DEXPERIENCE platform customers to tackle big data
challenges and benefit from next generation technologies to
search, sort, filter, navigate and understand data. The real-time
dashboarding technologies provided by Netvibes are in that
regard a unique combination for all businesses consuming and
producing massive sets of information.
The 3DEXPERIENCE platform is serving the social industry
experience strategy. With unique connectivity technologies
and services, allowing people and communities to connect in
a secure and controlled environment, with mobility and online
hybrid environments, it enables a new era of innovation on
extended ecosystems and fosters a truly open platform
innovation for all businesses. It also enables improved project
management, conformity to standards, process certification
for customers and supply chain relationships.
Technology and Software Partners
The Company has established
long-standing, technical
collaborations with key partners in order to maximize the
benefits from available technology and to increase the value
for shared customers. The Company’s technology alliances
are established with three objectives: to cover end-to-end
solutions with holistic offerings; to expand the Company’s
global network of partners sharing the same interests; and
to integrate the latest features of these technologies into
its solutions. The Company has a number of technology
partnerships
including among others, AMD, NVIDIA,
3D Systems, Sculpteo and Z-Space.
The Company has software development partners working in
each domain of its software solutions. The Company’s largest
program with software partners is its software community
program that enables developers to create and market their
own applications fully integrated with and complementary to
the Company’s software solutions. See also paragraph 1.6.1.9
in Relationships with Extended Enterprise
“Difficulties
Partners”.
1.4.2 Principal Markets
1.4.2.1 Overview
1.4.2.2
3DEXPERIENCE Industries Served
introduction of
its
In connection with the Company’s
3DEXPERIENCE strategy and reflecting its broad software
applications capabilities, the Company has organized itself
along three axis: (i) a strategy to cover customer processes
based upon an industry-focused set of offerings, “Industry
Solution Experiences” based upon the Company’s underlying
software applications portfolio, content and services; (ii) a
domain-focused group of software applications organized by
brand in order to ensure a strong focus on the satisfaction of
end-user needs; and (iii) a global-local-specialized organization
in order to leverage its global strengths, while at the same time
ensuring a strong local understanding and field operations.
See also paragraph 1.4.1.3 “Growth Strategy”.
The Company’s global customer base includes companies in
12 industrial sectors: Aerospace & Defense; Transportation &
Mobility; Marine & Offshore; Industrial Equipment; High-Tech;
Architecture, Engineering & Construction; Consumer Goods &
Retail; Consumer Packaged Goods & Retail; Life Sciences;
Energy, Process & Utilities; Financial and Business Services;
and Natural Resources.
For its latest full fiscal year 2014, the composition of end-user
software revenue by major industry was approximately as
follows: Transportation & Mobility about 30% (29% in 2013);
Industrial Equipment about 19% (19% in 2013); Aerospace &
Defense about 12% (14%
in 2013); Business Services
about 11% (12% in 2013); Marine & Offshore and Other
Target Industries about 28% (26% in 2013).
DASSAULT SYSTÈMES ANNUAL REPORT 2014 17
1 Presentation of the Group
Business Activities
In connection with the Company’s change in its go-to-market
strategy evolution from brands to industries, it began the
introduction of ‘Industry Solution Experiences’ commencing
in 2012. The Company’s Industry Solution Experiences are
designed to address key business processes of the respective
individual industry and are comprised of industry process
experiences.
To deepen its penetration of each industry, the Company
undertakes the continuing development of industry-specific
solutions, both through
internal development and by
acquisition, and increasing its expertise through partnerships
with leading companies and system integrators and the
addition of specialized direct sales and sales partners.
Through strategic alliances with leading IT system integrators,
service providers and consulting firms with deep expertise
in industry processes, the Company’s Industry Solution
Partnerships provide innovative PLM solutions and services
by industry or industrial segment to address clients’ business
challenges. Based on their strong competence in industries
and application domains as well as their regional expertise, in
conjunction with Dassault Systèmes’ products and solutions,
these partners help to deliver innovative solutions that
customers need for success in their business.
See paragraph 1.2.2 “Investments”.
1.4.2.3
3DEXPERIENCE Business Platform
introduced
In February 2014, the Company
its new
3DEXPERIENCE platform and on Premise and on the Cloud
offerings for companies of all sizes. This initial release
provided an on premise offering including 41 Industry Process
Experiences and 183 processes while the Cloud offering
was comprised of 14 Industry Process Experiences and
60 processes. With the introduction of its second release in
February 2015 the on premise and in public or private cloud
portfolio was expanded to cover Roles for Users.
The V6 architecture unifies the user experience for all Processes
and Industries. Built to answer customer and industry specific
needs for ease of use and lower training costs, it allows
customization and the integration of customer data into a
single environment. It provides a single source for truth by
integrating all data required to create a Process experience
while eliminating costly IT operations, such as database
replication.
The 3DEXPERIENCE R2014x update
is available to all
Version 6 customers, and migration paths are available to the
Version 5 installed base.
The 3DEXPERIENCE Process Portfolio On Cloud is offered as
Software as a Service (SaaS) on a public or private Cloud to
provide increased flexibility and fast deployment. In addition
to offering the same software applications which are also
available on premise for a broad portfolio of Processes and
Roles, it includes the operation of the Cloud environment in
the price of the Processes. The public cloud operates 24 hours
per day, 7 days per week, 365 days per year, and includes
maintenance, licensing, and upgrades. Total Cost of Ownership
is improved by reducing requirements for computing and
storage, as well as facility and human resources costs.
A single interface – the 3D Compass – provides easy-to-use
navigation, search, and collaboration in the 3DEXPERIENCE
platform environment that is extensible to any discipline in
a company – engineering, manufacturing, simulation, sales,
marketing, finance, procurement, and management.
See paragraph 1.4.1.4 “Technology”.
1.4.2.4
3DEXPERIENCE Software
Applications Portfolio – Addressing
the Needs of its User Communities
The Company’s 3DEXPERIENCE software applications portfolio
is designed to enable the powering of 3D realistic virtual
experiences and is comprised of 3D modeling applications,
simulation applications, social and collaborative applications,
and information intelligence applications.
Since its inception, the Company has focused on creating a
portfolio of leading brands, each focused on specific user
groups. The Company continues to expand its brands and
create new brands to meet the evolving needs of existing
and new users across its expanded addressable market and,
in addition, began introducing in 2012 Industry Solution
Experiences. These solutions are designed on an industry-by-
industry basis, and are designed to trigger and connect the
value created by each discipline in an industry to ensure that
the Company value stream is not interrupted.
Dassault Systèmes’ investments in research and development
as well as targeted acquisitions enable the Company to deepen
and broaden its offerings for customers as well as to bring its
significant assets to help advance innovation in other target
domains and industries. These investments advance the
Company’s brand portfolio and have led to the introduction
of several new brands in 2014 including: (i) BIOVIA, focused
on science driven industries to help them introduce scientific
innovation in the biologic, chemical and material sciences;
and (ii) 3DEXCITE, focused on helping companies across core
and other industries create marketing materials from virtual
product representations.
18 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
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(cid:125) Simulation: SOLIDWORKS offers a comprehensive suite
of simulation applications to set up virtual real-world
environments to test product designs before manufacture.
Tests can be conducted against a broad range of parameters
during the design process – like durability, static and
dynamic response, motion of assembly, heat transfer, fluid
dynamics, and plastics injection molding.
(cid:125) Technical documentation: SOLIDWORKS Composer allows
users to easily repurpose existing 3D design data to more
rapidly create and update high quality graphical assets for
product deliverables, including documentation, technical
illustrations, animations, and interactive 3D experiences.
(cid:125) Electrical Design: SOLIDWORKS Electrical applications
provide a range of electrical system design functionality to
meet the needs of design professionals. All project design
data is synchronized with real-time, bi-directional updates
between schematics and the 3D model. Powerful schematic
design tools quickly develop embedded electrical systems
for machines or products.
In February 2015, SOLIDWORKS Industrial Design was
introduced, the second SOLIDWORKS application to be
available on the 3DEXPERIENCE platform, following the
launch in 2014 of SOLIDWORKS Conceptual Design (formerly
called SOLIDWORKS Mechanical Conceptual). With Dassault
Systèmes’ 3DEXPERIENCE platform, SOLIDWORKS Industrial
Design provides social design capabilities and transparent data
management that allow engineers and designers to quickly
solve industrial design challenges and easily transition to
mechanical design. Safe, secure, intelligent data storage on
the cloud can be accessed anytime from anywhere to share
designs, collaborate on ideas, save and evaluate multiple
concepts.
In addition to the products it offers to SOLIDWORKS users,
SOLIDWORKS operates a development partnership program
bringing together companies supplying complementary
products that are either compatible with or tightly integrated.
Through this program, over 300 compatible products have
been made available to customers in many functional areas,
including manufacturing, rapid prototyping and mold design.
CATIA – Shape The World We Live In
CATIA is the Company’s pioneer brand and is the world’s
leading solution for 3D product design and innovation (source:
CIMdata). CATIA, which is used by companies of all sizes,
addresses the complete product development process, from
early product concept specification through product in service.
CATIA provides unparalleled user experiences that enable the
design and engineering of products and systems in a digitally
accurate 3D world.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 19
3D Modeling Applications
SOLIDWORKS – Inspiring Innovation
SOLIDWORKS applications cover all aspects of the product
development process with a seamless, integrated workflow
for design, simulation, technical communication and data
management. Designers and engineers can span multiple
disciplines with ease, shortening the design cycle, increasing
productivity and delivering innovative products to market
faster.
SOLIDWORKS software applications are easy to learn and use
and work together to help professionals to design products
better, faster, and more cost effectively. The SOLIDWORKS
focus on ease of use allows more engineers, designers and
other technology professionals than ever before to take
advantage of 3D in bringing their designs to life.
SOLIDWORKS applications include 3D tools to design, manage,
simulate and communicate.
(cid:125) 3D Design: 3D design application for rapid creation of
parts, assemblies, and 2D drawings with minimal training.
Application-specific tools for sheet metal, weldings,
surfacing, and mold tool and die make it easy to deliver
best-in-class designs.
(cid:125) Data Management: SOLIDWORKS product data management
(“PDM”) applications help professionals to get design data
under control and substantially improve the way teams
manage and collaborate on product development.
1 Presentation of the Group
Business Activities
CATIA goes far beyond traditional 3D CAD to offer a unique
ability to imagine and shape the connected world. CATIA
delivers the ability not only to model any product, but to do so
in the context of product behavior. The CATIA 3DEXPERIENCE
delivers:
(cid:125) a SOCIAL design environment that drives business
intelligence, real-time concurrent design and collaboration;
(cid:125) an
INSTINCTIVE 3DEXPERIENCE, powered by top
3D modeling functionalities;
(cid:125) an INCLUSIVE product development platform, easily
integrated with existing processes & tools enabling
everyone to participate in the product design process.
(cid:125) CATIA Engineering: Engineering Excellence
CATIA Engineering solutions enable the creation of any type
of 3D assemblies for practically all mechanical engineering
processes.
They address the specific requirements of a wide range of
industries and processes, covering for example cast and forged
parts, plastic injection and molding operations, composites
part design and manufacturing, sheet metal parts design and
advanced fastening operations.
Engineers can rely on CATIA 3D Modeling tools to define a
complete mechanical product, including functional tolerances,
3D annotations as well as kinematics.
Predefined processes in CATIA empower engineers to deliver
a greatly improved productivity, not only in completing the
mechanical design more quickly, but also in reducing the time
to perform changes in product design or in new releases.
(cid:125) CATIA Design: Delivering Advantage by Design
Successful product designs evoke positive emotional responses
from their consumers. Creative designers need software
tools that enable them to easily craft such products, while
collaborating with engineering on the functional scope. CATIA
addresses the entire shape design, styling, and surfacing
workflow, from industrial design to Class A surfacing. Intuitive
shape design tools deliver flexibility to simplify design of
any kind of complex shape, with advanced functionality
like reverse engineering, real-time diagnostics, best-in-class
unified surface modeling, rapid propagation of design
changes, and high-end visualization. CATIA enables creative
designers, design studios, and engineering departments to
easily collaborate and optimize both product aesthetics and
engineering.
(cid:125) CATIA Systems Engineering: Mastering the cross-discipline
systems development process
As the number and complexity of embedded systems
continues to grow, the effective definition, modeling and
simulation of these individual systems, and their interaction
with other systems, becomes increasingly important. Systems
engineering is essential to avoid detecting unexpected system
interactions during the validation and verification phases of
the product development process.
CATIA delivers a unique solution that fully enables and supports
the cross-discipline systems engineering development process
from systems definition through to modeling, simulation, and
verification.
This solution provides a unified and integrated approach to
systems engineering that manages the overall development
process with cross discipline definition and navigation of the
many relationships that exist between the different systems
artifacts that define today’s complex products.
GEOVIA – Virtual Planet
GEOVIA provides Business, Government and Individuals with
3DEXPERIENCE Universes to Model and Simulate the Earth
from the vast expanse of the geosphere to the smallest details
of urban settlements.
The dramatic increase of the world’s urban population affects
the entire planet, causing a rapid change in the geosphere,
and a limited availability of global resources.
GEOVIA supports the sustainable capture, use and re-use of
natural resources across the planet, including minerals, fresh
water, air, oil and gas, and various other forms of energy.
From mining to urbanization, GEOVIA delivers innovations to
improve life on earth.
Mining
In mining, GEOVIA’s customers are increasing productivity,
efficiency, and safety during the identification of extraction
of natural resources. At the same time, they are also achieving
a greater level of production predictability and sustainability.
With GEOVIA, geologists, mining engineers, operations
managers, and executives improve how they model, plan,
optimize and understand mining performance to increase
profitability.
including:
GEOVIA’s software spans all mining phases,
exploration and evaluation; mine planning; optimization; and
mine production. Its applications include:
(cid:125) Geology and Mine Planning: GEOVIA Surpac, GEOVIA GEMS,
and GEOVIA Minex enable mineral deposits to be modeled
and their extraction to be designed and planned in 3D;
(cid:125) Optimization and Scheduling: GEOVIA Whittle examines
the viability of mineral deposits in consideration of mine
designs, mining equipment, and economic factors. GEOVIA
MineSched is used to schedule mine production. GEOVIA
PCBC provides these capabilities for block cave mines;
(cid:125) Secure, Remote Collaboration: GEOVIA Hub provides secure
remote collaboration that organizes, centralizes and enables
the reliable sharing of exploration, planning, and production
data over low-bandwidth connections;
(cid:125) Mine Production Management: GEOVIA InSite collates
progress of production activities and processes to better
ensure conformance to plan. Real-time data allows for rapid
response to changing operating conditions and production
issues.
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Cities
During 2014 the Company unveiled GEOVIACity, with the
objective to help potential clients improve the quality of life
for the citizens by creating better urban environments for
today and tomorrow. With GEOVIA, city planners work in
a virtual world to model and simulate the cityscapes and all
components making up a city to improve their functionnings.
GEOVIA 3D EXPERIENCity creates unique user experiences
that holistically model and analyze all parts and processes
constituent to urban life in the geosphere.
Within the geosphere, human activities continuously relocate
resources. In particular, urban settlements are aggregations
and condensation points capturing, using, and reusing the
planet’s natural resources. Consequently, the effects of
urbanization are not limited to the city, but rather affect the
entire geosphere, the entire planet.
Through 3D simulation, the future can be displayed, by
actively involving government, business, and individuals to
facilitate critical decision-making processes with the aim to
harmonize product, nature and life.
BIOVIA – Virtual Biosphere and Materials
BIOVIA provides a scientific collaborative environment
for biological, chemical and materials experiences.
Its
customers include companies within a number of industries:
spanning from pharmaceutical and biotechnology industries;
chemicals; consumer packaged goods; food and beverage;
energy, high-tech, including semiconductor and electronics;
to transportation & mobility, aerospace and academic/
government sectors.
BIOVIA solutions create an unmatched environment for
creating and connecting biological, chemical and material
innovations. The industry-leading BIOVIA portfolio integrates
the diversity of science, experimental processes and
information and compliance requirements across research,
development, QA/QC (Quality Assurance and Quality Control)
and manufacturing. BIOVIA capabilities include:
(cid:125) Collaborative Science – faster discovery by leveraging multi-
disciplinary collaboration, modeling and simulation as well
as predictive science for the wet lab;
(cid:125) Unified Laboratory Management – harmonizing and
managing all of the resources required to conduct
experiments within a laboratory and then sharing that
information internally across the laboratories within an
organization and externally with a company’s partners;
(cid:125) Process Production Operations – providing real-time,
on-demand data access, analysis and
reporting of
manufacturing and process development data to make
manufacturing process outcomes more predictable;
(cid:125) Quality and Regulatory Management – supporting
regulatory and quality operations in life sciences and other
highly regulated industries.
BIOVIA’s vision is to allow organizations to collaborate more
effectively by managing and sharing information across the
value chain from research to commercialization, internally and
externally, with the supply chain and partners. By managing
and sharing information down to the molecular level, scientists
can better understand what is happening within a substance,
whether it is a chemical, a biological entity or a new material.
Integrating BIOVIA’s suite of scientific informatics solutions
with Dassault Systèmes’ 3DEXPERIENCE platform will create
significant opportunities for BIOVIA in terms of collaboration,
project management, data and content reuse, traceability
and other processes, applications and integrations that are
absolutely critical to science-driven industries.
Content and Simulation Applications
SIMULIA – Realistic Simulation
SIMULIA’s simulation software is used to perform realistic
virtual testing to improve the quality, reliability and safety
of their products. With its simulation software engineers
and designers are able to solve a wide array of challenging
problems – whether they are developing wind turbines,
trains, planes, automobiles, clothing, cellphones, computers
or medical devices; or researching earthquakes, volcanos and
oil and gas reservoirs; or even analyzing the behavior of the
human body.
In 2014, Dassault Systèmes launched The Living Heart project,
which leverages SIMULIA’s simulation technology. The project
unites
leading cardiovascular researchers and educators
with medical device manufacturers, regulatory agencies and
practicing cardiologists to develop and validate personalized,
digital human heart models. The goal is to evaluate virtual
testing paradigms – beginning with the insertion, placement
and performance of pacemaker leads and other cardiovascular
devices – to help bring personalized cardiac-patient care closer
to reality.
SIMULIA has also expanded its technology applications through
recent acquisitions to include design optimization, simulation
process automation, durability and fatigue, injection molding
analysis, and multibody dynamic simulation.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 21
1 Presentation of the Group
Business Activities
As an integral part of the Dassault Systèmes 3DEXPERIENCE
platform, SIMULIA applications accelerate the process of
evaluating the performance, reliability, and safety of materials
and products before committing to physical prototypes. The
Company’s global team of simulation experts helps customers
meet their education, research and development.
(cid:125) Finite Element Analysis (FEA): Enables users to create
virtual prototypes to analyze realistic physical performance
of products, materials and processes. Analysis capabilities
enable designers and engineers to evaluate and improve
products for linear and nonlinear stress, temperature
fluctuation, vibration, shock, crash, drop contact between
parts and more.
(cid:125) Computational Fluid Dynamics (CFD): Provides capabilities
to gain deeper understanding of how fluids and gasses flow
through or around products or systems, such as piping,
valves, and human blood vessels.
(cid:125) Multiphysics Simulation: Enables designers and engineers
to analyze two or more interacting physical phenomena
fluid-structure
within a virtual prototype such as:
interaction, structural-acoustics, thermal-electric, thermal-
fluid-mechanical, among others.
(cid:125) Plastic
Injection Simulation: Provides capabilities for
designers of injection molds and plastic parts to predict and
avoid manufacturing defects during the earliest stages of
part and mold design. It provides capabilities to simulate the
filling and packing phases, clamping forces for tools, and
cooling of molds and parts, as well as many others.
(cid:125) Durability and Fatigue: Enables users to analyze structural
failure and life expectancy due to repeated or random
loading cycles. It provides capabilities to analyze fatigue life
and crack locations in metals, elastomers and welded joints.
(cid:125) Multibody Dynamics: Provides capabilities for analyzing
dynamic performance of mechanical or mechatronic
system. It enables engineers to generate and solve virtual
3D models in order to predict and visualize motion, forces
and stresses including; high frequency transient analyses,
into the acoustic range and complex non-linear models with
flexible bodies and harsh shock contact.
(cid:125) Design Exploration and Optimization: Empowers designers
and engineers to automate the process to perform hundreds
of design trade-off studies of real-world behavior rapidly
using a full range of tools for advanced workflows and
optimization applications.
(cid:125) Simulation Process, Data, and Lifecycle Management:
Enables users to perform simulation and test data
management. Capabilities are provided for simplifying
the capture and deploy approved simulation methods,
automating standard simulation processes, collaborating on
performance-based decisions, and managing and securing
simulation-generated intellectual property.
DELMIA – Global Industrial Operations
An integral part of the Dassault Systèmes 3DEXPERIENCE
platform is the connection between the virtual and real worlds.
Operational excellence requires harmony across design,
production, distribution, human resources management and
processes. DELMIA enables to design and test products in a
simulated production environment, and then to plan, produce,
and manage resources and customer delivery.
DELMIA Digital Manufacturing solutions drive manufacturing
innovation and efficiency by digitally planning, simulating,
and modeling global production processes. DELMIA allows
manufacturers to virtually experience their entire factory
production. These simulation activities allow manufacturers
to better address and shift processes so as to quickly respond
to the competition, or to take advantage of new market
opportunities.
improve visibility
Moreover, DELMIA Manufacturing Operations Management
solutions help
into, control over and
synchronization across manufacturing operations and supply
chain processes on a global scale. The ending result is improved
agility and expanded continuous improvement across the
enterprise and extended global supply chain. Manufacturers
leverage DELMIA solutions to establish a common set of
operational processes that can be created, managed and
governed holistically.
Further, Quintiq Operation Planning and Optimization
solutions powers planning, scheduling and optimization for
complex processes across all planning horizons. It enables
customers to build on their competitive differentiators and
plan for profit by capturing their operational reality – down to
the last significant detail. Quintiq enables DELMIA customers
to integrate supply chain planning and optimization to plan
their workforce, manufacturing environment, and logistics
operations.
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Presentation of the Group
Business Activities
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(cid:125) Global Product Development: ENOVIA’s applications address
bill of materials management, change management,
multi-CAx management and systems engineering for
designers, product engineers, manufacturing professionals
and others collaborating on product development. These
products help eliminate costly product development errors
by enhancing collaborative product design, bill of material
management integration and IP asset management;
(cid:125) Strategic Supplier Relationships: ENOVIA’s applications
address supplier management, supplier quality, procurement
and sourcing and sampling. Its solutions help buyer agents,
supplier relationship managers and supplier representatives
manage their most critical business processes;
(cid:125) Quality and Compliance: ENOVIA’s applications support
Materials Compliance, Auditing, Document and Records
Management. These products help companies pro-actively
manage regulatory compliance as part of the product
development process;
(cid:125) IP Classification and Security: ENOVIA’s applications for IP
Classification and Security provide companies the flexibility
to collaborate on global scale while maintaining the security
required for operating their businesses.
3DEXCITE – Marketing in the Age of Experience
3DEXCITE software, solutions, and imagery services provide
high-end 3D visualizations in real-time. 3DEXCITE opens
up creative freedom to deliver emotional assets for digital,
interactive marketing, and sales experiences. From consulting
to workflow to final visualization assets, 3DEXCITE transforms
engineering data into powerful visual experiences which we
call engineered excitement.
(cid:125) Software: 3DEXCITE’s leading software applications and
technologies form the basis to create 3D visualizations for
all types of products with the highest visual quality – even
before they are built. Key products include:
3DVIA – Consumer Experience
3DVIA provides enterprises and consumers easy to use and
fun 3D space planning solutions and services that enable new
ways to make the best buying decisions.
For enterprises, 3DVIA Home offers home improvement
retailers and brand manufacturers an omnichannel space
planning solution to design the ideal kitchen, bathroom
or storage area. Retailers enjoy cost-effective high quality
leads, shortened sales cycle and greater sales productivity.
With 3DVIA Store, retailers test and optimize store design
concepts and adapt centralized merchandizing plans to meet
local store constraints. The result is a better in-store consumer
experience, greater store adherence to brand guidelines and
marketing campaigns and improved results.
For individuals, 3DVIA enables consumers to design and plan
home projects in a social way. Consumers can find inspiration
from thousands of other projects, build their own concepts
or simply visualize ideas quickly using dedicated room
configurators. Top designers’ and manufacturers’ products, as
well as thousands of generic furniture selections, colors and
materials empower users to fully customize their projects and
truly make them unique.
Social and Collaborative Applications
ENOVIA – Collaborative innovation
ENOVIA enables companies to bring together people,
processes, content and systems involved in product creation,
development, introduction and maintenance.
process
applications
ENOVIA offers a rich portfolio of collaborative enterprise
business
the
3DEXPERIENCE platform and facilitate business processes
interoperability in context of various information and data
authoring applications, such as CATIA, DELMIA, SIMULIA and
other Dassault Systèmes’ solutions.
complete
that
ENOVIA applications by business themes include:
(cid:125) quick & easy visualization: 3DEXCITE Bunkspeed;
(cid:125) Product Planning and Programs: ENOVIA’s applications for
Program and Project Management, Contract Management,
Design History File Management for regulatory compliance
address the needs for monitoring enterprise-wide critical
PLM business processes;
(cid:125) Strategic Customer Relationships: ENOVIA’s customer
relationship portfolio includes requirements management,
product
and
3DMerchandising solutions. These products help companies
transform from designing products to creating customer
experiences;
configurator,
Networking
Social
(cid:125) high-end 3D visualization: 3DEXCITE Deltagen, Deltaview,
Deltatex;
(cid:125) visual asset management: 3DEXCITE Picturebook,
Powerhouse.
Drawing on the innovative software applications, creative,
interactive solutions cover all aspects of the product lifecycle.
Solutions are structured along the four key disciplines of
Design, Development, Marketing, and Sales:
DASSAULT SYSTÈMES ANNUAL REPORT 2014 23
1 Presentation of the Group
Business Activities
(cid:125) 3DEXCITE Design Solutions enable a borderless workflow,
allowing designers to continuously review the geometry,
materials, and design throughout the creative process.
Dedicated tools and functions allow them to effectively
communicate their ideas in real-time, involving consumers
and decision-makers from the very start;
(cid:125) 3DEXCITE Development Solutions permit instant and
continuous visual and functional analysis, simulation,
and review of engineering work. Highly realistic 3D
visualizations allow testing of complex situations in real-
time, enriched by different types of simulation data,
leading to extensive cost and time savings;
(cid:125) 3DEXCITE Marketing Solutions create a seamless interplay
between design and marketing disciplines to accelerate
communication from early stages, taking internal awareness
of a new product to a new level. Global marketing teams
are only a mouse-click away from the latest visualizations
of future products, allowing them to fine-tune for local
requirements. Companies can plan launch events even
before the product is built – thanks to cross-channel
imagery productions based on 3D design data;
(cid:125) 3DEXCITE Sales Solutions provide the tools for a unique
product experience – whether at the Point of Sale (PoS),
at events, online, or on the go. Its integrated approach
intelligently uses source data created in earlier stages of
the product development process, helping to significantly
reduce the sales cycle and facilitating for customers their
decision process, from try to buy.
(cid:125) Computer Generated Imagery (“CGI”) services: Highest
visual quality, sophisticated artistic effects, and spellbinding
interactive experiences are what make the CGI services
portfolio so unique. The main categories of CGI services
include: Stills; Films and animations; Real-time interactive
visuals; and Data preparation.
Information Intelligence Applications
EXALEAD – Data in Business
EXALEAD has been helping organizations access, explore,
and analyze their most relevant information, delivering data
discovery applications that make sense of large volumes of
digital assets. Its breakthrough experiences, incorporating
the EXALEAD CloudView infrastructure, significantly enhance
customer interaction, digital asset management and machine
Big Data analysis (Internet of Things, or IoT).
(cid:125) Customer Interaction: Aggregate, visualize and analyze
information to better know and engage with customers.
With its 360-degree view of customers, EXALEAD OneCall
unlocks the value of data and information spread across
a company’s systems, freeing up call agents to engage
customers in ways previously not possible.
(cid:125) Digital Assets: Reveal existing
information spread
throughout the enterprise, capitalize on and reuse it.
EXALEAD OnePart quickly and efficiently discovers
digital assets (parts, assemblies, designs, and supporting
documentation), enabling reuse to accelerate product
time-to-market at lower cost and lower risk, leading to
duplicate part number avoidance and a significant reduction
of inventory. EXALEAD OnePart Reduce introduces a new
way to work, focused on classifying and deduplicating
existing parts, thus decreasing legacy parts, simplifying the
system, and cutting unnecessary costs tied up in stock.
(cid:125) Big Data Applications (IoT): Compile, analyze, and uncover
the value of system-generated data to create new services.
EXALEAD CloudView helps making sense of the invisible
for smart operational decision-making. The EXALEAD
CloudView search engine gathers, aligns and enriches
today’s distributed, diverse machine data. Leveraging
previously under-utilized information, CloudView provides
real-time operational reporting and analytics to accelerate
innovative new product development.
As part of the Information Intelligence quadrant of the
3DEXPERIENCE platform, EXALEAD’s advanced semantics
and analytics capabilities deliver information in context across
industries, anywhere, any time. Engineered for enterprise
and web delivery, EXALEAD helps users and decision
makers improve business processes and achieve competitive
advantage.
NETVIBES – Dashboard Intelligence
NETVIBES dashboard intelligence helps enterprises identify
and manage everything on real-time, personalized dashboards
designed to enable better, faster decision-making. All
employees can understand everything that matters across
all internal systems and across the social web, anywhere,
anytime, on any device – all in one place. NETVIBES also goes
beyond business intelligence with real-time, industry-specific
social analytics and SmartTagging for gathering expert
human opinions, and it helps users save time with automated
reporting and intelligent alerts on what matters, 24/7.
24 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
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Business Activities
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1.4.2.5
Sales and Marketing
The Company’s customers range from start-ups, small
and mid-sized companies to the largest companies in the
world as well as educational institutions and government
departments. To ensure sales and marketing coverage of all
its customers, the Company has developed three sales and
distribution channels, with sales teams combining individuals
with deep knowledge of their respective industries with brand
and domain specialists. No single customer or sales channel
partner represented more than 5% of the Company’s total
revenue in 2014 and 2013.
(cid:125) 3DS Business Transformation channel: sales to
large
companies and government entities are generally
conducted through the Company’s direct sales channel,
the 3DS Business Transformation channel. Direct sales
represented 58% and 56% of revenue in 2014 and 2013,
respectively.
(cid:125) 3DS Value Solutions channel: sales to small and mid-sized
companies are conducted indirectly generally through the
Company’s Value Solutions channel, a global network of
value-added resellers with Industry specialization. This
channel represented 23% and 24% of the Company’s
revenue in 2014 and 2013, respectively.
(cid:125) 3DS Professional channel: the 3DS Professional channel
is an indirect channel focused on the volume market. It
is comprised of a network of value-added resellers and
distributors worldwide providing sales,
local training,
services and support to customers. Sales through this
channel represented 19% and 20% of the Company’s total
revenue in 2014 and 2013, respectively.
In addition to its sales channels, the Company is actively
developing and expanding
relationships with system
integrators with industry and domain expertise.
1.4.2.6
Education Initiatives
Dassault Systèmes solutions are used in nearly 35,000 schools
around the world. An estimated 4 million students use the
Company’s solutions. Students that apply Dassault Systèmes
tools in school and in research are well prepared for their
future jobs and careers.
As the 3DEXPERIENCE leader in Science Technology Engineering
and Mathematics (STEM) education, Dassault Systèmes works
hand-in-hand with teachers all over the world to develop
innovative pedagogical curriculum and learning experiences
through enhanced teaching methods and 3D experiences,
which will contribute to the training for the engineers of
tomorrow. Dassault Systèmes is committed to help develop the
21st century global skill sets.
Dassault Systèmes is also one of the founders of key academic
associations such as the Global & European Engineering
Deans Councils, the International Federation of Engineering
Education Societies or the Cartagena Network of Engineering.
1.4.2.7
Competition
its current product portfolio, diversifying
The Company operates in a highly-competitive marketplace.
As it continues to broaden its addressable market, by
expanding
its
client base in new sectors of activity, and developing new
applications and markets, the Company faces an increasing
level of competition, from new competitors ranging from
technology start-ups to the largest technology companies in
the world. The Company’s competitors generally compete
with it in specific areas of its portfolio or in a specific set of
industries, but due to the breadth of the Company’s activities,
no single company competes with it across its entire scope.
The Company’s competitors include Siemens PLM Software
(a business unit of Siemens Industry Automation Division),
PTC Inc. and Autodesk Inc. (principally with respect to
the Company’s SOLIDWORKS product line) who generally
compete with it on a worldwide basis. Competitors also
include companies focusing on specific domains or industries,
including among others Oracle and SAP with respect to
ENOVIA, DELMIA and Quintinq software applications and
Altair Engineering, ANSYS Inc., and MSC Software, among
others, with respect to SIMULIA software applications.
In the Company’s overall addressable market, additional
software developers competing with the Company in specific
applications or industries include, among others, Adobe,
Autonomy (owned by Hewlett Packard), Aveva, Bentley,
Intergraph (owned by Hexagon AB), Microsoft, Nemetschek
AG, Right Hemisphere (owned by SAP), and other software
companies in the mining sector or offering information
intelligence and social enterprise innovation and collaboration
software capabilities, and developers in all areas of molecular
optimizing processes or digital
chemistry or biology,
marketing.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 25
1 Presentation of the Group
Research and Development
1.4.3 Material Contracts
Other than contracts entered into in the ordinary course of
business, the Company’s material contracts are principally
the distribution agreements with its value-added resellers, as
described in paragraph 1.4.2.5 “Sales and Marketing”, and the
strategic partnership contracts described in paragraph 1.4.1.4
“Technology” (see “Technology and Software Partners”).
In 2011 Dassault Systèmes announced its investment in
Outscale, a start-up to provide Cloud operator services, and
signed an agreement to use these services.
In June 2013, the Company entered into a term loan facility
agreement for €350 million, which will be repaid in July 2019.
See paragraph 3.1.4 “Capital Resources” and Note 20 to the
consolidated financial statements.
The Company signed long-term leases (for 12 years) for its
corporate headquarters in Vélizy-Villacoublay, France (the 3DS
Paris Campus) in 2008 and for its offices, technology lab and
data center in Waltham, outside Boston, United States (the 3DS
Boston Campus) in 2010. In February 2013, the Company has
committed to lease an additional 13,000 square meters of
office space and to enter into a new lease for its headquarters
facilities for a non-cancelable initial term of 10 years which will
take effect during the first quarter of 2017 when construction
is expected to be completed. See paragraph 1.6.2.3 “Liquidity
Risk” and Note 25 to the consolidated financial statements.
1.5 Research and Development
1.5.1 Overview
At December 31, 2014, the Company’s R&D teams included
5,562 personnel, compared to 4,774 at year-end 2013,
representing approximately 42% of the Company’s total
headcount. The Company increased its total R&D headcount
by 16.5% in 2014 and by 8% in 2013, principally reflecting
growth in R&D resources through acquisitions for both periods.
The Company has research facilities located primarily in
France, the United States and Germany, as well as in India, the
United Kingdom, Malaysia, Poland, Netherlands, Australia,
and Canada.
R&D expenses totaled €409.7 million for 2014, compared to
€375.5 million for 2013, increasing 9.2%, or approximately
11% excluding net positive currency effects. R&D costs
benefited from government grants and other governmental
programs supporting R&D of €43.1 million in 2014 and
€27.4 million in 2013. These government grants include
research and development tax credits received in France.
The Company’s R&D is conducted in close cooperation with
users and customers in their respective industries to develop
a deeper understanding of the unique business processes of
these industries as well as the future product directions and
requirements of its users and customers.
1.5.2
Intellectual Property
its technology by applying a
The Company protects
combination of IP rights
including copyrights, patents,
trademarks and trade secrets. The Company distributes its
software products to its customers under licenses that grant
software utilization rights and not ownership rights. The
contracts contain various provisions protecting the Company’s
IP rights over its technology, as well as related confidentiality
rights.
26 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Presentation of the Group
Risk factors
1
1
The source code (set of instructions under an intelligible
form, and used, once compiled, to generate the object code
licensed to clients and partners) of the Company’s products is
protected both as a copyrighted work and as a trade secret. In
addition, some of the key capabilities of its software products
are protected through patents whenever possible.
However, no assurance can be given that others will not copy
or otherwise obtain and/or use the Company’s products
or technology without authorization. In addition, effective
copyright, trade secret, trademark and patent protection or
enforcement may be unavailable or limited in certain countries.
The Company is nevertheless engaged in an active policy
against piracy and takes systematic measures to prevent
the illegal use and distribution of its products, ranging from
regularizing illegal use to initiating legal proceedings.
With regard to trademarks, the Company’s policy is to register
trademarks for its principal products and services in the
countries where it does business. Such registrations are a
combination of international trademark, European Community
trademarks and/or national registrations.
In order to protect its technology and key product capabilities,
the Company generally files patent applications in countries
where many of its main customers and competitors are
located. At year-end 2014, the Company’s portfolio comprised
326 protected inventions, including 49 new inventions in
2014. Patents have been granted in one or more countries for
more than half these inventions, and patents for the others are
pending. When a patent filing is deemed unsuitable, certain
inventions are kept secret, with the proof of creation being
saved. The Company also has a cross-license policy for patents
with major players in its industry. The acquisition of Accelrys
increased the portfolio of around a hundred additional patents,
in addition to the figures mentioned hereinbefore.
See paragraph 1.6.1 “Risks Related to the Company’s
Business”, and particularly paragraph 1.6.1.2 “Challenges to
the Company’s Intellectual Property Rights” for the difficulties
in ensuring adequate protection for the Company’s own
intellectual property, and paragraph 1.6.1.10 “Infringement
of Third-Party Intellectual Property Rights and Licensing
of Third-Party Technology” for risks concerning possible
third-party allegations of unauthorized use of their intellectual
property.
1.6 Risk factors
The Risk Factors are set out hereafter in two main categories:
risks related to the Group’s Business (1.6.1) and financial and
market risks (1.6.2). These are the main risks identified as
being material, relevant and liable to have a negative impact
on the Company’s business and financial position as of the
date on which this Annual Report (Document de référence)
was filed with the AMF. However, other risks not mentioned
or not yet identified can affect the Company, its financial
position, its reputation, its outlook or the share price of
Dassault Systèmes SA.
1.6.1 Risks Related to the Company’s Business
1.6.1.1 Uncertain Global Economic
Environment
In light of the continuing uncertainties regarding economic,
business, social and geopolitical conditions at the global level,
the Company’s revenue, net earnings and cash flows may
grow more slowly, whether on an annual or quarterly basis,
mainly due to the following factors:
(cid:125) the deployment of the Company’s solutions may represent
a large portion of a customer’s investments in software
technology. Decisions to make such an investment are
impacted by the economic environments in which the
customers operate. Uncertain global economic conditions
and the lack of visibility or the lack of financial resources
may cause some customers to reduce, postpone or terminate
their investments, or to reduce or not to renew ongoing paid
maintenance for their installed base. Such situations may
impact the Company’s revenues;
(cid:125) the automotive and industrial equipment industries, which
represent a significant part of the Company’s revenue,
have been and will continue to be impacted by the current
economic context, just as other industry sectors such as
mining, energy or construction;
(cid:125) the sales cycle of the Company’s products – already relatively
long due to the strategic nature of such investments for
customers – could further lengthen due to the uncertain
global economic context; and
DASSAULT SYSTÈMES ANNUAL REPORT 2014 27
1 Presentation of the Group
Risk factors
(cid:125) the political, economic and monetary situation in certain
geographic regions where the Company operates could
continue to deteriorate.
The Company makes every effort to take into consideration this
uncertain macroeconomic outlook. The Company’s business
results, however, may not develop as anticipated. Furthermore,
due to factors affecting sales of the Company’s products and
services as described above, there may be a substantial time
lag between an improvement in global economic and business
conditions and an upswing in the Company’s business results.
The current economic context may also adversely impact the
financial situation or financing capabilities of the Company’s
potential and existing customers, reseller network and
technology partners, some of whom may be forced to cease
operations due to cash flow and profitability issues. The
Company’s ability to collect outstanding receivables may be
affected. In addition, the uncertain economic environment
could generate increased price pressure, as customers seek
lower prices from various competitors, which could negatively
impact the Company’s revenue, financial performance and
market position.
Finally, given public debt challenges, an increase in tax
pressure resulting from either the modification of current
tax structures, the creation of new taxes or more aggressive
positions taken by tax administrations could have a negative
effect on the Company’s business results.
To limit the impact of the economic environment on its
business and financial results, the Company continues to
further diversify its customer base through expanding its
presence in new business sectors and new geographic markets
(see paragraph 3.1.2 “Consolidated
Information: 2014
Compared to 2013” for the breakdown of consolidated Group
revenue by geographic region). It also continues to ensure that
its costs are controlled for the entire organization.
1.6.1.2
Challenges to the Company’s
Intellectual Property Rights
is heavily dependent upon
its
The Company’s success
proprietary software technology. The Company relies on a
combination of copyright, patent, trademark, trade secret law
and contractual restrictions to protect the proprietary aspects
of its technology. These legal protections don’t provide a full
coverage of the Company’s products and can be breached
by third parties. In addition, effective copyright, patent,
trademark and trade secret protection may be unavailable or
limited in certain countries where IP rights are less protected
than in the United States or Western Europe. If, despite the
Company’s strategies for protecting its IP, certain third-parties
are able to develop similar technology, a reduction in the
Company’s software revenues may result. Furthermore,
although the Company entered into confidentiality and license
its employees, distributors, customers
agreements with
and potential customers, and limits access to and carefully
controls the distribution of its software, documentation
and other proprietary
information, the measures taken
may be inappropriate to deter misappropriation or prevent
independent third-party development of the Company’s
technology.
In addition, like most of its competitors, the Company faces
a significant level of piracy of its leading products, by both
individuals and groups acting worldwide, which could
potentially affect the Company’s growth in specific markets.
Litigation may be necessary to enforce the Company’s IP
rights and determine the validity and scope of the proprietary
rights of third-parties. Any litigation could result in substantial
costs and diversion of Company resources and could seriously
harm the Company’s operating results. The Company may not
prevail in any such litigation and its IP rights may be found
invalid or unenforceable.
In order to protect its IP, the Company regularly registers
patents for its most advanced innovations and systematically
registers copyrights. The Company continues to extend its
anti-piracy strategy, which is proving effective.
1.6.1.3
Product Errors, Defects
and Installation Problems
Sophisticated software often contains errors, defects or other
performance problems when first introduced or when new
versions or enhancements are released. If the Company is not
able to correct in a timely manner errors or defects discovered in
its current or future products or provide an adequate response
to its customers, the Company may need to expend significant
financial, technical and management resources, or divert some
of its development resources, to resolve or work around those
defects. The Company may also incur an increase in its service
and warranty costs.
in the
Errors, defects or other performance problems
Company’s products may also result in the loss of, or delay
in, the market acceptance of its products or postponement
of customer deployment. Such difficulties could also cause
the Company to lose customers and, particularly in the
case of its largest customers, the potentially substantial
associated revenues which would have been generated by
its sales to companies participating in the customer’s supply
chain. Technical problems, or the loss of a customer with a
particularly important global reputation, could also damage
the Company’s own business reputation and cause the loss of
new business opportunities.
28 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Presentation of the Group
Risk factors
1
1
Finally, the Company could experience problems in installing
complex solutions with certain customers as a result of the
customer’s infrastructure and software environment.
Because product errors, defects or installation problems could
result in significant financial or other damage to its customers,
such customers could pursue claims against the Company.
A product liability claim brought against Dassault Systèmes,
even if not successful, would likely be time consuming for its
management and costly to defend and could adversely affect
the Company’s marketing efforts.
To reduce the risk of product errors or defects, the Company
carries out advanced testing of its new products, releases, and
versions prior to market launch. The Company also works as
closely as possible with its customers to ensure successful
product installation.
The Company has also subscribed to an “Errors & Omissions”
insurance policy covering possible defects in its products,
although insurance carried by the Company may only
partially offset the cost of correcting significant errors
(see paragraph 1.6.3 “Insurance”).
1.6.1.4
Currency Fluctuations
The Company’s results of operations have been affected by
changes and high volatility in exchange rates in 2014, and are
likely to be affected again in the future. In particular, exchange
rate fluctuation of the Japanese yen or of the U.S. dollar relative
to the euro, can impact revenues and expenses recorded in the
Company’s statement of income upon translation of other
currencies into euro.
The Company bills its customers in major currencies, principally
euros, U.S. dollars and Japanese yen. The Company also incurs
expenses in different currencies, principally euros, U.S. dollars
and Japanese yen, depending on the Company’s employees
and suppliers location in different countries. Moreover, the
Company engages in mergers and acquisitions, particularly
outside the euro zone and may lend money in different
currencies to its wholly or partially owned subsidiaries
or affiliates.
Although the Company currently benefits from a natural
coverage of most of its exposure to U.S. dollars from an
operating margin perspective, the loss of revenue if the euro
regains strength against the dollar may still negatively impact
the Company’s operating income, net income and earnings
per share. In addition, the Company’s revenues denominated
in Japanese yen, Korean won and British pound substantially
outweigh its expenditures in these currencies. As a result,
the Company’s financial results are exposed to a potential
depreciation in the value of these currencies – in particular
the Japanese yen – relative to the euro, which could adversely
affect the Company’s revenue, as well as its operating income,
operating margin, net income and earnings per share.
The Company’s net financial revenue can also be significantly
affected by changes in exchange rates between the time the
revenue is recognized and when cash payments are received,
and between the time an expense is recorded and when it is
paid. Any such differences are accounted for in the “foreign
exchange gain/loss” caption of the Company’s financial
statements.
The main items of financial income subject to fluctuations
linked to exchange rates are:
(cid:125) the difference between the exchange rate used to record
invoices in foreign currencies and the exchange rate when
the Company receives or makes the payment; and
(cid:125) the
revaluation of monetary assets and
liabilities
denominated in foreign currencies.
To address the risks created by currency fluctuations, the
Company carries out hedging operations on a case-by-case
basis (see Note 21 to the consolidated financial statements).
Since market growth rates for the Company’s software
applications and the revenue growth rates of its significant
competitors are computed in U.S. dollars, such growth rates
from period to period may not be comparable to the Company’s
euro-computed revenue growth rates for the same periods.
Finally, in spite of less stress on sovereign debt and financial
institutions, the Company continues to maintain a strengthened
review of the quality of its investments and remains vigilant as
to the liquidity of its assets (see paragraphs 1.6.2.3 “Liquidity
Risk” and 1.6.2.4 “Credit or Counterparty Risk”).
1.6.1.5
Security of Internal Systems
and Facilities
The Company’s R&D facilities are computer-based and rely
entirely on the proper functioning of complex software and
integrated hardware systems. However, it is not possible
to guarantee the uninterrupted operation and complete
security of these systems. For example, the invasion of the
Company’s computer-based systems by either computer
hackers or industrial pirates could interfere with their proper
functioning and cause substantial damage, loss of data or
delays in on-going R&D activities. Computer viruses, whether
deliberately or unintentionally introduced, could also cause
similar damage, loss or delays. The increasing use of mobile
devices (cellular telephones and portable computers) linked to
certain of the Company’s computer systems tends to increase
the risk of unauthorized access as a result of their loss or theft.
In addition, because the Company’s key facilities are located
in a limited number of sites, including Japan and California,
which may be exposed to earthquakes, substantial physical
damage to any one of the Company sites, by natural causes or
by attack or local violence, could materially reduce its ability to
continue its normal business operations.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 29
1 Presentation of the Group
Risk factors
If any of these circumstances were to arise, the resulting
damage, loss or delays could have a material negative impact
on the Company’s business, results of operations and financial
condition.
In order to reduce this risk, the Company therefore maintains
an IT security framework, including intrusion protection, data
storage back-up and restricted access to critical and sensitive
information, and also subscribes to insurance policies covering
these risks (see paragraph 1.6.3 “Insurance”).
1.6.1.6 Market introduction of a New Services
Offering for Cloud Computing
Dassault Systèmes is developing and distributing a services
offering for the online use of certain of its products (SaaS)
based on a cloud computing infrastructure. It continues to
grow its portfolio of software solutions and processes available
on the cloud. As a result, Dassault Systèmes manages data
hosting on behalf of its customers and therefore has increased
responsibility toward its clients, particularly with respect to
uninterrupted access to online service and confidentiality of
hosted data.
The progressive roll out of these services and their
distribution also involves the deployment of new support and
management processes (for example, processing orders and
billing). The Company will also become exposed to a complex
legal environment and could have increased risk regarding
regulatory compliance in the countries where it has operations.
In case of difficulties in providing its clients with online services
under appropriate conditions, the Company’s revenues,
results of operations and competitive position, as well as the
reputation of Dassault Systèmes, could be negatively affected.
The Company is seeking to minimize these risks by developing
alliances with partners with recognized technical capabilities,
and by simulating and controlling, to the extent possible, the
technical, legal, and financial consequences of processes put
in place to serve its customers.
1.6.1.7
Legal Proceedings
As a result of its business activity, the Company is subject to a
variety of claims and lawsuits. The Company’s risk of litigation
and administrative proceedings increases as it expands its
activities, enhances its position and visibility on the software
market, develops new approaches to its business (product
distribution and online services) and as the legal and tax
regulations with which it must comply grow increasingly more
complex. Litigation can be lengthy, expensive, and disruptive
to the management of Company operations. Results cannot
be predicted with certainty, and adverse outcomes in some
or all of the claims pending against the Company may result
in significant monetary damages or injunctive relief against
the Company that could adversely affect its ability to conduct
business. Actual outcomes of litigation and other claims may
differ from management expectations, which could result in a
material adverse impact on the Company’s financial position
and results of operations.
The Company’s legal department, assisted by technical
experts, monitors on a regular basis all outstanding claims
and litigations (see also paragraph 4.3 “Legal and Arbitration
Proceedings” and Note 25 to the consolidated financial
statements), some of which may be covered by insurance
(see paragraph 1.6.3 “Insurance”).
1.6.1.8
Competition and Pricing Pressure
In the past few years, there have been fewer contenders in
the Company’s historical software markets, which may lead
to the adoption by competitors of business models different
from Dassault Systèmes’ model and thus a substantial
decline in pricing which could require the Company to adapt
to a substantially different commercial environment. These
competitive pricing pressures could cause competitive wins
by competitors and could negatively impact the Company’s
revenue, financial performance and market position.
In addition, by regularly expanding its product portfolio,
entering new geographic markets, diversifying its client base
in new sectors of activity, and developing new applications for
its products, the Company encounters new competitors. Such
competitors could have, as a result of their size or prior presence
in these markets, financial, human or technological resources
not readily available to the Company. The development of
cloud computing offers may also lead to new contenders
entering the market. The Company’s ability to expand its
competitive position may thus be reduced.
In the event the Company has difficulties setting up the
infrastructures needed to manage its businesses and the
new competitive context, the revenues, results of operations,
competitive position and reputation of Dassault Systèmes
could be negatively impacted.
1.6.1.9 Difficulties in Relationships
with Extended Enterprise Partners
The Company’s 3DEXPERIENCE strategy requires a fully
integrated platform with access to computer-aided design
(“CAD”), simulation and manufacturing and data management
products, which are
increasingly complex and whose
installation at the customer represents significant enterprise
projects. To implement its 3DEXPERIENCE strategy, Dassault
30 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Presentation of the Group
Risk factors
1
Systèmes has developed an extended enterprise model and
partners with other companies in areas such as:
be brought, regardless of its merits. If the Company fails to
prevail in IP litigation, it may be required to:
(cid:125) computer hardware and technology, to maximize benefits
(cid:125) cease making, licensing or using the products or services
from available technology;
that incorporate the challenged IP;
1
(cid:125) product development, to enable software developers to
create and market their own software applications using
Dassault Systèmes’ open product architecture; and
(cid:125) obtain and pay for licenses from the holder of the infringed
IP right, which might not be available on acceptable terms
for Dassault Systèmes, if at all; or
(cid:125) consulting and services, to support and accompany
customers as needed to deploy 3DEXPERIENCE .
The Company believes that its partnering strategy allows it
to benefit from complementary resources and skills and to
reduce costs while achieving broader market coverage. The
Company’s broad partnering strategy nevertheless creates a
degree of dependency on such partners.
The Company’s ability to establish partner relationships
for the development and deployment of its 3DEXPERIENCE
platform is an important element of its strategy.
Serious difficulties in the Company’s relationships with its
partners, or an unfavorable change of control of these partners,
may adversely affect the Company’s product and business
development, and could cause it to lose the contribution of
the employees or contractors of the Company’s partners,
particularly in the area of R&D. In addition, any failure by the
Company’s partners to deliver products of quality or according
to the expected timing may cause delays in the delivery of, or
deficiencies in, the Company’s own products.
In addition to its own sales force, the Company also relies
on an international network of distributors and value-added
resellers. The type of relationship that the Company has
with its distributors and value-added resellers as well as their
financial and technical reliability could impact the Company’s
ability to sell and deploy its product and services offering.
Due to the rapid evolution of the software development
and distribution sectors, it is difficult to ensure the long-
term success of the relationship with any particular partner.
However, whenever entering into a relationship with a new
partner, the Company carefully considers the potential new
partner’s technical and financial viability.
1.6.1.10
Infringement of Third-Party
Intellectual Property Rights and
Licensing of Third-Party Technology
Third-parties, including the Company’s competitors, may
own or obtain copyrights, patents or other proprietary rights
that could restrict the Company’s ability to further develop,
use, or sell its own product portfolio. Dassault Systèmes has
received, and may in the future receive, letters of complaint
alleging that its products infringe the patents and other IP
rights of others. Such claims could cause the Company to incur
substantial costs to defend itself in any litigation which may
(cid:125) redesign its products, which could involve substantial costs
and require the Company to interrupt product licensing and
product releases, or which may not be feasible at all.
In addition, the Company embeds in its products an increasing
number of third-party components selected either by the
Company itself or by companies which it acquires over time.
Although Dassault Systèmes has implemented strict approval
processes to certify the originality of third-party components
and verify any corresponding licensing terms, the same
approval processes may not have been adopted by companies
acquired by Dassault Systèmes before their acquisition. As a
result, the use of third-party embedded components in the
Company’s products generates exposure to the risk that a
third-party will claim that these components infringe their IP
rights. Also, due to the use of third-party components, there
is also a risk that such license(s) might expire or terminate
without renewal, thereby affecting certain Company products.
If any of the above situations were to occur for a significant
product, it could have a material adverse impact on the
Company’s financial condition and results of operations.
The Company seeks to limit this risk through a process for
certifying the origins of its products with respect to IP before
making them available for sale.
1.6.1.11 Organizational and Management
Challenges Arising from the Evolution
of the Company
through
its addressable market
Dassault Systèmes has continued to expand through
acquisitions and internal development, and has substantially
launching
increased
3DEXPERIENCE. The Company’s management policies and
internal systems must be adapted on an on-going basis
to meet the needs of a larger, more complex structure and
implement the Company’s strategy to reach a broader market.
The Company must also continue to reorganize itself to
maintain efficiency, while ensuring customer retention and
the integration of newly acquired companies. If the Company
does not address these issues effectively and on a timely basis,
the Company’s product development, internal processes, cost
management and commercial operations could be impacted
or fail to satisfy adequately market or customer demands,
which could negatively impact its financial or operational
performances.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 31
1 Presentation of the Group
Risk factors
In addition, in order to realize acquisitions or investments,
the Company may use significant financial resources, make
potentially dilutive issuances of equity securities or incur debt.
Moreover, these operations may require the Company to
recognize amortization of acquired intangible assets and/or
depreciation of goodwill in case of impairment (see Note 2
to the consolidated financial statements). Minority interests
in unaffiliated partners or other investments may also have
to be written down in the Company accounts as a result of
impairment. Acquired companies may also carry risks related
to commitments or contingent liabilities, including litigation
risk related to pre-acquisition events (for example, see above
the risk of claims that embedded components violate third-
party IP rights). Each of these potential consequences of
an investment or acquisition could reduce the Company’s
operating margin, cash, or net income.
The Company seeks to adjust on a regular basis its organization
and management model to support its current level of
growth by enhancing its geographic-based organization and
constantly improving the productivity of its sales force in order
to serve its customers in close proximity to their local markets.
1.6.1.12 Retention of Key Personnel
and Executives
The Company’s success depends to a significant extent upon
the continued service of its key managers and highly qualified
personnel, in particular in R&D, technical support and sales
management, and on its ability to continue to attract, retain
and motivate qualified personnel as well as keep their skills
continuously up to date in line with the organizational needs.
In particular, if the Company fails to hire on a timely basis
and retain highly skilled sales forces, revenue may grow
more slowly. The competition for such employees is intense,
and if the Company loses the ability to hire and retain key
employees and executives with a diversity and high level of
skills in appropriate domains (such as R&D and sales), it could
have a material adverse impact on its business activities and
operating results. The Company does not maintain insurance
with respect to the loss of key personnel.
In order to limit this risk, the Company has put in place training,
career development and long-term compensation incentives
to attract and retain key personnel and executives, and has
also diversified its R&D resources in different regions of the
world. The identification of key personnel also constitutes an
important step in the process of integrating newly acquired
companies into the Company.
1.6.1.13 Complex International Regulatory
Environment
The Group’s acquisitions help it extend its geographic footprint
by strengthening its position in countries where it previously
had not been, or had only marginally been present until now,
through increasing the breadth of its business, the diversity
of its customers (particularly individuals). Due to these factors
and to its listing on the French stock exchange, the Company
is subject to complex and rapidly evolving laws, regulations
and requirements. The complex laws and regulations to
which the Company is subject apply to general business
practices, competitive practices, handling of personal data,
consumer protection, financial reporting standards, corporate
governance, internal controls, local and international tax
regulations and export compliance for high-tech products.
The Company seeks to have fully compliant practices
and requires its subsidiaries to respect the regulations of
the countries where they have activities. The failure or
suspected failure to comply with any of these regulations
may result in increased regulatory scrutiny through inquiries
or investigations, adverse media attention and fines and
sanctions, as well as an increase to the Company’s litigation
risk or limits on the Company’s business operations. A
number of these adverse consequences could occur even if
it is ultimately determined that there has been no failure to
comply. There can be no assurance that additional regulation
in any of the jurisdictions in which the Company currently
operates, or may operate in the future, would not significantly
increase the cost of regulatory compliance. Furthermore, the
focus on tax matters is rapidly increasing in many countries
where the Company has operations.
In order to reduce this risk, personnel within the financial and
legal departments attend regular training to stay abreast of
regulatory or related issues. Moreover the Company audits
its subsidiaries in the world on a regular basis and consults
outside experts to validate the compliance of some of its
practices and the compliance with the applicable regulations.
1.6.1.14 Rapidly Changing and Complex
Technologies
PLM solutions are characterized by the use of rapidly changing
technologies and frequent new product introductions or
enhancements. These solutions must address complex
engineering needs in various areas of product design, simulation
and manufacturing, and must also meet sophisticated process
requirements in the areas of change management, industrial
collaboration and cross-enterprise work.
32 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
As a result, the Company’s success is highly dependent upon
its ability to:
(cid:125) understand its customers’ complex needs in different
business sectors, and support them in reengineering key
product lifecycle processes and managing the migration of
substantial amounts of data;
(cid:125) enhance its existing solutions by developing more advanced
technologies;
(cid:125) anticipate and take timely advantage of quickly evolving
technologies; and
(cid:125) introduce new solutions in a cost-competitive and timely
manner.
The Company also continues to face the challenge of the
increasingly complex integration of its products’ different
functionalities to address customers’ requirements. As a
result, more difficult industrialization work is required for new
releases and offerings, with limitations on the options for
interfacing with third-party systems installed at the customer.
In addition, if the Company is not successful in anticipating
leaps and developing new solutions and
technological
services that address its customers’ increasingly sophisticated
expectations, demand for its products could decline, and the
Company’s results of operations and financial condition could
be negatively affected.
To reduce this risk and keep abreast or ahead of technological
developments which may affect its products, the Company
commits substantial resources to the development of new
offerings. It also maintains close and regular contacts with its
key customers to identify and capture their emerging needs
and to offer the most adapted solutions. In addition, the
Company provides training courses to its R&D teams on new
technologies. Complementing its internal R&D, the Company
seeks to maintain an active monitoring of third-party
technologies that it might acquire to improve its technology
offerings where appropriate.
1.6.1.15 Variability in Quarterly Operating
Results
The Company’s quarterly operating results have in the past
varied significantly, and may vary significantly in the future,
depending on factors such as:
(cid:125) the timing and cyclical nature of revenues received due
to the signing of important new customer orders, the
completion of major service contracts or the completion of
customer deployments;
Presentation of the Group
Risk factors
1
(cid:125) the timing of any significant acquisitions or divestitures;
(cid:125) fluctuations in foreign currency exchange rates;
(cid:125) the Company’s ability to develop, introduce and market new
and enhanced versions of its products and customer order
deferrals in anticipation of these new or enhanced products;
1
(cid:125) the number,
significance of product
enhancements or new products that the Company develops
or that are released by its competitors; and
timing and
(cid:125) general conditions in the Company’s software markets, the
software industry generally and computer industries and
regional economies.
A substantial portion of the Company’s orders and shipments
typically occurs in the last month of each quarter and
therefore, if any delay occurs in the timing of the order, the
Company may experience significant quarterly fluctuations
in its results of operations. Additionally, as is typical in the
software applications industry, the Company has historically
experienced its highest licensing activity for the year during
the last quarter of the year. Delays in orders and shipments
can also affect the Company’s revenue and income.
The trading price of the Dassault Systèmes’ shares may be
subject to wide fluctuations in response to quarterly variations
in the Company’s operating results and the operating results
of other software applications developers in the Company’s
markets.
1.6.1.16 Technology Stock Volatility
Under conditions of increased market uncertainty, the trading
price of the Company’s shares could be volatile. The market
for shares of technology companies has in the past been more
volatile than the stock market overall.
1.6.1.17 Shareholder Base
Groupe Industriel Marcel Dassault SAS (“GIMD”), which
represents the interests of some of the Company’s founding
shareholders, owned 41.11% of the Company’s outstanding
shares, representing 55.7 4% of the exercisable voting rights
(55.04% of theoretical rights) as of December 31, 2014. As
more fully described in paragraph 6.3 “Information about
the Shareholders”, GIMD plays a decisive role with respect
to matters submitted to shareholders, including the election
and removal of directors and the approval of any merger,
consolidation or sale of all or substantially all of the Company’s
assets.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 33
1 Presentation of the Group
Risk factors
1.6.2 Financial and Market Risks
The Company’s overall risk management policy is based upon
the prudent management of the Company’s market risks,
primarily interest rate risk and foreign currency exchange risk.
The Company’s programs with respect to the management
of these risks, including the use of hedging instruments, are
discussed in Note 21 to the consolidated financial statements.
The Company’s exposure to these risks may change over
time and there can be no assurance that the benefits of the
Company’s risk management policies will exceed the related
costs. Such changes could have a materially adverse impact on
the Company’s financial results.
1.6.2.1
Interest Rate Risk
The Company generates positive cash flows from operations
and has financial obligations (e.g., bank loans, loan facilities,
employee profit-sharing), but the Company’s cash position net
of debt is positive throughout the year. The Company’s cash
surplus generally earns interest at fixed or floating market
rates, while the Company’s debt carries interest at floating
rates. Therefore, the Company’s interest rate risk is primarily
related to a reduction of financial revenue. See Note 21 to the
consolidated financial statements.
1.6.2.2
Foreign Currency Risk
See Note 21 to the consolidated financial statements and
paragraph 1.6.1.4 “Currency Fluctuations” above.
1.6.2.3
Liquidity Risk
The Company generates positive cash flow from operations.
The Company has financial obligations (such as bank loans,
loan facilities and employee profit-sharing), but has a positive
net financial position throughout the year. The Company
thus has a low liquidity risk. As of December 31, 2014, the
Company’s cash, cash equivalents and short-term investments
totaled €1.18 billion. See Note 12 to the consolidated financial
statements.
The Company has analyzed the amounts it will be required
to pay under its contractual commitments at December 31,
2014. The Company believes that it will be able to meet such
obligations.
The following table summarizes the Company’s principal
contractual obligations to make future payments as of
December 31, 2014.
CONTRACTUAL OBLIGATIONS
(in thousands of euros)
Operating lease obligations(1)
Loan facilities(2)
Employee profit-sharing
TOTAL
Less than
1 year
70,282
15,186
55,451
Payments due by period
1-3 years
129,751
10,365
-
3-5 years
107,915
358,196
-
More than
5 years
231,199
-
-
140,919
140,116
466,111
231,199
Total
539,147
383,747
55,451
978,345
(1) Including €272.8 million of future minimum rental payments for the Company’s headquarters facilities located in Vélizy-Villacoublay, France and €102.8 million of future
minimum rental payments for the American subsidiaries’ facilities located in Waltham near Boston, United States (see Note 25 to the consolidated financial statements).
(2) Including interest on the €350 million term loan facility and on the Japanese loan facility (see Note 20 to the consolidated financial statements).
1.6.2.4
Credit or Counterparty Risk
1.6.2.5
Equity Risk
include principally
The financial instruments which could expose the Company
to credit risk
its cash equivalents,
short-term
investments and customer receivables. The
hedging agreements entered into with financial institutions
pursuant to its policy for managing currency and interest rate
risks also expose the Company to credit and counterparty
risk. See Notes 12, 13 and 21 to the consolidated financial
statements. The Company uses a rigorous selection process
for its counterparts according to credit quality, based on
several criteria including agency ratings and depending on the
maturity dates of the transactions.
For cash management purposes, the Company does not
directly invest in listed shares, or any material amounts
in funds invested primarily in or indexed to stocks. The
Company’s financial results are therefore not significantly and
directly linked to stock market variations.
34 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
1.6.3
Insurance
Presentation of the Group
Risk factors
1
1
Dassault Systèmes is insured by several insurance companies
for all significant risks. Most of these risks are covered
either by insurance policies underwritten in France for the
whole Group, or by a North American policy that covers all
the North American subsidiaries and their own subsidiaries
and branches around the world. In addition, the Company
subscribes to specific coverage and/or local policies to comply
with applicable local regulations or to meet the specific needs
of certain activities or projects.
All of the Group’s companies are protected by a civil
and product liability policy for a total insured amount of
€30 million for 2014. A policy also covers the operating
liability of Dassault Systèmes SA and its French and foreign
subsidiaries (other than those covered by the North American
program) for a total insured amount of €30 million for 2014.
In 2014, the Group renewed its Directors and Officer’s Liability
Policy for Dassault Systèmes SA and its subsidiaries, for a total
insured amount of €50 million.
The Company also carries insurance to cover computer risks in
an amount equal to the value of its computer equipment and
coverage for damage to goods.
Based on the legal requirements applicable in each country,
the North American companies and most of their subsidiaries
have specific insurance cover. This insurance includes in
particular coverage for damage to goods, computer risks, loss
of business and operational civil liability and professional
liability. In connection with this insurance, the Company
also has coverage for work-related accidents and automobile
accidents. As additional coverage for the various insurance
policies covering the North American companies and their
subsidiaries, Dassault Systèmes carries an umbrella policy for
a maximum amount which has been increased to $25 million.
The insurance policies are reviewed regularly and may be
modified to reflect changes in the revenue, activities and risks
of the different companies within the Group.
Dassault Systèmes has not established captive insurance
coverage.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 35
1 Presentation of the Group
36 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
2
SOCIAL, SOCIETAL AND
ENVIRONMENTAL
RESPONSIBILITY
2.1 Social and Societal Responsibility
2.1.1 Dassault Systèmes and its Employees
38
38
2.2 Environmental Responsibility
2.2.1 Industrial and Environmental Risk
2.1.2 Organizing to support growth and the delivery
2.2.2 Environmental Report
CONTENTS
2.3 Independent Verifier’s Attestation
and Assurance Report on Social,
Societal and Environmental
Information
of the strategy
2.1.3 Attracting and developing talented individuals
within the Group and developing relationships
with the outside environment
2.1.4 Welcoming employees who have joined the Group
via recently acquired companies
2.1.5 Acknowledging performance and rewarding
contribution to delivering the strategy
2.1.6 Safeguarding business ethics, employer-employee
dialogue and personal safety
2.1.7 Methodology for Employee Reporting
2.1.8 Appendices regarding the Group’s Employee
Headcount
2.1.9 NRE correspondence table
39
41
47
48
50
52
54
56
57
57
58
66
DASSAULT SYSTÈMES ANNUAL REPORT 2014 37
2 Social, societal and environmental responsibility
Social and Societal Responsibility
Dassault Systèmes, the 3DEXPERIENCE Company, constantly
strives to provide business and people with 3DEXPERIENCE
universes to imagine sustainable innovations capable of
harmonizing product, nature and life.
Given its activity as a software editor, the Group’s goals are to
attract diversified talents around the world, to contribute to the
development of scientific profiles and to enable sustainable
innovation for customers.
Social, societal and environmental engagement has always
been at the heart of the Group’s strategy by the very nature of
the solutions developed and beneficial effects. Indeed, virtual
universes make it possible to address business challenges such
as process security, environmental impact, production chain
ergonomics, and more.
This strategy has enabled Dassault Systèmes to be recognized
in various rankings of sustainable development such as the
Global 100 Index, FTSE4Good, ECPI and the Carbon Disclosure
Project.
2.1 Social and Societal Responsibility
2.1.1 Dassault Systèmes and its Employees
Dassault Systèmes’ ambition can only be achieved with its
employees who are its most valuable asset. They represent
the culture and values of the Company and are at the heart
of its strategy and its long-term development. In the light of
the Group’s rapid growth, the climate of innovation in which it
operates and its growing number of business sectors, its main
human resource challenges are the following:
Developing a co-management system
One challenge within an international company is to ensure
operational excellence in every country while remaining
compliant with the Group’s policies and models. With this
in mind, Dassault Systèmes has implemented a system of
co-management between the functional and operational
management teams.
Continuing to develop the skills portfolio
Dassault Systèmes is permanently extending its range of
expertise and hires highly varied profiles. The Group has “selling
points” to attract these talented individuals and keep them
motivated: a long-term and high societal value strategic vision
as well as a dynamic and collaborative working environment,
focused on communities of interests and expertise.
Deployed in 2009 and based on the 3DEXPERIENCE platform,
this corporate social media community reveals new forms of
learning, assembling and connecting ideas and expertise, thus
stimulating innovation and contributing to the development
of each employee.
Rapidly integrating new employees
One of the challenges within a rapidly and constantly
growing company is to integrate new employees rapidly.
To do so, Dassault Systèmes uses on-line communities that
provide fast-paced access to information relating to the
Company, organizations and projects while showcasing the
responsibilities, skills and contributions of each employee.
The new initiatives called “Day 1, Day 90” were put in place in
2014 and are aimed at helping new hires settle into their new
working environment.
Transforming information into strategic value for the
Company and its ecosystem
The continual interaction of employees within the Company
and with its ecosystem of customers and partners, through
applications, on-line communities and social media, generates
a vast quantity of information, including structured and
non-structured data on a daily basis, which form part of the
Company’s intellectual and economic property. The challenge
lies with analyzing, processing in real time, connecting and
representing this information and data so that it can be
converted into competitive advantages and decision making-
aids. With its 3DEXPERIENCE platform, Dassault Systèmes
already has its own tools for managing and monitoring the
Company’s business.
In order to meet these challenges, and drive the Group
towards its goal and ensure the permanent development
of its employees’ skills, the Human Resources objectives of
Dassault Systèmes are based on the following areas of focus:
(cid:125) “Organizing” the Company to support growth and the
delivery of the strategy, while encouraging the agility of the
organizational structure and its ability to absorb growth and
stimulate innovation;
38 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Social and Societal Responsibility
2
(cid:125) “Attracting & Developing” a wide variety of talented
individuals, capable of integrating and developing in
the Dassault Systèmes culture and respecting its values;
developing these talented individuals by giving the priority
to a “learning through doing” approach, in other terms
learning through sharing experiences and learning in
real conditions; developing the appeal of jobs and careers
of Dassault Systèmes, by highlighting the societal and
technological dimensions of the Group; lastly, combining
the talented individuals and providing each of them with
the possibility to maximize their full potential through their
involvement in projects consistent with their competencies
and desires;
(cid:125) “Welcoming” the employees joining the Group through
acquisitions. For this purpose, Dassault Systèmes has
defined a process and a methodology designed to guide
new employees in understanding the Dassault Systèmes
organization, processes and culture, by giving each of them
new development opportunities within the Company;
(cid:125) “Valuing” acknowledging and rewarding performance and
the contribution made to delivering the corporate strategy,
while encouraging a passion for innovation and favoring the
collective and social dimensions advocated by the values of
Dassault Systèmes;
(cid:125) “Securing” the Company’s human resources, real estate
and other property, and
(see
paragraph 1.6.1.2 “Challenges to the Company’s Intellectual
Property Rights”) and its ecosystem (clients and partners),
guaranteeing the professional ethics and employer/
employee dialogue, in order to secure the sustainable nature
of Dassault Systèmes, its jobs and partnerships.
intellectual property
2
2.1.2 Organizing to support growth and the delivery of the strategy
The Dassault Systèmes Group is organized according to its
major fields of activity: R&D; Sales; Marketing; administration
and other functions, located in three large geographic regions:
Europe, Americas and Asia. Its workforce is made up of
employees, service providers and 3DPLM Ltd, a company in
which the Group owns less than 50%.
In 2014, the Group continued its growth by acquiring
new companies, and further expanding the scope of skills
development opportunities for it employees.
The data related to the characteristics of the Group’s workforce
presented in this report was established using the employee
reporting method defined in paragraph 2.1.7 “Methodology
for Employee Reporting”.
Overview and growth of Total Workforce
As of December 31, 2014, the Total Workforce was 13,312, up 24.9% compared to December 31, 2013. The number of employees
over the last three years is set forth below:
Years ended December 31,
Employees
Service Providers
3D PLM Total Workforce
Percent change
2014
2013
2012
*
Indicator verified by the independent verifier.
11,013*
8,587
8,101
474
378
428
1,825
1,689
1,593
13,312
10,654
10,122
24.9%
5.3%
6.0%
Overview and growth of Employee Headcount
Growth of the Company
As of December 31, 2014, the Employee Headcount was
11,013 full-time equivalent employees, located in 40 countries
and coming from 116 different countries, up 28% from
December 31, 2013. This growth is mainly external due to the
significant acquisitions made during 2014 namely Accelrys,
Quintiq and RTT (see paragraph 1.2.2.1 “Acquisitions in 2014
and 2013”).
DASSAULT SYSTÈMES ANNUAL REPORT 2014 39
2 Social, societal and environmental responsibility
Social and Societal Responsibility
Distribution by geographic region
Years ended December 31,
Employees
% Employees
% Employees
% Employees
2014
2013
5,787
4,480
53%
52%
3,449
2,866
31%
33%
1,777
1,241
16% 11,013*
15%
8,587
%
100%
100%
Europe
Americas
Asia
Total
*
Indicator verified by the independent verifier.
The change in the distribution of the headcount between 2013
and 2014 is explained by a difference in growth between the
different geographic regions: +29% in Europe, +20% in the
Americas and +43% in Asia resulting from the location of the
Employees joining the Group following the acquisitions made
by the Group in 2014.
Distribution by activity
Similarly, in 2014, the highest level of growth in the Employee
Headcount was recorded in Sales and Marketing and Services
as a result of these acquisitions, 63% of the Employee
Headcount represented by these categories.
Europe
Americas
Asia
Total
Total
Employees
2014
Employees
2014
%
Employees
2014
%
Employees
2014
%
Employees
2013
%
R&D
2,133
37%
1,121
33%
264
15%
3,518
32%
2,913
Sales, marketing and
services
Administration and other
2,901
753
50%
13%
1,858
470
53%
14%
1,332
181
75%
10%
6,091
1,404
55%
13%
TOTAL AT DECEMBER 31
5,787
100%
3,449
100%
1,777
100% 11,013*
100%
4,611
1,063
8,587
*
Indicator verified by the independent verifier.
%
34%
54%
12%
100%
Distribution by gender
The proportion of women in the Group, stable between 2013
and 2014, may seem relatively low. This is mainly explained by
the low number of women in engineering schools which is still
one of the main sources of recruitment for Dassault Systèmes.
Europe
Americas
Asia
Total
Total
Women
Men
TOTAL AT DECEMBER 31
Employees
2014
Employees
2014
%
Employees
2014
%
1,301
4,486
5,787
22%
78%
100%
861
2,588
3,449
25%
75%
100%
424
1,353
1,777
*
Indicator verified by the independent verifier.
Employees
2014
%
24%
76%
2,586
8,427
Employees
2013
%
23%
77%
1,947
6,640
8,587
%
23%
77%
100%
100% 11,013*
100%
Other characteristics of Employee Headcount
(Indicator verified by the independent verifier in 2014)
Breakdown by type of contract remained relatively stable.
98% of the Employee Headcount had permanent contracts in
2014 versus 99% in 2013.
In 2014, Managers represented 19% of the Dassault Systèmes
Headcount versus 21% in 2013. This reduction is explained
by the fact that the proportion of managers in the companies
acquired in 2014 is lower (16%).
The breakdown of the following information is presented in
paragraph 2.1.8 “Additional data concerning the Group’s
Employee Headcount”. The main items are as follows:
(cid:125) at December 31, 2014, 14% of the women employed by
Dassault Systèmes and 21% of the men working for the
Company are Managers, versus 16% and 22% respectively
in 2013. The reduction in the overall proportion of managers
is automatically translated in the same manner both for
men and women;
(cid:125) the distribution of the Company’s employees by age and
seniority remained stable between 2013 and 2014.
Outside service providers and sub-contracting
Dassault Systèmes regularly calls on outside service providers
when it requires resources with specific know-how, for projects
with a limited duration.
The cost of using outside Service Providers in 2014 amounted
to €75.1 million, versus €66.2 million in 2013, an insignificant
amount
in relation to the Dassault Systèmes revenue
(€2.29 billion in 2014 and €2.07 billion in 2013).
40 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Social and Societal Responsibility
2
2
At December 31, 2014, 474 outside service providers (data expressed in full-time equivalents) worked for the Group:
Year ended December 31,
2014
2013
Europe
Americas
Asia
Total
%
46%
51%
217
192
%
37%
36%
177
138
% Employees
80
48
17%
13%
474
378
%
100%
100%
Dassault Systèmes only establishes contractual relationships
with sub-contractors that respect the fundamental laws
and regulations concerning labor law and environmental
protection (see paragraph 2.1.6 “Principles of Corporate Social
Responsibility and commitments to ensuring respect for
basic rights”).
Absenteeism (Indicator verified by the independent
verifier in 2014)
Absenteeism is tracked locally in accordance with regulations
applicable in the countries where Dassault Systèmes has
operations. The Company does not have a harmonized system
for managing absenteeism throughout its subsidiaries.
Organization
Work time
In each country where Dassault Systèmes has operations, the
length of the workweek is determined according to the local
regulations in force. It is generally set at 40 hours. This is the
case in particular in Japan, China, India, the United States,
Canada, the United Kingdom and Germany.
In France, work time is determined according to whether an
employee is under the system of annual working days (forfait
jours) or the hourly system (mode horaire). Employees under
the system of annual working days work a predefined number
of days per calendar year and other employees work a certain
number of hours as defined by local labor agreements in force
within each company.
Full-time and part-time
98% of the Employee Headcount work on a full-time basis.
6% of women and 1% of men work on a part-time basis.
These figures are relatively stable versus 2013. Full details of
the following information are presented in paragraph 2.1.8
“Additional data concerning the Group’s Employee Headcount”.
The information presented below covers a part of the Group’s
French companies (Dassault Systèmes SA, Dassault Systèmes
Provence SAS, Dassault Data Services SAS, Netvibes SAS,
Archivideo SA and 3DVIA SAS), which represent 30% of the
Employee Headcount:
(cid:125) in 2014, the reasons for employees not reporting for work,
excluding annual leave, are as follows: illness: 9,806 days,
maternity and paternity leave: 4,827 days; workplace and
work-related travel: 834 days. The resulting absenteeism
rate is 2.2%, a slight decrease from 2013 (2.5%);
(cid:125) the total number of authorized absences (such as parental
leave and leave for family events excluding paid leave) was
2,803 days at end 2014, or 0.4% of the number of days
theoretically worked. This rate was 0.6% in 2013.
In the Group’s other main countries, the rate of absenteeism
is as follows: 0.9% in the United States versus 1.2% in 2013;
2. 9% in Canada versus 3.5% in 2013; 2.9% in Germany versus
3.9% in 2013; 1.3% in the United Kingdom versus 1 % in 2013;
0.5 % in Japan versus 1.5% in 2013; 1.8% in China versus
1.5% in 2013. The rate remains very low in India and Korea
(less than 1%), where absenteeism for reasons of short-term
illness is difficult to ascertain as it is included in paid leave.
2.1.3 Attracting and developing talented individuals within
the Group and developing relationships with the outside
environment
2.1.3.1 Attracting talented individuals
Recruitment is a priority for Dassault Systèmes, in order to
meet requirements generated by its growth. The Group aims
to be acknowledged as an exemplary operator that contributes
to the development of employability in all its forms (jobs,
apprenticeships and internships) and forges relationships
with major educational establishments and universities
in the major countries in which the Group operates. A set
of actions are consequently being undertaken in the vast
majority of the countries where the Group has facilities. (see
also paragraph 2.1.1.3 “Developing relations with the social,
regional and community environment”).
Dassault Systèmes seeks to recruit most of its employees
locally, thus contributing to economic growth in each of the
40 countries in which it operates. At December 31, 2014,
DASSAULT SYSTÈMES ANNUAL REPORT 2014 41
2 Social, societal and environmental responsibility
Social and Societal Responsibility
two-thirds of the Group’s Employee Headcount was
located outside France and the Group had employees from
116 different countries.
To work for Dassault Systèmes, it is important to have a
passion for technological innovation, a desire to work with
other people and an appetite for a challenge.
In general, all available positions are published internally and
externally and priority is given to internal promotion over
external recruitment where the skill level is equal.
Moreover, Dassault Systèmes offers its employees an attractive
working environment in premises most of which boast
excellent green ratings (57% of the Employee Headcount
in 2014 compared with 52% in 2013) and infrastructures
conducive to teamwork.
Employee arrivals and departures
Employee arrivals
Europe
Americas
Asia
Total
Total
Permanent contracts
Temporary contracts
TOTAL
Employees
2014
1,650
272
Employees
2014
%
86%
14%
1,003
16
1,922
100%
1,019
100%
Employees
2014
%
98%
2%
715
7
722
Employees
2014
%
99%
1%
3,368
295
Employees
2013
%
92%
8%
1,286
163
%
89%
11%
100%
3,663*
100%
1,449
100%
*
Indicator verified by the independent verifier.
The companies acquired in 2014 represent over two-thirds
of the Group’s new employees and largely explain the
characteristics described hereafter.
Among the 3,663 employees hired in 2014, the vast majority
were done so on a permanent basis as in 2013 and managerial
positions represented 11% of hires in 2014 versus 7% in 2013.
On average, the number of new hires was 43% in 2014
compared to the Employee Headcount at the end of 2013.
The age pyramid for new employees in 2014 remains
relatively stable (see paragraph 2.1.8 “Additional information
concerning the Group’s Employee Headcount”).
Lastly, 27% of new hires in 2014 were women, stable with
regard to 2013.
Europe
Americas
Asia
Total
Total
Women
Men
TOTAL
Employees
2014
Employees
2014
%
Employees
2014
%
500
1,422
1,922
26%
74%
297
722
29%
71%
100%
1,019
100%
208
514
722
*
Indicator verified by the independent verifier.
Employee departures
In 2014, 1,149 employees left the Company. Departures were split as follows:
Employees
2014
%
29%
71%
1,005
2,658
Employees
2013
%
27%
73%
368
1,081
1,449
100%
3,663*
100%
Europe
Americas
Asia
Total
Total
Permanent contracts
Temporary contracts
TOTAL
Employees
2014
Employees
2014
%
Employees
2014
%
395
120
515
77%
23%
100%
449
18
467
96%
4%
100%
161
6
167
*
Indicator verified by the independent verifier.
Employees
2014
%
96%
4%
1,005
144
Employees
2013
%
87%
13%
735
126
861
100%
1,149 *
100%
%
25%
75%
100%
%
85%
15%
100%
On average, attrition rate was 10.5% in 2014 versus 9.6% in 2013. Excluding temporary contracts, the rate is 10.1% in 2014
and 8% in 2013.
42 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Social and Societal Responsibility
2
2
2.1.3.2 Developing, training and managing
the careers of Dassault Systèmes
employees
In 2014, Dassault Systèmes SA deployed the “3DEXPERIENCE
University” solution by using its 3DEXPERIENCE platform in
order to create a network made up of the Group’s talented
individuals, offering them programs adapted to their position
and in relation to the requirements and objectives of each
employee.
Furthermore, activities are supported by the “Passion to
Learn” community, a virtual center enabling exchanges of
ideas and opinions about the learning process and modules
accessible from the “3DEXPERIENCE University”. This enables
employees to stay informed and exchange views concerning
the publication of new modules, put questions to experts
about the modules available or those which they feel need
creating as well as asking all necessary questions about using
the 3DEXPERIENCE platform and its content.
The manager development program has been enhanced this
year in order to meet the requirements for managing matrix
teams spread across the globe. A new initiative was launched
through the “3DEXPERIENCE University” with the aim
being to showcase different management styles thanks to a
program delivered in a virtual classroom enabling expertise
and knowledge to be shared between the trainer in France and
students in Asia. This program is due to be used on a larger
scale in 2015 for all types of training.
Significant changes have been made to sales training courses
this year. Programs designed for managers were delivered
to 150 employees. The deployment of training courses
concerning the sales process and the tools available in various
formats: face-to-face, e-learning and virtual classroom made
it possible for the Group to reach the whole sales population
throughout the world.
In line with 2013, over 500 employees from across the world
from the finance, legal and sales administration departments
attended two three-day training sessions at the BA College
(Business Administration College) within the framework of the
“3DEXPERIENCE University”. In addition to training sessions
covering financial and legal subjects, modules focusing on
new technologies, and, in particular, the cloud, are offered
to ensure that employees understand the new challenges
presented by the introduction of these technologies in the
Dassault Systèmes product portfolio.
Lastly, the R&D College training programs were significantly
enhanced in 2014 to train developers with regard to the
application web development technologies in order to deliver
the best “on the cloud” products on the 3DEXPERIENCE
platform.
training
In 2014, 104,927 hours of “professional”
(management, languages, etc.) were delivered in the main
countries of the Group (see paragraph 2.1.7 “Methodology
for Employee Reporting”). This amount of hours represents all
training that can be recorded in a similar manner between the
different countries without taking into account other learning
conditions, falling outside this formal context, such as on-the-
ground learning, workshops and virtual exchange communities.
The training courses related to the Dassault Systèmes portfolio
of solutions are not included in this amount of hours because
they are very often managed by the organizations themselves
(R&D, Marketing and Industries, etc.) and are not always
recorded in a centralized manner.
The ratio of training hours per employee was up by 18%
between 2013 and 2014. The number of hours of online
training recorded increased considerably. Their use increased
and their recording was extended to other training courses.
They are accessible from the“3DEXPERIENCE University”
and built into the employee career development path. The
percentage of these online training courses increased to
7% in 2014 versus 1% in 2013, reaching a wider audience
throughout the whole world.
Lastly, the breakdown of hours between managers/non-
managers and between men and women remained relatively
stable in 2014. Training hours for women represent 25% of
the total number of hours, while they represent 23% of the
Group’s total headcount. This percentage is 24% for managers
who represent 19% of the Employee Headcount, the latter
benefiting in particular from a dedicated training management
program.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 43
2 Social, societal and environmental responsibility
Social and Societal Responsibility
Distribution of training
hours by type
Management
Job skills
Health, safety and
environment
Language
Computer skills
(Dassault Systèmes
internal tools)
Personal development
Ethics and Compliance
DIF (French-specific)
TOTAL
Distribution of training
hours by category
Managers
Non-Managers
TOTAL
Distribution of training
hours by men/women
Men
Women
TOTAL
Europe France/
United Kingdom/
Germany
Americas
United States/
Canada
Asia Japan/
China/India/
South Korea
2014
total
2,101
19,527
497
6,931
12,020
65,401
62%
%
7%
4,333
33,854
332
6,879
895
4,515
2,166
4,169
-
923
-
332
0%
2,813
10,615
10%
442
4,078
2,365
-
1,117
1,062
839
-
2,454
9,655
5,370
4,169
2%
9%
5%
4%
2013
ratio(1)
2014
ratio(1)
2013
total
9,212
41,379
1,112
4,626
2,538
10,727
10,562
2,808
%
11%
50%
1%
6%
3%
13%
13%
3%
57,143
29,436
18,348 104,927(2 ) 100% 13,3 HOURS(1 ) 82,964 100% 11.5 HOURS(1 )
13,433
43,710
57,143
41,435
15,708
57,143
6,878
22,558
29,436
22,212
7,224
29,436
4,675
13,673
24,986
79,941
24%
76%
18,348 104,927(2 ) 100%
15,033
3,315
78,680
26,247
75%
25%
18,348 104,927(2 ) 100%
20,538
62,426
25%
75%
82,964 100%
62,600
20,364
75%
25%
82,964 100%
(1) Ratio = average number of hours per employee (excluding acquisitions).
(2) Indicator verified by the independent verifier.
Promoting diversity and gender balance
The Code of Business Conduct demonstrates the extent to
which the Dassault Systèmes culture is based on mutual
respect, fairness, and the diversity of its employees. Within
this context, recruitment, training, promotion, assigning
and more generally, all work-related decisions are based on
competencies, talent, achievements and employee motivation,
without any form of discrimination, harassment or bullying.
Professional equality between men and women
Dassault Systèmes encourages hiring both men and women,
developing access for women in various businesses, and
ensuring fair treatment for women’s career advancement.
A certain number of initiatives were launched in 2014 not
only to increase the proportion hired but also to track the
development of women at Dassault Systèmes and increase
the percentage of women managers (at December 31, 2014,
14% of the women employed by Dassault Systèmes are
Managers). A 3DS WIN (3DS WOMEN INITIATIVE) internal
community was put in place in 2012 to coordinate a network of
women and men determined to encourage, inspire and mentor
women to develop their careers with Dassault Systèmes.
The Dassault Systèmes Executive Committee is comprised of
two women and eight men while the Board of Directors had
four women members and five men at the end of 2014.
in the different countries where
Dassault Systèmes endeavors to comply with applicable
regarding professional equality and non-
regulations
it has
discrimination
Japanese,
employees. The French, American, Canadian,
English and German companies of Dassault Systèmes, which
employ close to 80% of the Company’s employees included in
the Employee Headcount, are subject to specific employment
anti-discrimination and gender-equality laws.
For example, the agreement regarding equal professional
treatment and balanced employment between men and
women at Dassault Systèmes SA was renewed and signed on
April 10, 2012 for a three-year period.
It covers the following themes: hiring and developing
the professional gender balance, the equal compensation
and pay policy between women and men, promotion and
career development, work-life balance, awareness and
communication actions in favor of changing mindsets and
behavior.
In addition, in order to analyze the positioning of men and
women at Dassault Systèmes SA and to define actions to be
undertaken to eliminate inequalities, a report on the situation
44 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Social and Societal Responsibility
2
2
comparing general employment conditions and training for
men and women is prepared each year in accordance with the
law. It has been available on the intranet site since 2010.
actions were conducted: initiatives in favor of recruitment,
adapting workstations, training and awareness, and initiatives
in partnership with protected sectors.
Some French subsidiaries have also implemented agreements
or action plans on equality or the promotion of diversity
(Dassault Systèmes Provence SAS, Dassault Data Services
SAS, Archivideo SA).
In the United States, Dassault Systèmes ensures compliance
with regulations regarding equality in the workplace (hiring,
training, promotions, compensation, dismissals and any
other decision related to work), in particular Title VII of the
Civil Rights Act. It sends reports of compliance with these
regulations (EEO1, Vet100 and Affirmative Action reports) to
the U.S. authorities each year.
Disabled persons
The French, American, Canadian, Japanese, English and
German companies of Dassault Systèmes, which employ close
to 80% of the Employee Headcount, are subject to specific
laws in this area. This is also the case for most of the other
European countries where employees are located.
In France, since the first agreement entered into in 2003
within Dassault Systèmes SA for employing employees
with disabilities, which created conditions favorable for their
integration, a number of agreements have been renewed, the
last of which was signed by all labor unions on December 21,
2012, for the period 2013-2015.
These agreements reflect Dassault Systèmes SA’s desire to
make the hiring, training and continued employment of the
disabled a major component of its policy.
As of December 31, 2014, 48 disabled persons were employed
by Dassault Systèmes SA versus 38 in 2013; 43 under
permanent employment contracts, 3 under apprenticeships
and 3 under internships.
Furthermore, a large number of actions concerning employee
support, internal communication, training and awareness
have been conducted: improving workstations, presentations,
videos, sessions aimed at developing awareness with regard
to welcoming and the onboarding of disabled employees, etc.
Actions with outside service providers are also conducted as
are partnerships with institutions in the protected sector and
the provision of services on the 3DS Paris Campus.
Access to 3DS Paris Campus for disabled persons was
specifically considered during construction (such as floor
quality, doors, furniture, Eo-guidage signaling, magnetic
loops, accessible meeting rooms, parking lot entrances, for
example).
Since 2011, Dassault Data Services SAS has committed itself
each year to adopt measures supporting the integration and
employment of disabled persons. In 2014, the following
There are no specific agreements on this topic for the other
French subsidiaries.
In the United States, the regulations regarding job equality
(see the paragraph above “Professional equality between
men and women”) apply in cases of discrimination against
disabled employees. It is, however, not permissible to ask
about the type of the employee’s disability. As a result, no
data is provided.
Intergenerational agreements
In application of French law, an intergenerational agreement
was signed at Dassault Systèmes SA on October 8, 2013 for a
three-year period.
This agreement follows on from the agreement on employing
senior employees (agreement signed in 2010), building on the
measures initiated to anticipate career changes, develop and
transfer skills and manage the transition between working life
and retirement. It has now been enhanced by a component
aimed at facilitating the recruitment and integration of young
people within the Company.
An intergenerational agreement has also been put in place at
Dassault Data Services SAS, Dassault Systèmes Provence SAS
for a three-year period and there are corporate action plans at
Netvibes SAS, Archivideo SA and 3DVIA SAS in particular.
2.1.3.3 Developing relations with the social,
regional and community environment
Company relations with secondary and post-secondary
education
Dassault Systèmes’ relations with the world of education are
aimed at constantly updating teaching methods and fostering
the skills and talents expected by its clients. This effort was
stepped up in 2014.
Facilitating educational innovation
Educational practices have continued to be upgraded more
rapidly leading to the course and educational material being
made free of charge to the Company’s academic clients so that
they incorporate and become familiar with these innovations.
Cooperation with LEGO® Education has resulted in the creation
of a program enabling secondary school children and students
beginning higher education to experience collaborative
innovation learning. Called “BE an ENGINEER”, this program
is aimed at encouraging the very young to undertake technical
studies and students to continue in these fields.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 45
2 Social, societal and environmental responsibility
Social and Societal Responsibility
The “3D MOOCS Studio” project has led to making available
a set of tools and methods enabling teachers to improve the
interactivity of their online lessons (MOOC: Massive Open
Online Course) and reduce the high drop-out rates that are
typical of the first large-scale e-learning experiments.
Lastly, the “internet objects” methods have been applied to
teaching in order to create new educational uses. Thus, didactic
equipments, such as miniature robots, can be synchronized
remotely via internet through their digital avatar simulated by
CATIA solution. This type of practice – the remotely controlled
laboratory – leads to numerous new learning scenarios such as
remote access to equipment which is not available in emerging
countries.
Research into innovative educational methods has been
supported. Consequently, the PLACIS project, funded by the
Agence nationale de la recherche en France (ANR), aimed at
creating training courses for engineers in complex systems
saw its deployment extended in Europe thanks to funding
from the European Union’s ERASMUS+ program. Within the
same context, the funding of EURLAB, the European project,
conducted by the Lycée Louis Armand (a high school located
in Nogent-sur-Marne) in France, will initially involve secondary
school pupils in Germany and Italy. The Group contributes
to this collaborative robotics project between remote sites
by providing its cloud technology and expertise in their
educational applications to the consortium of participating
establishments.
All of these activities were supported by the Group’s active
collaboration in a number of scientific associations, such
as the American Society for Engineering Education (ASEE),
the European Society for Engineering Education (SEFI), the
International Federation of Engineering Education Societies
(IFEES), the Global Engineering Deans Council (GEDC),
the Indian Society for Technical Education (ISTE) and the
European SchoolNet, promoting new methods in teaching
sciences and technology in secondary school. The National
Academy of Engineering and the Association Française
d'Ingénierie des Systèmes (French Association of Systems
Engineering) are just two of the new learned societies with
which Dassault Systèmes cooperates.
Facilitating open innovation, collective intelligence
Dassault Systèmes has provided its support to community
projects, in order to bring together players sharing a common
interest on the same platform and create the 3D educational
experiences of tomorrow.
With regard to industry skills, teachers, companies and
academics have joined forces to develop virtual 3D laboratories
to teach skills in wind power. Leading academic establishments
(CESI, INSA, ENI), professional training organizations (AFPA
and ORT), the Académie de Créteil and the regional WindLab
have teamed up to overhaul educational methods by favoring
learning in real situations and through trial and error, thanks
to simulation and measuring the results obtained. This project
is called EAST: Environnement d’Apprentissage Scientifique
et Technique (Scientific and Technical Learning Environment)
and for which Dassault Systèmes provides solutions softwares
such as 3DVIA Studio Pro.
Furthermore, the DaVinci 3D project provides enthusiasts with
the opportunity to work in a completely open and participatory
manner, in order to reproduce the inventions and machines of
Leonardo de Vinci in 3D. Enthusiasts, engineers, designers and
scientists from across the world, from all generations, meet up,
discuss, help each other via an online community and digitize
these inventions using codex left by the genius inventor. In
just a few months, dozens of 3D machines were created, some
of which are now publicly displayed in Château du Clos Lucé.
Training the engineers and technicians required
by Dassault Systèmes’ customers
At the end of 2014, the number of pupils and students using
one or more of the Group’s technologies in an educational
context was estimated at 4 million, essentially in secondary
and further education. The Company’s efforts have led to
the overall broadening of the user community as well as
developing and modernizing their uses.
Georgia Tech, the leading university in the United States in
terms of the number of graduating engineers, has extended
its use of the 3DEXPERIENCE platform to 10,000 students
and teachers. They benefit from a wide choice of uses
ranging from programs for high school students to advanced
engineering applications for complex systems. A special effort
was made in India with regard to the programs aimed at
increasing the employability of new engineering graduates.
This effort, conducted in consideration of the World Bank’s
initiatives, resulted in a teacher training program (“FEAT”:
Faculty Enablement
through Avant-garde Technology),
concerning assistance with developing University/Business
relationships (e.g. at Chitkara University, one of the major
technical universities in Northern India) and awarding several
“3DSAcademy member” labels acknowledging the quality
of the training delivered in relation to the Dassault Systèmes
tools.
During the year the number of SOLIDWORKS academic
licenses passed the 2 million mark.
The numerous teaching programs were intense. In order to
encourage greater interest in the sciences and technology, and
contribute towards reversing the trend of disinterest among
young people for these disciplines in France, the multidiscipline
competition called Course en Cours, has maintained its level
of participation across France – 11,500 secondary and high
school students – and the leading French high schools abroad
are following suit. The Company extended its sponsorship
program for teams of students engaged in extracurricular
scientific and technical activities such as the “First robotics”
competition which saw 20,000 high school and university
students use Dassault Systèmes software. In Singapore,
600 pupils use SOLIDWORKS in an international project called
46 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Social and Societal Responsibility
2
”Destination Zero Carbon” and 12,000 students involved in
the “Formula Student/Formula SAE” international competition
have used CATIA or SOLIDWORKS.
12,622 students obtained the official Certified SOLIDWORKS
Associates (CSWA) certification proving the employability of
their skills using this software.
The Group’s audience on social media grew significantly
reaching the figure of 664,000 “fans” on Facebook.
Company commitment to associations
Dassault Systèmes is involved with associations to support
the virtual economy and encourage sustainable innovation.
To promote the development of the digital economy in France
and in Europe, Dassault Systèmes is a founding member of
AFDEL (Association Française des Éditeurs de L ogiciels, or
the French Association of Software Editors). The goal of this
association is to promote the software industry as an industry
that contributes to sustainable growth. Dassault Systèmes also
supports the “Villette Foundation”, a part of Universcience in
France, whose goal is to promote and encourage scientific and
technical culture to young people and to the public at large.
Throughout the world, Dassault Systèmes brands are involved
in local community efforts.
Finally, the Company spearheaded an initiative to provide
support for education and economic development in Rwanda.
The project’s initial objective was to provide students with
CAD program skills, with SOLIDWORKS contributing the
licenses and teaching programs. The program has evolved
into helping participants structure and manage businesses
providing modeling services, and subsequently into creating
demand for such services.
Social projects
In France, Dassault Systèmes SA subsidizes its Workers’
Council in the amount of 5.2% of total gross salaries paid
during the year, with 5.0% for social and cultural activities and
0.2% for the operating budget. In 2014, the Workers’ Council
thus received €9.1 million, compared to slightly more than
€8.5 million in 2013 and €7.9 million in 2012.
This yearly allocation by Dassault Systèmes allows employees,
as well as their spouses and children, to be offered a large
range of social and cultural activities with many sections
dedicated to specific domains from sport to art, as well as
financial support, such as for vacations, children’s education,
and membership in clubs.
Dassault Data Services SAS and Dassault Systèmes Provence
SAS subsidize their Workers’ Councils at a level of 1.5% of their
total gross salaries paid during the year, with 1.3% for social
and cultural activities and 0.2% for the operating budget.
2
2.1.4 Welcoming employees who have joined the Group via recently
acquired companies
Due to the strong growth, speeding up the onboarding of
employees joining the Group is a major challenge.
For this purpose, Dassault Systèmes has defined a methodology
and processes aimed at putting in place an induction plan
specific to each company acquired, motivating and building
the loyalty of talented individuals, providing each employee
with greater room for development within the Group.
This methodology is based in particular on the 3DEXPERIENCE
platform as well as the online communities which facilitate
to
the
the
dynamic access
Company, organizations and projects, while highlighting
the responsibilities, competencies and contributions of each
person.
information concerning
A team of employees from Dassault Systèmes as well as
the acquired company is formed in order to conduct this
convergence project focusing on different processes: Sales
and Marketing, R&D and Customer Support, Finance, Human
Resources, IT and Working Environment.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 47
2 Social, societal and environmental responsibility
Social and Societal Responsibility
2.1.5 Acknowledging performance and rewarding contribution
to delivering the strategy
As part of the performance evaluation process, each employee
meets with his or her manager on a formal basis at least three
times a year to assess the results of the past year, define goals
for the coming year and, on a half-yearly basis, discuss the
rewards granted to the employee for his or her performance
and contribution to the development of Dassault Systèmes.
Dassault Systèmes also values other types of initiatives with
particular attention paid to the spirit of innovation as well as
collective and social actions:
(cid:125) the innovations developed within the Group by the teams
are then showcased through “3DS INNOVATION Forwards”,
which every year rewards the most innovative projects
conducted by employees throughout the world;
(cid:125) actions are conducted to highlight the importance of the
work done by the personnel while also enhancing employee
quality of life;
(cid:125) Dassault Systèmes also highlights the actions aimed
at contributing to the sustainable development of its
ecosystem by participating in social and societal actions.
Performance and compensation
Compensation
The compensation policy at Dassault Systèmes seeks to
ensure that each employee receives compensation consistent
with market practices in the advanced technology industry
in each country where the Company has operations, and
differentiated according to the individual performance of each
employee as appraised by his or her manager during an annual
interview reviewing performance and goals.
Increases take place for the entire Company in April each year.
All the employees who were with the Company on October 1
of the preceding year are eligible for an annual salary increase.
In 2014, the salary increases granted by Dassault Systèmes
depended on performance and market changes in each
country where the Company has activities.
Total gross annual payroll paid by the Company (including
for employees of 3DPLM Ltd) amounted to €822.7 million
in 2014, compared to €690.1 million in 2013, an increase of
19% for the year principally driven by growth in the Group’s
total headcount.
Payroll taxes for the Group amounted to €228.9 million in
2014 compared to €195.5 million in 2013. In 2014, payroll
taxes included an amount directly related to a grant of
performance shares. No performance shares were granted
in 2013.
Profit-sharing (pursuant to Titles I and II of Book III
of the Labor Code)
Employee profit-sharing (l'intéressement) and regulatory
profit-sharing (la participation) are two methods of employee
savings established by law in France. Employee profit-sharing
is optional, while regulatory profit-sharing is required for all
companies with more than 50 employees.
In 2014, Dassault Systèmes SA renegotiated its agreements
with labor unions for employee profit-sharing and regulatory
profit-sharing for a period of three years, covering 2014, 2015
and 2016.
Employee profit-sharing for the year 2013, which was paid
in 2014 at Dassault Systèmes SA, amounted to €18.4 million
(€16.7 million in 2012). The total amount of the contribution
by Dassault Systèmes SA for regulatory profit-sharing for
the year 2013, which was paid in 2014, was €15.5 million
(€13.3 million in 2012).
The results of operations recorded by Dassault Systèmes SA
for the year 2014, and which will be submitted for approval at
the Annual General Meeting of Shareholders on May 28, 2015
should permit the distribution of employee profit-sharing and
regulatory profit-sharing of €17,921,048 each.
The table below sets forth the amounts of employee profit-
sharing and regulatory profit-sharing at Dassault Systèmes SA
over the past three years.
2014
2013
2012
(in thousands of euros)
Amount
% payroll
Amount
% payroll
Amount
% payroll
Contractual employee profit-sharing
(intéressement)
Regulatory profit-sharing (participation)
TOTAL
17,921
17,921
35,842
10.5%
10.4%
20.9%
18,422
15,512
33,934
12.0%
10.2%
22.2%
16,786
13,291
30,077
11.8%
9.4%
21.2%
Payroll percentages are calculated on a capped payroll base as per the current profit sharing agreements.
48 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
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Social and Societal Responsibility
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2
The amounts attributed individually to employee beneficiaries
are, depending on the choice made by the employee, either
directly received, contributed to one of the Company’s savings
or group retirement plans, or deposited (only possible for
regulatory profit-sharing) in a blocked bank account bearing
interest at 110% of the average interest rate on private bonds
(Taux de Rendement Moyen des Obligations Privées).
At Dassault Data Services SAS and Dassault Systèmes
Provence SAS, the amount of contractual employee profit-
sharing paid in 2014 in respect of year 2013 represented
7.3% and 3.9% of the payroll respectively, and the regulatory
profit-sharing represented 2.5% and 20.3%. Optional profit-
sharing agreements were also signed in 2013 and contractual
profit-sharing agreements in 2014 in Netvibes SAS and 3DVIA
SAS. Lastly, Archivideo SA also signed an employee profit-
sharing agreement in 2014.
Other plans
In Canada, there is a “Deferred Profit-Sharing Plan” (DPSP)
which allows a portion of profits to be distributed to employees
registered on the “Registered Pension Plan” (RPP).
Recognizing the flair for innovation and showcasing
collective initiatives advocated by the values of
Dassault Systèmes
3DS INNOVATION Forwards
Every year, the 3DS INNOVATION Forwards reward the
most innovative projects led by Dassault Systèmes’ teams
worldwide. Launched in 2004, the initiative encourages a
spirit of innovation within the Group, promotes recognition,
and deepens understanding of the corporate strategy. The
proposed projects are designed to provide solutions for the
Company’s strategic issues: contributing to the response to
the challenges of industries, creating new user experiences
enabling them to see the advantages of the products made by
the Dassault Systèmes brands, participating in the Company’s
commitment to
increasing
the value of the 3DEXPERIENCE platform, offering new
experiences that contribute to the development of the Group’s
employees and its business activities, etc.
its customers and partners,
All Dassault Systèmes employees are invited to submit a full
description of the project within an on-line community, set up
on the 3DEXPERIENCE collaborative platform. The projects can
be seen by everyone and are selected via a collective vote and
jury made up of members of the Executive Committee. There
were 354 applicants in the 2014 edition of the competition
representing 2,338 employees and 23 winning teams.
Initiatives to reward work and improve the lives of employees
Since 2010, a satisfaction survey has been open to all
Dassault Systèmes employees worldwide. This survey enables
employees to give their opinion about various themes such
as well-being at work, mutual respect, pride in working for
Dassault Systèmes, etc. Following this annual survey, various
targeted initiatives are implemented over the year at global
and local levels in order to reward good practices while
improving quality of life at work.
These initiatives include the Managers's Café in France, where
managers share their good practices or daily problems; actions
concerning the work/life balance and preventing stress, where
the participants have benefited from useful recommandations;
and awards ceremonies in specific departments (e.g. “Finance
Awards”) or countries (e.g. “Korea Recognition Awards”, “U.S.
Years of Service Anniversary and Star Award Recognition
Programs”) to recognize the work undertaken by certain
teams or employees.
to sustainable development within
Collective company and social initiatives
the Group’s subsidiaries organize programs
Most of
contributing
their
community e.g. voluntary work days with local associations
organized by the SIMULIA employees, DELMIA employees’
food drive, participating in the PanMassachussets Challenge
race, an event organized to raise money for a cancer research
institute (Dana Farber).
Other similar initiatives can be noted as well. In the U.S. and
Canada, Dassault Systèmes employees can take part in two
community service half-days in the year. For example in 2014,
Montreal office workers helped clean the banks of the Lachine
Canal and worked as volunteers in a restaurant whose profits
are given to associations in the city.
In South Korea, Dassault Systèmes contributes to the WISET
professional training program supported by the government
and whose objective is to help women who have interrupted
their career to be able to study for a job in science, engineering
and technologies. The Company has allowed them to use its
facility and its CATIA software.
Lastly, in France, Dassault Systèmes took part in the Rêves
de Gosse: Tour 2014 initiative which offers “extraordinary”
children (sick children) the opportunity to go on a first flight
organized by amateur and professional pilots. Within this
context, the Disability Task Force took part in the event: running
a Dassault Systèmes stand; organizing internal awareness
events for the employees; financing two promotional films;
and co-organizing, with the Dassault Systèmes SA Works
Council, a Vols Découvertes (Discovery Flights) Day for the the
disabled children of Dassault Systèmes employees.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 49
2 Social, societal and environmental responsibility
Social and Societal Responsibility
2.1.6 Safeguarding business ethics, employer-employee dialogue
and personal safety
or companies, whether they are partners, customers,
suppliers, service or other companies or organizations, with
the goal of benefiting from preferential treatment; and
(cid:125) using Group funds to make a contribution of any kind to
political candidates or parties.
These principles are supplemented by an “anti-corruption
policy”, which applies in each Dassault Systèmes company.
Principles of Enterprise Social Responsibility
and commitments to ensuring respect for basic rights
The Code of Business Conduct requires Dassault Systèmes’
employees to comply with international standards, such
as the Universal Declaration of Human Rights of the United
Nations and the various Basic Conventions of the International
Labor Organization. With respect to the Group’s activities,
the risk of these basic standards being violated is very low
and the actions undertaken to support human rights are not
specifically reported on.
The Group also promotes corporate responsibility with respect
to its ecosystem, based on the acknowledgment of and
compliance with basic laws on social rights and environmental
protection; the general terms and conditions of the sub-
contracting and purchase agreements of Dassault Systèmes’
major companies include specific commitments:
(cid:125) the Dassault Systèmes SA model contracts oblige its
service providers to follow the social and environmental
responsibility principles which Dassault Systèmes uphold.
They are available at the following link: http://www.3ds.
com/fileadmin/COMPANY/Ethics-and-compliance/
Principes-de-Responsabilite-Sociale.pdf;
(cid:125) the agreements between Group entities in the United States,
Canada, France, the United Kingdom, Germany, India, and
other European countries (which account for more than
60% of the Group’s Employee Headcount) and their service
providers contain clauses regarding respect for employees’
rights.
Dassault Systèmes requests that its suppliers and partners
comply with the provisions of the basic conventions of the
International Labor Organization, in particular the principles of
eradicating child labor by requiring children to attend school
(and in any event under 15 years of age), eliminating forced
labor, ensuring working conditions sufficient to provide for
employee health and safety, respecting applicable minimum
Business ethics
Since its creation, Dassault Systèmes has developed its
culture and built its reputation on different fundamental
principles, particularly the creation of long-term relationships
with its employees, customers, partners and shareholders,
as well as high-quality products with high added-value.
Confidence and integrity, supported by rigorous ethics and
regulatory compliance, are at the heart of Dassault Systèmes’
commitments for sustainable innovation and growth.
is
formalized
The Company’s commitment to professional ethics and
through procedures
business citizenship
regarding corporate governance, in particular the “Code
of Business Conduct” distributed to all the Company’s
employees (see paragraph 5.1 “Report of the Chairman on
Corporate Governance and Internal Control”) and “Principles
of Enterprise Social Responsibility” on the Company’s internet
site. The Code of Business Conduct, which is backed up by
specific policies, is intended to serve as the reference for each
Company employee to guide his/her behavior and his/her
interactions in connection with his/her activities.
This commitment is also borne out by the policy of making
new employees aware of ethics and compliance and by
targeted training courses taken by the employees most
exposed to ethical risks in their daily duties.
The online ethics and compliance training, created in 2013,
is now an integral part of the onboarding program for all new
employees. This course comprises 14 modules, each of which
is broken down into a theory section followed by practical
applications in a question/answer format. The topics dealt
with include the fight against corruption, the protection of
intellectual property, respect for confidentiality, ethics in the
workplace, competition law, information systems security,
personal data protection, and conflicts of interest etc.
The fight against corruption
The Code of Business Conduct prohibits Group employees
from:
(cid:125) exchanging gifts or invitations in order to favor or influence
a commercial decision, whether it be taken by a customer,
partner, supplier or employees of the Group;
(cid:125) using Dassault Systèmes’ funds or assets to pay bribes or
kickbacks or make payments of a similar nature liable directly
or indirectly to benefit third parties, including shareholders
50 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Social and Societal Responsibility
2
legal or regulatory levels of pay, freedom to unionize and
the protection of labor union rights, and the freedom to
collectively negotiate labor contracts. The Company also
asks them to commit to ban all forms of discrimination (with
respect to recruitment, professional development and the end
of labor relations), to fight against corruption, and to respect
applicable law on the protection of the environment.
their non-material nature. They are therefore not specifically
reported on.
Social dialogue and collective agreements
The quality of the social dialogue is based on the numerous
exchanges between the Company’s management and the
employees and employee representatives.
Impact of products and services on the health
and safety of the Group’s customers
The direct impact of Dassault Systèmes’ products and services
on the health and safety of its customers is very limited given
In France, numerous meetings were organized by French
companies of the Group. Collective agreements, concerning one
or several subjects in connection with working and employment
conditions, were negotiated and signed each year:
2
Dassault
Systèmes SA
Dassault Data
Services SAS
Dassault
Systèmes
Provence SAS Archivideo SA Netvibes SAS
3DVIA SAS
Number of collective agreements in effect
at 12/31/2014
Number of collective agreements signed during 2014*
40
8
22
3
14
3
1
1
2
2
2
1
*
These agreements may cover several topics such as the Mandatory Annual Negotiations, equality and professional gender balance, organizing working time, replacing collective
by-laws related to the Universal Transmission of Assets, optional employee profit-sharing and compulsory profit-sharing.
In Germany, collective agreements are negotiated and signed
with the Group Council and the Workers’ Council of each
Company site (Stuttgart, Hanover, Aix-la-Chapelle and Berlin).
At December 31, 2014, there were 8 agreements in effect
in Stuttgart, 27 in Hanover, one in Aix-la-Chapelle, three in
Berlin and 14 with the Group Council.
In 2014, Dassault Systemes Deutschland GmbH signed eight
agreements at the level of the Group Council of which several
concern employee salaries, data confidentiality, training and
human resources management. Also, three agreements were
signed in Stuttgart, one in Aix-la-Chapelle and three in Berlin
on similar topics.
In the other main countries where the Group operates:
United Kingdom, United States, Canada, Japan, China and
India, there is no personnel representation or trade union in
Dassault Systèmes. In South Korea, as in all companies with
over 30 people, an employee representative Committee
is elected each year. Its role is to participate organizing the
Company’s social activities.
Furthermore, as part of
the conversion project of
Dassault Systèmes SA into a European company, a Special
Negotiation Body (“SNB”) has been formed in order to
negotiate with the top management the terms and conditions
of the employees involvement inside the European company.
The negotiations started in October 2014 and should be
completed by the signature of an agreement on these terms
and conditions. After the conversion into a European company,
Dassault Systèmes will have a new Committee for dialogue
with its European employees (the European Works Council) in
addition to the existing Works Council.
Health and safety
In accordance with the provisions of its Code of Business
Conduct, the Group undertakes to comply with all applicable
laws and regulations on health and safety in the workplace.
Coverage of healthcare costs
its employees has
The Group ensures that each of
medical coverage in compliance with local practices in the
countries where it has activities. Moreover, the Group offers
supplementary health coverage, for example in France, the
United Kingdom, the United States, Canada, South Korea,
Japan and India.
Health and medical checkup
The Group applies the provisions laid down by the countries
where it has activities.
For example, in France, its employees undergo regular
medical checkups. On the 3DS Paris Campus, a medical team
composed of two physicians and four nurses looks after the
health and well-being of all on-site employees. In Japan,
South Korea, China, India and the United States, individual
medical checkups are offered (this service is included in the
health coverage plan). Lastly, there are no specific provisions
in the United Kingdom, Canada or Germany.
Work accidents
Given the nature of Dassault Systèmes’ activity, few work
accidents are recorded. In France, in 2014, nine work or travel
accidents resulted in absence from work for more than one day.
There were nine in the United States and three in Germany,
while no days were recorded in the United Kingdom, Canada,
Japan, South Korea, China, and India.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 51
2 Social, societal and environmental responsibility
Social and Societal Responsibility
Health, Safety and Working Conditions Committee
and specific actions
In France, three Group companies have a Health, Safety and
Working Conditions Committee (CHSCT in French), which
meets several times during the year in each entity.
An agreement on preventing psychosocial risks was signed on
June 11, 2010 for a three-year period within Dassault Systèmes
SA. Following this agreement, a series of actions were started
and the workshops that had been set up have continued to
work on the following themes: “life balance and using means
of communication” and “workload and organization”. The
results of the work of the two working groups were reported
to the Works Council and the CHSCT on March 20, 2014. The
actions recommended by these groups were shared with all
employees early April 2014. The results of the working groups
efforts’ provided a basis to spearhead the initiatives referred
to in paragraph 2.1.5 “Acknowledging performance and
rewarding contribution to delivering the strategy ”.
At Dassault Systèmes Provence SAS, the main actions
concerning the prevention of psychosocial risks were
conducted in 2014. Four working groups, each one made
up of ten people, were set up to work on different themes
such as “Objectives, planning and reporting”, “Helping each
other, support and sharing expertise”, “Value recognition,
career and skills development”, “Planning and organizing
techniques”. Lastly, top management followed a training
course “Awareness and prevention of psychosocial risks” in
December 2014.
In addition, in certain countries (such as Canada and Germany),
employee representatives are responsible for communicating
with the management of the relevant legal entities on
employee health and safety.
2.1.7 Methodology for Employee Reporting
Scope
In general, employee reporting covers all Dassault Systèmes
companies at year end. Nevertheless, as indicated below, the
scope covered for certain indicators may be more limited.
Key employee indicators
For
its social reporting requirements, the Group chose
key indicators set out in paragraphs 2.1.2 “Organizing to
support growth and the delivery of the strategy” and 2.1.8
“Appendices regarding the Group’s Employee Headcount”.
They were chosen on the basis of the indicators in Article
R. 225-105-1 of the French Commercial Code and the specific
indicators in the Group’s Human Resources policy.
In this respect, Dassault Systèmes has defined the following
concepts:
(cid:125) “Employee Headcount”, which means employees of
Dassault Systèmes SA and subsidiaries in which it has at
least a 50% shareholding; and
(cid:125) “Total Workforce” which includes the Employee Headcount,
employees of companies in which it has less than a 50%
shareholding and outside service providers who have worked
more than a full month at period end. At December 31,
2014, employees of companies in which the Group has
less than a 50% shareholding include the employees of
3DPLM Ltd.
Data related to employees is calculated on the basis of “full-
time equivalents”, which corresponds to the proportion of
“hours worked per standard full-time work hours” and which
was jointly defined and shared by both Human Resources and
Finance teams.
Data related to employee arrivals and departures are
denominated in number of work agreements.
To make the reporting process more reliable, an internal
methodological guide including definitions and rules for
calculating each indicator is updated each year. Data reliability
checks are carried out at the time of accounting consolidation
as well as throughout the year in connection with analyzing
changes from the preceding periods.
Limits of the social report
The Company operates in numerous countries with local
regulations and practices which are not always harmonized
or consolidated. For example, as the notions generally used in
France to define socioprofessional categories (non-managers
and managers) are not used outside France, and over two-
thirds of the Dassault Systèmes employees work abroad, the
Group has decided to use the following categories: “Managers”
who are in charge of the teams, and the “Non-Managers” who
do not manage a team and are specialists in a specific field.
For the same reasons of local differences, the Company is not
able to provide consolidated data for overtime, the degree of
seriousness of work accidents and occupational illnesses.
52 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Social and Societal Responsibility
2
2
Gathering and consolidating employee data
Special attention must be made to the following points:
(cid:125) the data pertaining to employees and movements are taken
from human resources and financial management software,
both of which are deployed among all the companies and
represent 100% of the reporting perimeter;
(cid:125) the information pertaining to the compensation policy
relates to Employee Headcount. The data relating to
the total payroll and payroll taxes is provided by the
Dassault Systèmes finance department and covers the
Employee Headcount and the employees of companies in
which the Group has a shareholding below 50%, including
employees at 3DPLM Ltd;
(cid:125) the data relating to employees and the amount of the
payments made to outside service providers is provided
by the finance department. It concerns services referred to
as “Times and Material”, supporting a Dassault Systèmes
activity corresponding to its core business and in respect of
which the employees are present for at least one month,
paid on an hourly, daily or monthly basis;
(cid:125) the information pertaining to policies on business ethics,
fighting corruption, the Company’s social responsibility
principles and commitments ensuring basic rights and the
impacts of products and services on the health and safety
of the Group’s customers is provided by the ethics and
compliance department and covers 100% of the reporting
scope;
(cid:125) the data relating to the main policies concerning industrial
relations, health and safety, anti-discrimination initiatives,
employee and regulatory profit-sharing and other reward
systems, working time, absenteeism, fostering diversity
and gender balance, and social projects result from
additional discussions held with the Human Resources
managers in Dassault Systèmes’ major countries with over
150 employees (excluding companies acquired in 2014),
namely France, the United States, Canada, Germany, the
United Kingdom, Japan, South Korea, China and India,
representing just under 85% of the Group’s Employee
Headcount in 2014. Absenteeism data includes sick leave,
maternity and paternity leave, as well as work-related
accidents. Employees absent for a period exceeding two
years are no longer included in the absenteeism ratio. It
should be noted that this data is strongly influenced by local
regulations; in certain countries, sick leave is counted as paid
holiday leave. As such, absenteeism should be considered
on a country-by-country basis as it cannot be disclosed on
a consolidated basis;
(cid:125) the data relating to training for the countries with over
150 employees and mentioned above is extracted from the
“3DEXPERIENCE University” solution, excluding companies
acquired in 2014, covers 74% of the Group’s Employee
Headcount. Data recorded through the on-line training
platform is also taken into account for the same companies;
(cid:125) lastly, the scope is specified in the body of the text for the
other data not previously disclosed: company relations
with secondary and post-secondary education, Company
commitment to associations, 3DS INNOVATION Forwards,
Initiatives to reward work and
lives of
employees.
improve the
DASSAULT SYSTÈMES ANNUAL REPORT 2014 53
2 Social, societal and environmental responsibility
Social and Societal Responsibility
2.1.8 Appendices regarding the Group’s Employee Headcount
DISTRIBUTION BY AGE
Europe
Americas
Asia
Total
Total
Employees
2014
Employees
2014
%
Employees
2014
%
Employees
2014
%
Employees
2013
%
< 30 years old
31 to 40 years old
41 to 50 years old
> 51 years old
TOTAL AT DECEMBER 31
1,252
1,980
1,656
899
5,787
22%
34%
29%
15%
100%
372
1,013
1,066
998
3,449
11%
29%
31%
29%
299
816
507
155
17%
46%
28%
9%
1,923
3,809
3,229
2,052
17%
35%
29%
19%
100%
1,777
100% 11,013*
100%
1,381
2,836
2,647
1,723
8,587
%
16%
33%
31%
20%
100%
*
Indicator verified by the independent verifier.
EMPLOYEE TENURE
Europe
Americas
Asia
Total
Total
Temporary contract
Less than 5 years
6 to 15 years
More than 16 years
TOTAL AT DECEMBER 31
Employees
2014
168
2,708
1,916
995
5,787
Employees
2014
6
1,505
1,451
487
3,449
%
3%
47%
33%
17%
100%
Employees
2014
4
1,159
533
81
%
0%
44%
42%
14%
Employees
2014
178
5,372
3,900
1,563
%
0%
65%
30%
5%
%
2%
49%
35%
14%
100%
1,777
100% 11,013*
100%
Employees
2013
89
4,154
3,080
1,264
8,587
%
1%
48%
36%
15%
100%
*
Indicator verified by the independent verifier.
DISTRIBUTION BY SOCIO-PROFESSIONAL CATEGORY
Europe
Americas
Asia
Total
Total
Employees
2014
Employees
2014
%
Employees
2014
%
Employees
2014
%
Employees
2013
%
Women
“Managers”
“Non-Managers”
TOTAL WOMEN
Men
“Managers”
“Non-Managers”
TOTAL MEN
TOTAL AT DECEMBER 31
167
1,134
1,301
957
3,529
4,486
5,787
13%
87%
100%
21%
79%
100%
157
704
861
558
2,030
2,588
3,449
18%
82%
100%
22%
78%
100%
50
374
424
256
1,097
1,353
1,777
12%
88%
100%
19%
81%
100%
374
2,212
2,586
1,771
6,656
8,427
11,013*
14%
86%
100%
21%
79%
100%
314
1,633
1,947
1,494
5,146
6,640
8,587
*
Indicator verified by the independent verifier.
%
16%
84%
100%
22%
78%
100%
54 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Social and Societal Responsibility
2
FULL-TIME AND PART-TIME
Europe
Americas
Asia
Total
Total
Years ended December 31
Employees
2014
Full-time
Part-time
TOTAL
Women
Full-time
Part-time
TOTAL WOMEN
Men
Full-time
Part-time
TOTAL MEN
TOTAL
5,568
219
5,787
1,155
146
1,301
4,413
73
4,486
5,787
Employees
2014
%
96%
4%
3,432
17
Employees
2014
%
99%
1%
1,766
11
Employees
2014
%
99%
1%
10,766
247
Employees
2013
%
100%
3,449
100%
1,777
100% 11,013*
100%
89%
11%
100%
98%
2%
100%
848
13
861
98%
2%
100%
417
7
424
98%
2%
100%
2,420
166
2,586
2,584
100%
1,349
100%
8,346
4
2,588
3,449
0%
100%
4
1,353
1,777
0%
81
100%
8,427
100%
11,013*
98%
2%
94%
6%
100%
99%
1%
8,394
193
8,587
1,807
140
1,947
6,587
53
6,640
8,587
*
Indicator verified by the independent verifier.
AGE DISTRIBUTION OF NEW ARRIVALS
Europe
Americas
Asia
Total
Total
Employees
2014
Employees
2014
%
Employees
2014
%
Employees
2014
%
Employees
2013
%
< 30 years old
31 to 40 years old
41 to 50 years old
> 51 years old
TOTAL
778
713
353
78
41%
37%
18%
4%
238
314
292
175
23%
31%
29%
17%
1,922
100%
1,019
100%
256
329
119
18
722
*
Indicator verified by the independent verifier.
2
%
98%
2%
100%
93%
7%
100%
99%
1%
100%
%
40%
35%
17%
8%
35%
46%
16%
3%
1,272
1,356
764
271
35%
37%
21%
7%
574
508
254
113
100%
3,663*
100%
1,449
100%
DASSAULT SYSTÈMES ANNUAL REPORT 2014 55
2 Social, societal and environmental responsibility
Social and Societal Responsibility
2.1.9 NRE correspondence table
Article R. 225-105-1 of the French Commercial Code
Paragraphs
Page
Employment
Total employees and distribution by gender, age and geographic location
New hires and departures
Compensation
Organization of working time
Absenteeism
Labor Relations
Organization of employee relations and employee communications, consultation and negotiation
procedures
Summary of collective agreements
Health and Safety
Health and safety conditions
Summary of agreements reached with labor unions or employee representatives regarding health and
safety
Work accidents frequency and seriousness, and professional illnesses
Training
Training policies
Total training time
Equal treatment
Measures for the equal treatment of men and women
Measures for the employment of disabled persons
Anti-discrimination policy
Promotion of and respect for the provisions of the basic conventions of the International Labor
Organization on
Respect for the freedom of association and the right to collective negotiation
Eliminating discrimination at work
Eliminating forced labor
Eliminating child labor
Information on societal commitments and commitments to sustainable development
Regional, economic and social impact of the business in terms of employment and regional development,
on nearby or local populations
Relations with individuals and organizations interested by the Company’s business (job placement
associations, educational establishments, environmental protection associations, etc.),
partnership and sponsorship
Sub-contractors and suppliers: social responsibility. Taking social and environmental issues into account
in the purchasing policy. Importance of sub-contracting. Taking suppliers’ and sub-contractors’ social
and environmental responsibility into account in relations with them
Good citizen practices (actions to prevent corruption and measures to protect the health and safety
of consumers) and other measures to support human rights
Summary of information not published
Information not published due to lack of relevancy
Explanation
2.1.2
2.1.8
2.1.3
2.1.8
2.1.5
2.1.2
2.1.6
2.1.6
2.1.6
2.1.6
2.1.6
2.1.3
2.1.3
2.1.3
2.1.3
2.1.3
2.1.6
2.1.3
2.1.6
2.1.6
2.1.3
2.1.3
2.1.2
2.1.6
39
54
41
54
48
39
50
50
50
50
50
41
41
41
41
41
50
41
50
50
41
41
39
50
Frequency/severity rate of work accidents.
Professional illnesses.
Given the nature of Dassault Systèmes’ activity, the number of work accidents is low
and consists of only a few cases per year. This indicator is not calculated.
56 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Environmental Responsibility
2
2.2 Environmental Responsibility
Systèmes’
environmental
Dassault
is
characterized by the indirect positive and negative impacts
of the use of its software by its customers, and by its direct
negative impact of its activities on the environment (see
paragraph 1.4.1.1 “Summary”):
responsibility
(cid:125) Dassault Systèmes’ software solutions allow its customers
to reduce the environmental impact of their products from
the design stage. They can help reduce the consumption of
raw materials through digital modeling, optimize energy
consumption and working processes and manage the
compliance of products with environmental standards. This
is the potentially positive impact of Dassault Systèmes’
products on the environment;
(cid:125) the use of the Group’s software by its customers generates
indirect energy consumption for Dassault Systèmes. This
consumption is the potentially indirect negative impact of
Dassault Systèmes’ products on the environment;
2
(cid:125) all of Dassault Systèmes’ operations are located in offices
(see paragraph 1.2.3 “Facilities Strategy”) and in data
centers. For its activities, the Group uses computer hardware
and employees are required to travel regularly to the Group’s
sites, and to visit customers and partners. The Group’s
environmental impact is therefore mainly generated by
the energy consumption of its buildings and data centers;
the greenhouse gas emissions produced by employee
travel; and the electrical and electronic waste generated
by computer-based activities. These three
indicators
are “primary” for Dassault Systèmes. Other indicators
are monitored by the Group but with less criticality in
relation to the activity carried out (see paragraph 2.2.2.3
“Dassault Systèmes and environmental management –
Environmental Management”).
In the light of these various contributions, Dassault Systèmes
is working on the development of a model to define its overall
net positive impact on the environment.
2.2.1
Industrial and Environmental Risk
The Group is not aware of any industrial or environmental risks
which may have a significant impact on its financial condition
or operating results, and it believes that its business has a very
limited environmental impact:
(cid:125) a significant portion of its assets are intangible, which
reduces industrial and environmental risk;
(cid:125) none of the Company’s sites produces dangerous waste or
waste with an environmental impact on the ground, air or
water, and none of them meets criteria set forth under the
European SEVESO directive regarding sites at risk due to
dangerous substances, or is classified under ICPE (Classified
Installation for the Protection of the Environment or
installations classées – et présentant des risques – pour la
protection de l'environnement);
(cid:125) the Company does not believe that it is directly exposed to
climate change issues in the short or medium-term;
(cid:125) Dassault Systèmes’ business does not have any known
negative impact on biodiversity, nor does it create noise or
odors which may create a nuisance locally. In addition, the
Company is not involved with soil usage matters.
The only aspect for which the Group believes there exists a
minor environmental risk, which would not have a significant
impact on its financial condition or results of operations, is
the fuel storage at the 3DS Paris Campus and the 3DS Boston
Campus, which would be used to produce electricity in case of
an electrical shortage.
Based on the Company’s limited industrial and environmental
risks, costs resulting from evaluating, preventing and treating
industrial and environmental risks are not significant and are
included under different line items representing investments
and expenses in the consolidated financial statements.
In 2014, no provisions or guaranties for environmental
risks were recorded in the Group’s consolidated financial
statements. In addition, no expense was recognized in the
financial statements related to a court judgment regarding
environmental issues or actions taken to remediate any
environmental damage.
To anticipate any regulatory risks related to environmental
matters, Dassault Systèmes’ legal department and Public
Affairs and Sustainable Development department closely
follow environmental regulations which may have an effect
on its business.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 57
2 Social, societal and environmental responsibility
Environmental Responsibility
2.2.2 Environmental Report
impact of
limited direct environmental
Despite the
its
business relative to its operations, Dassault Systèmes is
aware of its responsibility for protecting the environment. It
has made sustainable development central to its objectives,
with a strategy based on sustainable innovation, and has
implemented a strategy for optimizing and transforming its
activities to reduce its environmental impact.
2.2.2.1
3DEXPERIENCE Platform
for Sustainability: Apps and Solutions
for sustainable development
Companies today face a series of challenges that are
both
technological and ecological. Dassault Systèmes
3DEXPERIENCE platform helps its customers achieve their
combined sustainability and business goals through a portfolio
of sustainability Applications enriching several of its Industry
Solutions Experiences, based on:
3D Modeling Technologies
The Company’s portfolio of modeling technologies makes it
possible to create scientifically accurate representations of the
environmental impacts of product. These technologies also
offer techniques to reduce these impacts, such as eco-design for
predictive environmental assessment and virtual prototyping,
which improve the carbon footprint, energy consumption,
human health impacts, and overall sustainability of products
and systems. For example, SOLIDWORKS Sustainability
features an integrated Life Cycle Assessment (LCA) dashboard
that estimates the environmental implications of each design
decision using several environmental
indicators. ASSA
ABLOY, the global leader in door-opening solutions, used
SOLIDWORKS Sustainability to reduce product environmental
impact and material usage while cutting their product material
and energy costs by 15%.
Virtual+Real Technologies
Technologies that enable real-time realistic simulation can
help optimize the physical world in virtual universes, leading
to reduced environmental impacts. For complex products,
the Company’s simulation technologies aid in performance
testing and light weighting that allows engineers to verify
functionality and integrity while optimizing material usage.
Factory and production systems can be executed with
minimal material and energy expenditure to enable “green”
manufacturing. Ultimately, end consumer usage can be
58 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
simulated to examine and reduce environmental impacts
across the entire life cycle. For example, packaging designer
Amcor used SIMULIA to simulate complex design interactions,
resulting in a 27% reduction of carbon footprint and plastic
resin usage while maintaining product integrity.
Intelligent Information Technologies
The searching, sorting, filtering, navigating, real-time analysis
and understanding of large amounts of environmental data
is central to the achievement of sustainable innovation. With
the scope of data requirements expanded from the enterprise
to the entire value chain, so-called extended producer
responsibility demands both sophisticated and scalable
access to these big data, allowing information intelligence
applications that can dashboard environmental
impacts
across the extended enterprise. For example, the EXALEAD
search-based infrastructure enables the management of
structured and unstructured environmental data, providing
decision support to execute corporate sustainability and
impact-reduction strategies. Central to the success of these
sustainability strategies is social listening: NETVIBES enables
customers to gauge public sentiment about sustainability
trends and campaigns.
technologies allow companies
Connectivity Technologies
Connecting data and people by breaking down silos in
organizations is key to achieving sustainability strategies.
Connectivity
to build
internal and external communities to manage sustainability
efficiently. They also make it possible to connect product data
with governmental data to proactively manage adherence
to government and industry environmental regulations and
standards, such as the Restriction of Hazardous Substances
(RoHS) directive and the management of conflict minerals.
Dassault Systèmes’ solution for environmental compliance
and materials intelligence help maintain a proactive risk
minimization strategy, and make it possible to engage the
people and communities that are critical to the success of
sustainability strategies. For example, Agilent Technologies,
a leader in test and measurement systems in electronics and
bio-analytic instruments, uses ENOVIA Materials Compliance
Management
(MCM), an automated, enterprise-wide
materials compliance data tracking system, to demonstrate
compliance with stringent environmental regulations for
more than 1,800 products and 160,000 parts from more than
7,000 suppliers.
Dassault Systèmes is a forerunner in creating 3DEXPERIENCE
for sustainable innovation to help customers achieve a positive
environmental impact on the planet and grow their businesses
sustainably. Our 3DEXPERIENCE platform lets innovators
truly understand the impact of their ideas and processes on
people and the environment, to realize the vision of a more
sustainable world.
2.2.2.2
Industry Collaborations
on sustainability
In addition to aiding its customers directly, the Company
engages in several industry collaborations in order to leverage
its expertise and leadership for the furthering of sustainable
collaboration:
(cid:125) International Aerospace Environmental Group (IAEGTM). The
IAEGTM is a self-governed trade association that represents
most of the global commercial aerospace industry, such as
Boeing and Airbus, as well as the global defense aerospace
industry, such as Lockheed Martin, Northrop Grumman
and Safran group. Dassault Systèmes is working with the
IAEGTM to aid in the development of chemical material
declaration and reporting systems, supplier sustainability
surveys, and the aerospace sector’s official guidance for the
measurement of greenhouse gases (GHGs) under the World
Resources Institute’s GHG Protocol;
(cid:125) Sustainable Apparel Coalition (SAC). The SAC is a trade
organization comprised of brands, retailers, manufacturers,
government, and non-governmental organizations and
academic experts, representing more than a third of the
global apparel and footwear market, and is working to
reduce the environmental and social impacts of apparel and
footwear products around the world. Dassault Systèmes
is engaged with the SAC to provide its leadership in life
cycle assessment (LCA)-based design and footprinting
methodologies, and to advise and assist its customers in
challenges involved with a proactive adoption of the SAC’s
Higg Index, a suite of assessment tools that standardizes the
measurement of the environmental and social impacts of
apparel and footwear products across the product lifecycle
and throughout the value chain;
(cid:125) Sustainability and Health Initiative for NetPositive Enteprise
(SHINE). SHINE consists of a consortium of sustainability-
including Owens Corning, Eaton
focused companies,
Corporation, Abbott Laboratories, Johnson & Johnson and
Dassault Systèmes, and is led by the Center for Health and
the Global Environment, part of the School of Public Health
at Harvard. The goal of SHINE is to revolutionize corporate
sustainability strategy by managing Handprints, or positive
impacts, in addition to Footprints (negative impacts), the
comparison of which determines if an enterprise can be called
Net Positive. Dassault Systèmes is contributing significant
support and thought leadership to aid in the development of
a new accounting standard and management methodology
for environmental Handprinting.
Social, societal and environmental responsibility
Environmental Responsibility
2
2
2.2.2.3 Dassault Systèmes and environmental
management
Environmental Management
The Public Affairs and Sustainable Development department
is responsible for environmental reporting, determining how
to reduce the Company’s environmental impact, and creating
awareness among employees regarding the importance of
sustainable development.
Dassault Systèmes has formed an
international team
to strengthen the steps taken to reduce the Company’s
environmental impact. A “Sustainability Leader” in each
geographical region is responsible for ensuring the collection
of environmental data, the review of environmental matters
in his/her region, the follow up on environmental indicators,
and, for the Group’s principal sites, the creation of a local
environmental management system. Each Sustainability
Leader is supported by a “Green Team” made up of volunteers
at each site. The Green Team supports actions for reducing the
site’s environmental impact.
The Group carried out a project to analyze the material nature
of its indicators, focusing, in particular, on the key “primary”
indicators related to its activity. The Dassault Systèmes
primary indicators are: electricity consumption, greenhouse
gas emissions and waste electronic and electrical equipment.
The remaining indicators are deemed “secondary” and relate
to paper consumption, water consumption and general waste.
(See paragraph 2.2.2.4 “Methodology for Environmental
Reporting”).
Employees invested in the Group’s
environmental strategy
Dassault Systèmes pursues an ongoing policy of employee
awareness by involving them in steps taken to save water and
energy through presentations on environmentally-friendly
gestures and technologies that can reduce the environmental
impact of the Company’s activities.
In 2014, the process was enhanced across all geographical
regions with the implementation of local initiatives to raise
employee awareness of environmentally-friendly gestures.
For example, on the 3DS Boston Campus, the North American
Green Team organized the Spring Green Week. During this
event, employees were taught about energy efficiency
and the recycling of electrical and electronic waste. On the
Providence site and the 3DS Boston Campus, the employees
were also made aware of the impact of transport, and have
been encouraged to ride their bike to work.
communication week dedicated
The
sustainable
development was renewed in 2014 on the 3DS Paris Campus,
with the theme of Consommer autrement…oui mais comment?
(Consuming differently...yes, but how?) in collaboration with
the Public Affairs and Sustainable Development department
and the Consumer Packaged Goods & Retail team; during this
to
DASSAULT SYSTÈMES ANNUAL REPORT 2014 59
2 Social, societal and environmental responsibility
Environmental Responsibility
week, employees were invited to participate in the “Perfect
Shelf” experimental solution, an application developed by
Dassault Systèmes, and were made aware of the importance of
sustainable consumption with a 3D representation of a virtual
supermarket shelf. The objective of the experience was to put
forth the so-called “sustainable” products on the shelves and
to guide the choice of consumers to such products.
Finally, in November 2014, in recognition of Disability Week
and for a one-month period, a Collecte Solidaire – Agissons
Ensemble (Giving for Others – Let’s Act Together) event
was jointly organized on the 3DS Paris Campus by the
Dassault Systèmes SA Mission Handicap (Disability Task
Force) and the Public Affairs and Sustainable Development
department. Employees were asked to bring their obsolete
electrical and electronic equipment and appliances no longer
in working order. The collected equipment was sent for
recycling by a company in the protected worker sector in the
French department of Les Yvelines and 860 kg of equipment
was recycled by disabled employees.
2.2.2.4
Company Environmental Indicators
The Group published two categories of indicators: “primary”
indicators, which are directly linked to the Group’s business and
“secondary” indicators (see paragraph 2.2.2.5 “Methodology
for Environmental Reporting”).
in
the environmental
Data presented
report covers
Dassault Systèmes SA and all companies in respect of which
it has a shareholding exceeding 50%. Data from companies
acquired during 2014 and from sites with fewer than 35
employees is excluded. See paragraph 2.2.2.5 “Methodology
for Environmental Reporting”.
Energy consumption
Consideration of environmental matters in the Company’s
operational locations
Dassault Systèmes’ desire to limit its environmental impact
is reflected through its decisions regarding its operational
locations.
Since 2008, the Group has implemented a policy of setting
up its activities in offices certified by the local environmental
standard. In 2014, 57% of employees worked in offices
Electricity consumption (in mWh)
Europe
of which 3DS Paris Campus
Americas
Asia
TOTAL
*
Indicator verified by the independent verifier.
60 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
certified by standards such as Haute Qualité Environnementale
(High Environmental Quality) in France and LEED in the
United States, or sites which applied an environmental
management system such as ISO 14001. These certifications
allow the Company to use environmentally-friendly buildings.
Environmental performance is one of the criteria used to select
and fit new buildings.
Dassault Systèmes’ world headquarters
located at the
3DS Paris Campus in Vélizy-Villacoublay (France) are certified
as NF Service Sector Buildings – HQE under the HQE (High
Environmental Quality) system. To the extent possible,
Dassault Systèmes seeks to work with companies that are, or
are in the process of becoming, ISO 9001 and 14001 certified.
The Company has put in place real-time monitoring of the
results of operational incidents and building maintenance with
the assistance of ISO 9001 certified companies.
The exterior of the 3DS Boston Campus is certified LEED Gold,
and in 2014 the campus received LEED Platinum certification
for its interior. LEED is an American certification awarded to
buildings designed with the goal of optimizing environmental
performance. To optimize
its energy consumption, the
3DS Boston Campus is equipped with condensation heaters,
high-yield air conditioning, and daylight sensors.
In 2014, the employees at the Krakow site in Poland and
the personnel working at the Providence facility in the
United States moved into LEED Gold certified buildings. Just
like the 3DS Boston Campus, these buildings are equipped
with energy and water saving technology and they also favor
the penetration of natural light.
In the rest of the world, the buildings in Singapore, Shanghai
(China), Pune (India), Montreal (Canada) and Stuttgart
(Germany) are certified according to local environmental
standards.
Energy
The information below concerns electricity and natural gas
consumption on Dassault Systèmes sites and in its data
centers. Natural gas consumption represents 6% of total
energy consumption. The Company does not use renewable
energy on its sites but has included in certain of its energy
contracts, for example at the Stuttgart and Munich sites in
Germany, the purchase of electricity produced by renewable
resources.
2014
31,380
21,000
21,260
2,000
2013
32,600
22,000
22,130
2,980
54,640*
57,710*
Social, societal and environmental responsibility
Environmental Responsibility
2
2
Dassault Systèmes’ travel policy limits the impact of travel on
the environment. Under this policy, employees are encouraged
to schedule meetings by conference call and video conference
rather than by physical travel, use train travel rather than air
travel for trips under three hours in length, and use economy
class for air travel (the carbon footprint of business class being
substantially greater than for economy class).
Greenhouse gas emissions
To analyze
footprint on a global basis,
its carbon
Dassault Systèmes uses the “GHG Protocol” (Greenhouse Gas
Protocol). This method of evaluation of greenhouse gas effects
was launched in 2001 by the World Business Council for
Sustainable Development (WBCSD) and the World Resources
Institute (WRI).
The GHG Protocol divides the operational perimeter of
greenhouse gas emissions as follows:
(cid:125) Scope 1: direct emissions resulting from the combustion
of fossil fuels from resources owned or controlled by
the enterprise;
(cid:125) Scope 2: indirect emissions resulting from the purchase or
production of electricity;
(cid:125) Scope 3: all other indirect emissions, from the extended
supply chain to transport of goods and persons.
Electricity consumption of the 3DS Paris Campus fell by 5%
between 2013 and 2014. This reduction is mainly due to
favorable weather during the whole of 2014.
In all regions, electricity consumption decreased between
2013 and 2014 on a like-for-like basis, despite the increase
in the Group’s activities. This energy efficiency is mainly
into environmentally-
due to favorable weather, moves
friendly buildings and heightened employee awareness on
environmentally-friendly gestures.
Dassault Systèmes has located part of its servers at several
data centers throughout the world. Energy consumption in
these centers is included in the total electricity consumption
above. In 2010, the Group launched a process to virtualize its
servers. The “virtualization” of servers leads to better use of
material, savings in space at the data center and a reduction in
power consumed by the infrastructure, and thus a reduction in
greenhouse gas emissions. The percentage of virtual servers in
the world was estimated at 48% for 2012 according to a study
conducted by Gartner. Dassault Systèmes is far ahead in this
area with more than 80% of the servers at its principal data
center already virtualized.
Greenhouse Gas Emissions
Group transportation optimization policy
Since the Company’s business
is publishing software,
transportation is the principal source of its greenhouse
gas emissions.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 61
2 Social, societal and environmental responsibility
Environmental Responsibility
SCOPE 1
Emissions due to on-site natural gas and fuel consumption
Total emissions due to the use of company vehicles
Emissions due to the use of company vehicles in Europe
Emissions due to the use of company vehicles in the Americas
Emissions due to the use of company vehicles in Asia
Emissions due to the use of refrigerants
TOTAL SCOPE 1
SCOPE 2
Total emissions due to purchases of electricity
Emissions due to purchases of electricity in Europe
Emissions due to purchases of electricity in the Americas
Emissions due to purchases of electricity in Asia
TOTAL SCOPE 2
SCOPE 3
Total emissions due to employee business air travel
Emissions due to employee business air travel in Europe
Emissions due to employee business air travel in the Americas
Emissions due to employee business air travel in Asia
Total emissions due to employee business travel by train
Emissions due to employee travel by train in Europe
Emissions due to employee travel by train in the Americas
Emissions due to employee travel by train in Asia
Total emissions due to employee travel by personal car in connection with work
Emissions due to employee travel using their personal vehicles in Europe
Emissions due to employee travel using their personal vehicles in the Americas
Emissions due to employee travel using their personal vehicles in Asia
TOTAL SCOPE 3
TOTAL GREENHOUSE GAS EMISSIONS (SCOPES 1 + 2 + 3)
*
Indicator verified by the independent verifier.
2014 Metric
Tons CO2
emissions
2013 Metric
Tons CO2
emissions
670
2,340
2,100
–
240
870
670
2,100
1,900
–
200
535
3,880
3,305
10,090
11,190
3,230
5,655
1,205
3,550
6,000
1,640
10,090
11,190
21,870
18,965
8,020
9,210
4,640
1,446
235
1
1,210
2,045
525
1,040
480
7,920
7,595
3,450
1,570
217
3
1,350
1,905
525
945
435
25,361
39,331*
22,440
36,935*
Greenhouse gas emissions grew by 6% between 2013 and
2014 mainly driven by the increase in the Group’s activities
leading to business travel growth.
In terms of carbon intensity by employee, greenhouse gas
emissions decreased to 5.20 tCO2 per employee in 2014
compared to 5.30 tCO2 per employee in 2013. This reduction
can be explained by favorable weather during the whole of
2014 and by initiatives implemented by the Sustainability
Leaders and Green Teams in each region.
Specific waste treatment
Environmental considerations of the Company’s computer
equipment management policy
Dassault Systèmes places significant importance on managing
its computer equipment both in terms of usage and recycling.
The Company’s computer equipment
includes desktop
computers, laptop computers and the servers of its data center
and has received the “Energy Star” certificate. When buying
new material, the Company gives preference to internationally
recognized environmental certificates such as “Energy Star”
and “TCO”.
62 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Environmental Responsibility
2
Specific waste
% of specific waste recycled according to environmental standards
Quantity of WEEE (1 ) recycled according to environmental standards (in kg)
Europe
of which 3DS Paris Campus
Americas
Asia
TOTAL
*
Indicator verified by the independent verifier.
(1 ) WEEE: Waste Electronic and Electrical Equipment.
In 2013 and 2014, all WEEE were recycled according to environmental standards.
Water consumption
Water consumption (in cubic meters)
Europe
of which 3DS Paris Campus
Americas
Asia
TOTAL
2014
100
9,420
8,325
3,020
510
2013
100
13,700
13,140
4,350
2,100
12,950 *
20,150 *
2
2014
29,980
20,624
31,910
4,870
66,760
2013
26,000
20,000
30,000
4,970
60,970
The data related to water consumption presented above is mainly based on estimates and as such may differ from actual water
consumption (see paragraph 2.2.2.5 “Methodology for Environmental Reporting – Limitations on environmental reporting”).
Paper and packaging
Paper consumption (in metric tons)
Europe
of which 3DS Paris Campus
Americas
Asia
TOTAL SHARES
2014
2013
28
18
13
8
49
34
22
15
8
57
On the 3DS Paris Campus, total paper consumption amounted
to 18 metric tons in 2014 compared with 22 metric tons in
2013. On a per-employee basis, this consumption fell from
9.8 kg in 2013 to 7.8 kg per employee in 2014, representing
a 20% decrease. This decrease was mainly due to the ongoing
digitalization of data at the 3DS Paris Campus and the efficient
management of paper consumption by employees.
supplier responsible for packaging complies with “REACH”
(“Registration, Evaluation, Authorization and Restriction
of Chemicals”), and received the “Imprim’Vert” label for
its printing facility, (which certifies, among other things,
that no toxic products are used and that waste is sorted for
recycling). The supplier’s packaging is 100% recyclable and
biodegradable.
On the 3DS Paris Campus, the paper used is “FSC certified”, an
eco-label which ensures sustainable forest management. At a
global level, 95% of employees use paper that is recycled or
“FSC” or “PEFC” certified, compared to 93% in 2013.
Packaging at Dassault Systèmes consists principally of
packaging for the Company’s software products. The
General waste treatment
In light of the nature of its business, Dassault Systèmes
generates primarily ordinary waste such as paper, cardboard
and plastic.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 63
2 Social, societal and environmental responsibility
Environmental Responsibility
The table -below indicates the percentage of employees with access to recycling facilities by geographic region:
Percentage of employees with access to recycling facilities at their work location
Europe
of which 3DS Paris Campus
Americas
Asia
% OF EMPLOYEES WITH ACCESS TO RECYCLING FACILITIES AT THEIR WORK LOCATION
2014
89%
100%
100%
100%
94%
2013
94%
100%
98%
87%
95%
The Cracow site in Poland, integrated into the environmental
reporting scope in 2014, does not carry out recycling.
The waste treatment service provider of the 3DS Paris Campus
was unable to communicate any actionable intelligence related
to the waste quantity recycled on site in 2014. Various options
are currently under discussion to solve the problem.
2.2.2.5 Methodology for Environmental
Reporting
Methodology and scope of environmental reporting
The Dassault Systèmes Methodology for Environmental
Reporting is summarized in the “Environmental reporting
protocol”. The protocol defines:
(cid:125) the distinction between primary environmental indicators
and secondary indicators;
(cid:125) the methodology
for collecting and consolidating
environmental information;
(cid:125) the scope for collecting environmental data.
In application of the provisions of Article 225 of the law
referred to as “Grenelle II”, the environmental reporting target
scope includes Dassault Systèmes SA and all the companies in
respect of which it has a shareholding exceeding 50%. It should
be noted that companies acquired during the period (primarily
Accelrys, Quintiq and RTT), which represent approximately
20% of employee headcount as of December 31, 2014 and
which will not be integrated until 2015 (after a complete
operating year), are excluded from the 2014 environmental
reporting scope.
The environmental reporting scope currently comprises all
the sites with over 35 employees, or 86% of the target scope
described above, compared to 85% in 2013.
Environmental indicators determined using this methodology
for 2014 are presented in paragraph 2.2.2.4 “Company
Environmental Indicators”.
The Company’s environmental reporting may evolve as part
of the ongoing process of improvement undertaken by the
Company, or to take changes in applicable regulations into
account.
Collecting and consolidating environmental data
Environmental data was collected by the Sustainability
Leaders and consolidated by the Public Affairs and Sustainable
Development department, based on the reporting protocol.
For selected questions, such as business travel and data
concerning electronic waste, external service providers were
also consulted.
To simplify the consolidation of environmental data, a
dedicated software application was rolled out. This new
solution facilitates the structuring and standardization of
environmental data (regarding all parameters but scope 3 data
related to greenhouse gas emissions), like-for-like comparisons
and an increase in the frequency of information collection
from annual to quarterly. The deployment of this application
was finalized in 2014 and has strengthened the management
of environmental performance on a global scale.
Primary indicators are collected on a quarterly basis by the
Sustainability Leaders and are reviewed and published in a
quarterly report issued by the Public Affairs and Sustainable
Development department. These indicators are presented in
detail in this report. They are also checked by the independent
verifier and are subject to limited assurance.
Secondary indicators are collected on a half-yearly basis by
the Sustainability Leaders and variances are reviewed by the
Public Affairs and Sustainable Development department.
Limitations on environmental reporting
In certain cases, information cannot be provided on the bases
of actual consumption e.g. for the sites with service charges
related to water consumption and recharging the refrigerant
to use the air-conditioning system are included in the lease
and, for some foreign subsidiaries representing a small
contribution in the ratio, and for which the data related to
travel is not available on the basis of the same format as the
rest of the scope. In these cases, the Environmental Reporting
Protocol specifies the procedure to follow in order to make the
estimations required (e.g. an estimation of water and energy
consumption is made on the basis of the averages recorded on
the other sites in the geographic area based on the number
of employees or square meters taken up). As a result, actual
consumption may be different from estimates.
64 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Environmental Responsibility
2
Regarding waste treatment, waste treatment and collection are
handled for most subsidiaries by local government, which does
not furnish any information on collected waste. It is therefore
not possible to provide any information on the amount of
waste generated. Dassault Systèmes has nevertheless inquired
of all subsidiaries included in the 2014 reporting scope as to
whether recycling was put in place. Consequently, the Group
produces information on the percentage of sites adopting
waste recycling rather than on the quantity of waste treated
(see paragraph 2.2.2.4 “Company Environmental Indicators –
Specific waste treatment”).
2.2.2.6 NRE correspondence table
Article R. 225-105-1 of the French Commercial Code
General policy on environmental issues
Organizing the Company to take into account environmental issues. If need be, environmental assessment
or certification processes
Employee training and information actions regarding environmental protection
Resources devoted to the prevention of environmental risks and pollution
Amount of provisions and guarantees for environmental risks
Pollution and waste management
Measures for preventing, recycling or eliminating waste
Sustainable use of resources
Water consumption
Consumption of raw materials
Measures taken to improve the efficiency of the use of raw materials
Energy consumption
Measures taken to improve energy efficiency and the use of renewable energy
Climate change
Greenhouse gas emissions
Summary of information not published
Information not published due to lack of relevancy
Explanation
2
Paragraphs
Page
2.2.2.3
2.2.2.3
2.2.1
2.2.1
2.2.2.4
2.2.2.4
2.2.2.4
2.2.2.4
2.2.2.4
2.2.2.4
2.2.2.4
59
59
57
57
60
60
60
60
60
60
60
Consideration of noise pollution
Land use
Water supply in accordance with local constraints
Adaptation to the consequences of climate change
Biodiversity protection
Given Dassault Systèmes’ activity, these topics are not covered.
The Group is not aware of any noise pollution that could negatively impact
the environment, nor is it aware of any impact on biodiversity. With regards
to land use, the Group is only a commercial user, and the Group is not aware
of any local constraints with regards to water supply. The Group does
not believe that it is at risk with regards to climate change in the near-or
mid-term.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 65
2 Social, societal and environmental responsibility
Independent Verifi er’s Attestation and Assurance Report on Social, Societal and Environmental Information
2.3
Independent V erifier’s Attestation and Assurance
Report on Social, Societal and Environmental
Information
This is a free translation into English of the original report issued in the French language and it is provided solely for the
convenience of English speaking users. This report should be read in conjunction with, and construed in accordance with, French
law and professional standards applicable in France.
To the shareholders,
In our quality as an independent verifier accredited by the COFRAC (1) under the number n° 3-1050, and as a member of the
network of one of the statutory auditors of the company Dassault Systèmes, we present our report on the consolidated social,
environmental and societal information established for the year ended on the 31st December 2014, presented in chapter 2 of the
management report, hereafter referred to as the “CSR Information,” pursuant to the provisions of the article L.225-102-1 of the
French Commercial code (Code de commerce).
Responsibility of the company .
It is the responsibility of the Board of Directors to establish a management report including CSR Information referred to in the
article R. 225-105-1 of the French Commercial code (Code de commerce), in accordance with the protocols used by the company,
consisting in HR reporting instructions and an environmental reporting protocol in their versions dated October 2014 and
December 2014, respectively (hereafter referred to as the “Criteria”), and of which a summary is included in section 2.1.7 (social
reporting) and in section 2.2.2.5 (environmental reporting) of the management report, as well as available at the company’s
headquarters.
Independence and quality control
Our independence is defined by regulatory requirements, the Code of Ethics of our profession as well as the provisions in the
article L. 822-11 of the French Commercial code (Code de commerce). In addition, we have implemented a quality control system,
including documented policies and procedures to ensure compliance with ethical standards, professional standards and applicable
laws and regulations.
Responsibility of the independent verifier
It is our role, based on our work:
(cid:125) to attest whether the required CSR Information is present in the management report or, in the case of its omission, that an
appropriate explanation has been provided, in accordance with the third paragraph of R. 225-105 of the French Commercial
code (Code de commerce) (Attestation of presence of CSR Information);
(cid:125) to express a limited assurance conclusion, that the CSR Information, overall, is fairly presented, in all material aspects, in
according with the Criteria (Limited assurance on CSR Information).
Our verification work was undertaken by a team of four people between October 2014 and March 2015 for an estimated duration
of seven weeks.
We conducted the work described below in accordance with the professional standards applicable in France and the Order of 13
May 2013 determining the conditions under which an independent third-party verifier conducts its mission, and in relation to the
opinion of fairness and the reasonable assurance report, in accordance with the international standard ISAE 3000 (2).
(1 ) Scope available at www.cofrac.fr
(2 ) ISAE 3000 – Assurance engagements other than audits or reviews of historical information
66 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
2
2
Social, societal and environmental responsibility
Independent Verifi er’s Attestation and Assurance Report on Social, Societal and Environmental Information
1. Attestation of presence of CSR Information
We obtained an understanding of the company’s CSR issues, based on interviews with the management of relevant departments,
a presentation of the company’s strategy on sustainable development based on the social and environmental consequences linked
to the activities of the company and its societal commitments, as well as, where appropriate, resulting actions or programmes.
We have compared the information presented in the management report with the list as provided for in the Article R. 225-105-1
of the French Commercial code (Code de commerce).
In the absence of certain consolidated information, we have verified that the explanations were provided in accordance with the
provisions in Article R. 225-105-1, paragraph 3, of the French Commercial code (Code de commerce).
We verified that the information covers the consolidated perimeter, namely the entity and its subsidiaries, as aligned with the
meaning of the Article L.233-1 and the entities which it controls, as aligned with the meaning of the Article L.233-3 of the
French Commercial code (Code de commerce) with the limitations specified in the Methodological Note in sections 2.1.7 and
2.2.2.5 of chapter 2 of the management report, notably the fact that entities with less than 35 employees and entities acquired
in 2014 are not included in the environmental reporting.
Based on this work, and given the limitations mentioned above, we confirm the presence in the management report of the
required CSR information.
2. Limited assurance on CSR Information
Nature and scope of the work
We undertook a dozen interviews with the people responsible for the preparation of the CSR Information in the different
departments, including people in the Human Resources, Public Affairs and Sustainable Development, Products and Services
functions, who are in charge of the data collection process and, if applicable, the people responsible for internal control processes
and risk management, in order to:
(cid:125) a ssess the suitability of the Criteria for reporting, in relation to their relevance, completeness, reliability, neutrality, and
understandability, taking into consideration, if relevant, industry standards;
(cid:125) v erify the implementation of the process for the collection, compilation, processing and control for completeness and consistency
of the CSR Information and identify the procedures for internal control and risk management related to the preparation of the
CSR Information.
We determined the nature and extent of our tests and inspections based on the nature and importance of the CSR Information,
in relation to the characteristics of the Company, its social and environmental issues, its strategy in relation to sustainable
development and industry best practices.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 67
2 Social, societal and environmental responsibility
Independent Verifi er’s Attestation and Assurance Report on Social, Societal and Environmental Information
For the CSR Information which we considered the most important(3):
(cid:125) a t the level of the consolidated entity, we consulted documentary sources and conducted interviews to corroborate the qualitative
information (organisation, policies, actions, etc.), we implemented analytical procedures on the quantitative information
and verified, on a test basis, the calculations and the compilation of the information, and also verified their coherence and
consistency with the other information presented in the management report;
(cid:125) a t the level of the representative sample of entities that we selected (4) based on their activity, their contribution to the
consolidated indicators, their location and a risk analysis, we undertook interviews to verify the correct application of the
procedures and undertook detailed tests on the basis of samples, consisting in verifying the calculations made and linking
them with supporting documentation. The sample reviewed therefore represented on average 36% of the workforce and
between 40% and 68% for quantitative environmental information(5).
For the other consolidated CSR information, we assessed their consistency in relation to our knowledge of the company.
Finally, we assessed the relevance of the explanations provided, if appropriate, in the partial or total absence of certain information.
We consider that the sample methods and sizes of the samples that we considered by exercising our professional judgment allow
us to express a limited assurance conclusion; an assurance of a higher level would have required more extensive verification work.
Due to the necessary use of sampling techniques and other limitations inherent in the functioning of any information and internal
control system, the risk of non-detection of a significant anomaly in the CSR Information cannot be entirely eliminated.
Conclusion
Based on our work, we have not identified any significant misstatement that causes us to believe that the CSR Information, taken
together, has not been fairly presented, in compliance with the Criteria.
Paris-La Défense, the 23rd March 2015
French original signed by:
Independent Verifier
ERNST & YOUNG et Associés
Eric Mugnier
Partner, sustainable development
Bruno Perrin
Partner
(3) Environmental and societal information:
Indicators (quantitative information): energy consumption (in MWh), greenhouse gas emissions (in tonnes of CO2 equivalent), quantity of waste
electrical and electronic equipment recycled according to environmental norms (in kg).
Qualitative information: general environmental policy (organisation, evaluation or certification procedures), measures for preventing, recycling and
eliminating waste, sustainable use of resources and climate change (energy consumption, measures taken to improve energy efficiency and the use of
renewable energy), importance of sub-contracting and the consideration of environmental and social issues in purchasing policies and relations with
suppliers and subcontractors, business ethics (actions undertaken to prevent bribery and corruption), territorial, economic and social impact (impact on
neighbouring or local populations).
Social information :
Indicators (quantitative information) : workforce size and breakdown by geography, age, gender, type of contract (long/short term), percentage of
female managers, absenteeism, hiring and terminations, turnover rate, total number of training hours and breakdown by type of training, by category,
by gender, and the ratio of hours of training per employee.
Qualitative information: employment (total headcount and breakdown, hiring and terminations, remunerations and their evolution), the organisation of
working time, absenteeism, social relationships (the organisation of social dialogue, collective bargaining agreements), health and safety conditions at
work, training policies, diversity and equality of treatment and opportunities (measures undertaken for gender equality, the employment and inclusion
of people with disabilities, anti-discrimination policies and actions).
(4) The entities Dassault Systèmes S.A. and Dassault Data Service (Vélizy, France site); the entity Dassault Systemes K.K. (Tokyo, Japan site).
(5) The coverage rate of our work is 36% of the workforce for the social data, 68% for the quantities of computers and servers recycled, 40% for electricity
consumption, and 44% for greenhouse gas emissions.
68 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
3
FINANCIAL REVIEW
AND PROSPECTS
CONTENTS
3.1 Operating and Financial Review
3.1.1 General
70
70
3.2 2015 Financial Objectives
and Multi-Year Growth Plan
3.1.2 Consolidated Information: 2014 Compared to 2013 76
3.1.3 Trends in Quarterly Results
3.1.4 Capital Resources
80
81
3.3 Interim and Other Financial
Information
81
82
DASSAULT SYSTÈMES ANNUAL REPORT 2014 69
3 Financial review and prospects
Operating and Financial Review
3.1 Operating and Financial Review
3.1.1 General
The executive overview in paragraph 3.1.1.1 “Executive
Overview for 2014” highlights selected aspects of the
Company’s financial results for 2014. The executive overview,
the supplemental non-IFRS financial information and the
more detailed discussion that follows should be read together
with the Company’s consolidated financial statements and
the related notes included in paragraph 4.1.1 “Consolidated
Financial Statements”.
In discussing and analyzing the Company’s results of
operations, the Company considers supplemental non-IFRS
financial information: (i) non-IFRS revenue data excludes the
effect of adjusting the carrying value of acquired companies’
deferred revenue; and non-IFRS expense data excludes,
(ii) the amortization of acquired intangibles, (iii) share-based
compensation expense and related social charges , (iv) certain
other operating income and expense, net, (v) certain one-
time items included in financial income and other, net, and
(vi) certain one-time tax effects and the income tax effects of
the above adjustments. A reconciliation of this supplemental
non-IFRS financial information with information set forth
in the Company’s consolidated financial statements and the
notes thereto is presented below under paragraph 3.1.1.2
“Supplemental non-IFRS Financial Information”.
When the Company believes it would be helpful for
understanding trends in its business, it restates percentage
increases or decreases in selected financial data to eliminate the
effect of changes in currency values, particularly the U.S. dollar
and the Japanese yen, relative to the euro. Specifically, the
Company’s constant currency revenue data calculations take
into account the estimated impact of changes in the currency
exchange rates compared to the euro. When trend information
is expressed below “in constant currencies”, the results of
the prior year have first been recalculated using the average
exchange rates of the most recent year, and then compared
with the results of the most recent year. All constant currency
information is provided on an approximate basis. Unless
otherwise indicated, the impact of exchange rate fluctuations
is approximately the same for both the Company’s IFRS and
supplemental non-IFRS financial data.
3.1.1.1
Executive Overview for 2014
(all revenue growth comparisons
are in constant currencies)
Summary Overview
Dassault Systèmes, the 3DEXPERIENCE company, provides
software applications and services, designed to support
companies’ innovation processes . The Company’s software
applications and services span design from ideation, to early
3D digital conceptual design drawings to full digital mock-
up; virtual testing of products; end-to-end global industrial
including manufacturing management and
operations
operations planning & optimization; and in marketing and
sales from digital marketing and advertising to end-consumer
shopping experience.
Since the introduction three years ago of its market vision of
3DEXPERIENCE and its Social Industry Experience strategy, the
Company has undergone a deep transformation in its go-to-
market strategy, in the packaging of its software applications,
and in its regional organization structure to better position
itself on the estimated $32 billion market opportunity it sees.
See also Section 1.4.2 “Principal Markets”.
2014 was a significant year of progress for Dassault Systèmes
in this regard, with the advancement of its purpose, offer,
growth drivers and organizational goals. More specifically, key
research and development releases, brand addressable market
expansions and organizational strengthening during 2014
included:
(cid:125) in February 2014, the Company made available a new
major release, introducing a platform, the 3DEXPERIENCE
platform, a new user interface and on premise and on the
Cloud offerings for companies of all sizes. The on premise
offering included 41 Industry Process Experiences and 183
processes while the Cloud offering was comprised of 14
Industry Process Experiences and 60 processes, representing
one-third of the total on premise portfolio at the time;
70 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
(cid:125) well aligned with its expanded purpose and addressable
market vision, 2014 was an active period of strategic
to
engagements with selected companies
investments totaling €952.9 million on a net cash basis to
acquire companies in several major areas of focus:
leading
(i) addressing the life science sector where the Company
introduced a new brand, BIOVIA, based upon the
acquisition of Accelrys. In addition to a leading presence
in life science, BIOVIA has a strong list of customers
in Aerospace, in Chemicals as well as High Tech and
Consumer Packaged Goods thanks to its work in
materials sciences,
(ii) addressing marketers with
the RTT acquisition,
rebranded as 3DEXCITE, offering professional high end
3D visualization, marketing solutions and computer
(as well as serving
generated
engineering and simulation users). Its customer base
includes a number of the world’s leading automotive
companies as well as global industry leaders in aerospace
and consumer goods, and
imagery services
(iii) addressing global business operations planning with the
acquisition of Quintiq, with offerings spanning production,
logistics and workforce planning applications.
In total, the Company is building a comprehensive product
innovation platform for businesses and people from
upstream experience thinking to sales and marketing;
(cid:125) the Company expanded its worldwide executive management
team and continued to align its business on its Social Industry
Experience strategy, resulting in further strengthening of
both its local/regional geographic and sales organizations as
well as global functions to address a much broader market
opportunity and importantly to bring greater value to its
customers leveraging global assets and local presence.
From a customer perspective, 2014 was a period of strong
growth with clients in its largest industry, Transportation
and Mobility with end-user software revenue increasing
double-digits in constant currencies. In addition, the Company
benefited from solid demand with companies in High Tech
and more broadly across new industries, leading to further
broadening of the Company’s reach by end-market verticals.
New industries have increased to 27% of total end-user
software revenue in 2014 from 25% in 2013.
Summary Financial Overview
In parallel, 2014 was a year of progressive improvement in
the Company’s financial results, benefiting from broad-based
strengthening of its performance from both a geographic and
industry perspective, leading to financial results well in line
with the Company’s objectives.
Financial review and prospects
Operating and Financial Review
3
In addition, the Company achieved the two strong operational
commitments (non-IFRS) it had established at the outset of
2014: (i) to deliver organic two-digit growth in new licenses
revenue on a constant currency basis for the full year, and (ii)
to deliver organic operating margin expansion of 150 basis
points excluding currency effects.
Total Revenue
IFRS total revenue increased 14%. N on-IFRS total revenue
increased 16%, with software revenue growth of 13%
and services and other revenue growth of 46%. Excluding
acquisitions and divestitures, non-IFRS total revenue and
software revenue increased 5% and 6%, respectively. (All
growth rates in constant currencies.)
3
Revenue By Region
On a regional basis and in constant currencies, non-IFRS
revenue in Europe increased 14%, led by Germany, the United
Kingdom and Southern Europe; revenue in the Americas
increased 20%, with an improved new business dynamic in
the direct sales channel, well supported by indirect sales; and
in Asia, revenue increased 15% led by Korea, China and Japan.
By region, Europe represented 46%, the Americas 29% and
Asia 25% of total revenue.
Revenue By Industry
From an industry perspective, the Company experienced
strong new business activity in multiple industries during
2014, most notably Transportation & Mobility, High Tech,
Life Sciences, Consumer Packaged Goods , Energy, Process &
Utilities, and Architecture, Engineering & Construction.
Software Revenue
Software revenue growth reflected a solid dynamic for
both new licenses and maintenance renewal trends. On a
non-IFRS basis and in constant currencies, total software
revenue increased 13%, with non-IFRS new licenses revenue
increasing 18% and non-IFRS recurring software revenue
increasing 11%. On an organic basis excluding acquisitions
and divestitures, new licenses revenue increased 10% led by
the Company’s direct sales and its CATIA and ENOVIA product
lines, and recurring software revenue increased 5% principally
reflecting growth in maintenance.
Recurring Software Revenue
The Company continued to benefit from a high level of recurring
software revenue, representing 71% of total software revenue
in 2014 and comprised principally of maintenance and rental
software revenue.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 71
3 Financial review and prospects
Operating and Financial Review
Operating Income
IFRS operating income of €430.8 million decreased 14%, while
non-IFRS operating income increased 7% to €699.2 million.
Excluding net negative currency effects, non-IFRS operating
income would have increased approximately 13%.
Operating Margin
More broadly, the Company was focused on driving global
operational efficiency leading to non-IFRS organic operating
margin. The non-IFRS operating margin was 29.8% compared
to 31.5% in 2013 and reflected the negative impact of
currencies of approximately 80 basis points as well as
dilution from acquisitions. On an organic basis before taking
into account acquisition and currency impact, the non-IFRS
operating margin increased an estimated 150 basis points in
2014, reflecting the focus on operational improvements.
Earnings per Share
IFRS diluted net income per share of €1.14 per share
compared to €1.38 (after the two-for-one stock split effected
on July 17, 2014) in 2013 principally reflecting higher
acquisition related costs. N on-IFRS diluted net income per
share increased 4% to €1.82 or an estimated 10% excluding
net negative currency impacts.
Acquisitions
2014 financial results reflect several acquisitions most
notably Accelrys in April 2014, RTT in January 2014, Quintiq
in September 2014 as well as the full year impact of Apriso
which was acquired in July 2013.
2015 Business Outlook
For a discussion of the Company’s 2015 business outlook,
see paragraph 3.2 “2015 Financial Objectives and Multi-Year
Growth Plan”. For further information regarding risks facing
the Company, see paragraph 1.6.1 “Risks Related to the
Company’s Business”.
Other Financial Highlights
At December 31, 2014, cash, cash equivalents and short-term
investments totaled €1.18 billion and long-term debt was
€350.0 million compared to €1.80 billion and €360.0 million,
respectively at December 31, 2013.
For the fiscal year 2014, the Company principal uses of
cash were for acquisitions of €952.9 million, net of cash
acquired; share repurchases of €171.7 million, cash dividends
of €35.8 million and capital expenditures of €45.4 million.
The Company received cash for stock options exercised of
€57.9 million.
3.1.1.2
Supplemental Non-IFRS Financial
Information
Readers are cautioned that the supplemental non-IFRS
financial information is subject to inherent limitations. It is
not based on any comprehensive set of accounting rules or
principles and should not be considered in isolation from or
as a substitute for IFRS measurements. The supplemental
non-IFRS financial information should be read only in
conjunction with the Company’s consolidated financial
statements prepared in accordance with IFRS. Furthermore,
the Company’s supplemental non-IFRS financial information
may not be comparable to similarly titled non-IFRS measures
used by other companies. Specific limitations for individual
non-IFRS measures are set forth below.
In evaluating and communicating its results of operations,
the Company supplements its financial results reported on an
IFRS basis with non-IFRS financial data. As further explained
below, the supplemental non-IFRS financial information
excludes the effects of: deferred revenue adjustments for
acquired companies, amortization of acquired intangibles,
share-based compensation expense and related social charges,
other operating income and expense, net, certain one- time
items included in financial revenue and other, net, and the
income tax effect of the non-IFRS adjustments and certain
one-time tax effects. Subject to the limitations set forth above
and below, the Company believes that the supplemental non-
IFRS financial information provides a consistent basis for
period-to-period comparisons which can improve investors’
understanding of its financial performance.
The Company’s management uses the supplemental non-
IFRS financial information, together with its IFRS financial
information, for financial planning and analysis, evaluation of
its operating performance, mergers and acquisition analysis
and valuation, operational decision-making and for setting
financial objectives for future periods. Compensation of its
senior management is based in part on the performance
of its business measured with the supplemental non-IFRS
information. The Company believes that the supplemental
non-IFRS data also provides meaningful information to
investors and financial analysts who use the information
for comparing the Company’s operating performance to its
historical trends and to other companies in its industry, as well
as for valuation purposes.
The supplemental non-IFRS financial information adjusts the
Company’s IFRS financial information to exclude:
(cid:125) deferred revenue adjustment of acquired companies: under
IFRS, deferred revenue of an acquired company must be
adjusted by writing it down to account for the fair value
of obligations assumed under contracts acquired through
the acquisition of the c ompany. As a result, in the case of
a typical one-year contract, the Company’s IFRS revenues
72 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial review and prospects
Operating and Financial Review
3
3
for the one-year period subsequent to an acquisition do not
reflect the full amount of revenue on assumed contracts
that would have otherwise been recorded by the acquired
entity in the absence of the acquisition.
In its supplemental non-IFRS financial information, the
Company has excluded this write-down to the carrying value
of the deferred revenue, and reflects instead the full amount
of such revenue. The Company believes that this non-IFRS
measure of revenue is useful to investors and management
because it reflects a level of revenue and operational results
which corresponds to the combined business activities of
Dassault Systèmes and the acquired company. In addition, the
non-IFRS financial information provides a consistent basis for
comparing its future operating performance, when no further
adjustments to deferred revenue are required, against recent
results.
However, by excluding the deferred revenue adjustment, the
supplemental non-IFRS financial information reflects the total
revenue that would have been recorded by the acquired entity
but may not reflect the total cost associated with generating
the non-IFRS revenue.
(cid:125) amortization of acquired intangibles, including amortization
of acquired technology: under IFRS, the cost of acquired
intangible assets, whether acquired through acquisitions
of companies or of technology or certain other intangible
assets, must be recognized according to the assets’ fair
value and amortized over their useful life.
In its supplemental non-IFRS financial information, the
Company has excluded the amortization expenses related
to acquired intangibles in order to provide a consistent basis
for comparing its historical results. For technology and other
intangible assets the Company develops internally, it typically
expenses costs in the period in which they are incurred. For
example, because it typically incurs most of its R&D costs prior
to reaching technical feasibility, its R&D costs are expensed
in the period in which they are incurred. By excluding the
amortization expenses related to acquired intangibles, the
supplemental non-IFRS financial
information provides a
uniform approach for evaluating the development cost of all
the Company’s technology, whether developed internally or
acquired externally. As a result, the Company believes that the
supplemental financial information offers investors a useful
basis for comparing its historical results.
However, the acquired intangible assets whose amortization
costs are excluded contributed to revenue earned during the
period, and it may not have been possible to earn such revenue
without such assets. In addition, the amortization of acquired
intangibles is a recurring expense until their total cost has
been amortized;
(cid:125) share-based compensation expense and related social
charges: under IFRS, the Company is required to recognize
in its income statement all share-based payments to
employees, including grants of employee stock options
and performance shares, based on their fair values over the
period that an employee provides service in exchange for
the award.
The Company excludes this expense in its supplemental
non-IFRS financial information as financial analysts and
investors use a valuation model which may not take into
account its share-based compensation expense. The exclusion
of share-based compensation expense in the Company’s
supplemental non-IFRS financial information therefore helps
them ensure the consistency of their valuation metrics. The
Company’s management considers the supplemental non-
IFRS information which excludes share-based compensation
expense when
the Company’s operating
performance, since share-based compensation expenses can
fluctuate due to factors other than the level of its business
activity or operating performance.
reviewing
However, share-based compensation
is one component
of employee compensation. By excluding share-based
compensation expense, the supplemental non-IFRS financial
information does not reflect the Company’s full cost of
attracting, motivating and retaining its personnel. Share-
based compensation expense is a recurring expense;
(cid:125) other operating income and expense, net: under IFRS, the
Company has recognized certain other operating income
and expense comprised of the impact of restructuring
activities, gains or losses on sale of subsidiaries, costs
directly related to acquisitions and costs related to site
closings and relocations.
In its supplemental non-IFRS financial information, the
Company excludes other operating income and expense
effects because of their unusual, infrequent or generally
non-recurring nature. As a result, the Company believes
that its supplemental non-IFRS financial information helps
investors better understand the current trends in its operating
performance.
However, other operating income and expense are components
of the Company’s income and expense and by excluding them
the supplemental non-IFRS financial information excludes
their impact to its net income;
(cid:125) certain one-time items included in financial revenue and
other, net: under IFRS, the Company has recognized certain
one-time items in financial revenue and other, net comprised
of gains and losses on disposals of non-consolidated equity
investments and the expense recognized following the
impairment of non-consolidated equity investments.
In its supplemental non-IFRS financial information, the
Company excludes certain one-time items included in financial
revenue and other, net because of their unusual, infrequent
or generally non-recurring nature. As a result, the Company
believes that its supplemental non-IFRS financial information
helps investors better understand the current trends in its
operating performance.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 73
3 Financial review and prospects
Operating and Financial Review
However, these one-time items included in financial revenue
and other, net are components of the Company’s income and
expense and by excluding them the supplemental non-IFRS
financial information excludes their impact to its net income;
(cid:125) certain one-time tax effects: the Company restructured
certain activities which resulted in immediate adjustment
of the income tax provision. The Company’s IFRS financial
statements reflect the impact of these one-time tax effects.
In its supplemental non-IFRS financial information, the
Company has excluded these one-time tax effects because
of their unusual nature in qualitative terms. The Company
does not expect such tax effects to occur as part of its
normal business on a regular basis. As a result, the Company
believes that by excluding these one-time tax impacts, its
supplemental non-IFRS financial information helps investors
understand the current trends in its operating performance.
The Company also believes that the exclusion of certain one-
time tax effects facilitates a comparison of its effective tax rate
between different periods.
However, these one-time tax effects are a component of the
Company’s income tax expense. By excluding these effects,
the supplemental non-IFRS financial information understates
or overstates the Company’s income tax expense. These one-
time tax effects are not a recurring expense.
The following table sets forth the Company’s supplemental non-IFRS financial information, together with the comparable IFRS
financial measure and a reconciliation of the IFRS and non-IFRS information.
74 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial review and prospects
Operating and Financial Review
3
Year ended December 31,
2014 IFRS Adjustment(1)
2014
non-IFRS
€2,294.3
€52.4 €2,346.7
2013 IFRS Adjustment(1)
€6.7
€2,066.1
2013
non-IFRS
€2,072.8
% Change
IFRS
non-
IFRS(2)
11% 13%
2,035.0
259.3
659.1
1,052.8
582.4
838.6
262.8
447.7
485.9
1,863.5
(43.3)
(133.4)
(39.3)
430.8
18.8%
15.0
445.8
(153.3)
2.1
(1.2)
€291.3
€1.14
43.6
2,078.6
1,880.8
6.7
1,887.5
8% 10%
8.8
268.1
185.3
–
185.3
40% 45%
18.3
22.7
11.4
677.4
1,075.5
593.8
–
–
–
43.6
838.6
262.8
447.7
529.5
567.2
937.8
561.1
818.9
249.4
409.5
403.0
2.4
2.4
1.9
–
–
–
6.7
569.6
940.2
563.0
818.9
249.4
409.5
409.7
16% 19%
12% 14%
4%
5%
2%
5%
9%
2%
5%
9%
21% 29%
(216.0)
1,647.5
1,563.1
(143.1)
1,420.0
19% 16%
3
–
–
–
699.2
29.8%
13.2
712.4
(35.5)
(100.9)
(6.7)
503.0
24.3%
18.0
521.0
(245.2)
(165.8)
43.3
133.4
39.3
268.4
(1.8)
266.6
(91.9)
(2.1)
(0.5)
–
(1.7)
4.2
(2.9)
€352.3
€1.38
€174.2
€465.5
€0.68
€1.82
35.5
100.9
6.7
149.8
(0.4)
149.4
(56.2)
(4.2)
–
€93.2
€0.37
–
–
–
652.8
(14%)
7%
31.5%
17.6
670.4
(14%)
(222.0)
(8%)
6%
10%
–
(2.9)
€445.5
(17%)
€1.75
(17%)
4%
4%
(in millions, except percentages
and per share data)
Total Revenue
Total revenue by activity
Software revenue
Services and other revenue
Total revenue by geography
Americas
Europe
Asia
Total software revenue by product line
CATIA software revenue
ENOVIA software revenue
SOLIDWORKS software revenue
Other software revenue
Total Operating Expenses
Share-based compensation expense
Amortization of acquired intangibles
Other operating income and expense, net
Operating Income
Operating Margin
Financial revenue and other, net
Income before Income Taxes
Income tax expense
(of which certain one-time tax restructuring
effects)
Non-controlling interest
Net Income attributable to shareholders
Diluted Net Income per Share(3)
(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 expense data reflect the exclusion of the amortization of acquired intangibles, share-based compensation expense and related social charges, as detailed below, and
other operating income and expense, net (iii) adjustments to IFRS financial revenue and other, net reflect the exclusion of certain one-time items included in financial revenue and
other, net, and (iv) 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 and certain one-time tax effects.
(in millions)
Cost of revenue
Research and development
Marketing and sales
General and administrative
Total share-based compensation expense(4)
Year ended December 31,
2014
IFRS Adjustment
2014
non-IFRS
2013
IFRS Adjustment
€343.2
409.7
748.5
189.4
€(1.1)
(16.9)
(13.9)
(11.4)
€(43.3)
€342.1
€261.4
392.8
734.6
178.0
375.5
665.2
153.4
€(0.9)
(14.8)
(12.0)
(7.8)
€(35.5)
2013
non-IFRS
€260.5
360.7
653.2
145.6
(2) The non-IFRS percentage change compares non-IFRS measures for the two different periods. In the event there is an adjustment to the relevant measure for only one of the periods
under comparison, the non-IFRS change compares the non-IFRS measure to the relevant IFRS measure.
(3) Based on a weighted average of 255.3 million diluted shares for 2014 and 255.2 million diluted shares for 2013, adjusted to reflect the two-for-one stock split effected on July 17, 2014.
(4) The increase in share-based compensation expense in 2014 principally reflected the fact that no performance shares were granted in 2013.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 75
3 Financial review and prospects
Operating and Financial Review
3.1.1.3
Critical Accounting Principles
The Company’s consolidated financial statements have been
prepared in accordance with IFRS. The preparation of these
financial statements requires the Company to make certain
assumptions and estimates. Actual results may differ from
these estimates under different assumptions or conditions. The
Company believes the following critical accounting policies,
among others, involve the more significant assumptions and
estimates used in the preparation of its consolidated financial
statements: revenue recognition, share-based payments,
purchase price allocation for business combinations, goodwill
and other intangible assets, income taxes and reasonable
estimates about the ultimate resolution of the Company’s
tax uncertainties. See Note 2 to the consolidated financial
statements for a description of these accounting policies.
3.1.2 Consolidated Information: 2014 Compared to 2013
Revenue
The Company’s total revenue is comprised of (i) software revenue, which is its primary source of revenue, representing 89% of
total revenue in 2014, and (ii) services and other revenue, which represented 11% of total revenue in 2014.
(in millions, except percentages)
Total Revenue
Total revenue by activity
Software revenue
Services and other revenue
Total revenue by geographic region*
Americas
Europe
Asia
Year ended
December 31,
2014
€2,294.3
2,035.0
259.3
659.1
1,052.8
582.4
% change in
constant
currencies
Year ended
December 31,
2013
14%
€2,066.1
11%
41%
17%
12%
14%
1,880.8
185.3
567.2
937.8
561.1
% change
11%
8%
40%
16%
12%
4%
*
The Company’s largest national markets as measured by total revenue are the United States, Germany, Japan, and France. See Note 3 to the consolidated financial statements.
IFRS total revenue increased 14% in constant currencies.
N on-IFRS total revenue increased 16%, on software revenue
growth of 13% and services and other revenue growth of 46%
in constant currencies. Excluding acquisitions and divestitures,
non-IFRS total revenue and software revenue increased 5%
and 6%, respectively in constant currencies.
Software Revenue
Software revenue is primarily comprised of new licenses
licenses, maintenance and other
revenue and periodic
software-related revenue. Periodic licenses and maintenance
revenue are referred to together as “recurring revenue”.
The Company’s products are principally licensed pursuant to
one of two payment structures: (i) new licenses, for which the
customer pays an initial or one-time fee for a perpetual license
or (ii) periodic (rental or subscription) licenses, for which
the customer pays periodic fees to keep the license active.
Access to maintenance and unspecified product updates
or upgrades requires payment of a fee, which is recorded
as maintenance revenue. Periodic (rental or subscription)
licenses entitle the customer to corrective maintenance and
product updates without additional charge. Product updates
include improvements to existing products but do not cover
new products. Other software-related revenue is comprised of
the Company’s product development revenue relating to the
development of additional functionalities of standard products
requested by customers.
76 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
IFRS new licenses revenue increased 15.9%, and 17%
in constant currencies well supported by organic growth
estimated at 10% in constant currencies.
(in millions)
Operating expenses
Adjustments*
(in millions, except percentages)
2014
2013
Year ended December 31,
Software revenue
New licenses revenue
Periodic licenses, maintenance
and other software-related
revenue
Total software revenue
(as % of total revenue)
€579.4
€500.1
1,455.6
€2,035.0
88.7%
1,380.7
€1,880.8
91.0%
IFRS software revenue increased 8.2% and excluding currency
effects, increased 11% . Similarly, non-IFRS software revenue
increased 10.1% and 13% excluding currency effects and totaled
€2.08 billion compared to €1.89 billion in 2013. Excluding
acquisitions and divestitures, and currency impacts, non-IFRS
software revenue increased 6%.
IFRS recurring software revenue increased 5.2% and 9% in
constant currencies. Maintenance renewal rates continued
to be high for existing product lines and acquisitions. Non-
IFRS recurring software revenue increased 7.7% and 11% in
constant currencies and totaled €1.49 billion in 2014 compared
to €1.38 billion in 2013. Excluding acquisitions and currency
impacts, non-IFRS recurring software revenue increased 5%
on growth in maintenance and mixed rental results. Non-IFRS
recurring software revenue represented 71% of total software
revenue in 2014 and 73% in 2013.
Other software-related revenue totaled €11.3 million in 2014
compared to €8.0 million in 2013.
Services and Other Revenue
Services and other revenue have historically been comprised of
revenue from consulting services in methodology for design,
deployment and support, training services and engineering
services. With the Company’s new brand, 3DEXCITE (renaming
of RTT following its acquisition), services and other revenue
also include content-related digital production for use in
3D visualization, advertising, sales and marketing.
(in millions, except percentages)
Services and other revenue
(as % of total revenue)
Year ended December 31,
2014
€259.3
11.3%
2013
€185.3
9.0%
Financial review and prospects
Operating and Financial Review
3
Services and other revenue increased 39.9% and approximately
41% in constant currencies, reflecting the higher service
and content revenue component of 2014 acquisitions, most
notably, 3DEXCITE and Quintiq. Excluding acquisitions,
services and other revenue decreased, as the Company focused
on working with system integrators, for deployment-related
services engagements.
Non-IFRS services and other revenue increased 44.7% and
approximately 46% in constant currencies. The non-IFRS
services gross margin improved to 15.8% from 11.9%,
benefiting from the higher service margin profile of various
acquisitions as well as ongoing operational improvements.
Operating expenses
3
Year ended December 31,
2014
€1,863.5
(216.0)
€1,647.5
2013
€1,563.1
(143.1)
€1,420.0
Non-IFRS operating expenses*
*
The adjustments and non-IFRS operating expenses in the table above reflect
adjustments to the Company’s financial information prepared in accordance with
IFRS by excluding (i) the amortization of acquired intangibles, (ii) share-based
compensation expense and related social charges, and (iii) other operating income
and expense, net. For the reconciliation of this non-IFRS financial information with
information set forth in the Company’s financial statements and the notes thereto,
see paragraph 3.1.1.2 “Supplemental Non-IFRS Financial Information”.
Operating expenses increased 19.2% (IFRS) and 16.0% (non-
IFRS). The increase in total operating expenses was driven by
growth in personnel principally through acquisitions. Total
headcount increased 24.9% during 2014 to 13,312 from
10,654 at the end of 2013.
Excluding acquisitions and acquisition-related costs, non-
IFRS operating expenses increased 1% in 2014 compared to
2013, with an estimated net favorable currency impact of
approximately two percentage points.
Cost of Software Revenue (excluding amortization
of acquired intangibles)
The cost of software revenue includes principally software
personnel costs, licensing fees paid for third-party components
integrated into the Company’s own products, preparation
costs for user manuals and delivery costs.
(in millions, except percentages)
2014
2013
Year ended December 31,
Cost of software revenue (excluding
amortization of acquired
intangibles)
(as % of total revenue)
€117.3
5.1%
€97.7
4.7%
DASSAULT SYSTÈMES ANNUAL REPORT 2014 77
3 Financial review and prospects
Operating and Financial Review
Cost of software revenue (excluding amortization of acquired
intangibles) increased €19.6 million or 20.1%. The increase
in cost of software revenue was due to growth in personnel
and growth in other expenses. The increase in personnel-
related costs reflected both internal growth and acquisitions.
The growth in other expenses was principally driven by
acquisitions.
Cost of Services and Other Revenue
The cost of services and other revenue includes principally
personnel and other costs related to organizing and providing
consulting, deployment services, content creation and
educational services less the technical support provided to
sales operations.
(in millions, except percentages)
2014
2013
Year ended December 31,
Cost of services and other
revenue
(as % of total revenue)
€225.9
9.8%
€163.7
7.9%
Cost of services and other revenue increased €62.2 million
or 38.0% due to growth in personnel and related costs from
acquisitions. The 2014 acquisitions, most notably 3DEXCITE
and Quintiq have a higher proportion of services revenue and
related cost of services as a percentage of total revenue.
Excluding the impact of acquisitions cost of services and
other revenue decreased as the Company continued to
focus on driving operational improvements in its core service
organization.
Research and Development Expenses
The Company believes that its ongoing significant investment
in R&D is one of the most important elements of its success.
The Company conducts its research primarily in France,
the United States and Germany, as well as in India, the
United Kingdom, Malaysia, Poland, Netherlands, Australia
and Canada.
Expenses for R&D include primarily personnel costs as well
as the rental, depreciation and maintenance expenses for
computers and computer hardware used in R&D, development
tools, computer networking and communication expenses.
Costs for R&D of software are expensed in the period in
which they were incurred. The Company generally does not
capitalize any R&D costs. A small percentage of R&D personnel
pursue R&D activities in the context of providing clients with
software maintenance, and their cost is thus included under
cost of software revenue.
Expenses for R&D are recorded net of grants recognized from
various governmental authorities to finance certain R&D
activities (mainly R&D tax credits in France).
(in millions, except percentages)
Research and development
expenses
(as % of total revenue)
Year ended December 31,
2014
2013
€409.7
17.9%
€375.5
18.2%
R&D expenses increased on a net basis by 9.1% or €34.2 million
reflecting growth in R&D personnel and in other R&D expenses
from acquisitions. Growth of R&D expenses was offset in part
by an increase in government grants and other governmental
programs supporting R&D which totaled €43.1 million in
2014, including a one-time R&D tax credit benefit, compared
to €27.4 million in 2013. Currency had a net positive impact
estimated at two percentage points on R&D expense growth.
Marketing and Sales Expenses
Marketing and sales expenses consist primarily of personnel
costs, which include sales commissions and personnel for
processing sales transactions; marketing and communications
expenses, including advertising; travel expenses; and marketing
infrastructure costs, such as information technology resources
used for marketing.
(in millions, except percentages)
Marketing and sales expenses
(as % of total revenue)
Year ended December 31,
2014
€748.5
32.6%
2013
€665.2
32.2%
Marketing and sales expenses increased €83.3 million or
12.5% and reflected growth in personnel headcount principally
from acquisitions and growth
in other expenses from
acquisitions. Currency had a net positive impact estimated at
one percentage point on marketing and sales expense growth.
General and Administrative Expenses
General and administrative expenses consist primarily of
personnel costs of the finance, human resources and other
departments, including legal; third-party professional fees
and other expenses; travel expenses; related infrastructure
costs, including information technology resources as well as
other expenses.
(in millions, except percentages)
General and administrative
expenses
(as % of total revenue)
Year ended December 31,
2014
2013
€189.4
8.3%
€153.4
7.4%
78 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
General and administrative expenses increased €36.0 million
or 23.5%, largely reflecting an increase in related costs from
acquisitions, while also reflecting a 2013 one-time benefit
from the resolution of tax proceedings. Currency had a net
positive impact estimated at one percentage point on general
and administrative expense growth.
Amortization of Acquired Intangibles
Amortization of acquired
includes mainly
amortization of acquired technology and acquired customer
relationships .
intangibles
(in millions)
Amortization of acquired
intangibles
Year ended December 31,
2014
2013
€133.4
€100.9
Amortization of acquired intangibles increased €32.5 million
or 32.2%, reflecting the 2014 acquisitions of RTT in January,
Accelrys in April and Quintiq in September as well as the
acquisition of Apriso in July 2013.
Other Operating Income and Expense, Net
Other operating income and expense, net, includes the impact
of events that are unusual, infrequent or generally non-recurring
in nature.
(in millions)
Other operating income and
expense, net
Year ended December 31,
2014
2013
€(39.3)
€(6.7)
income and
in 2014 and
(expense), net,
reflected
increased
Other operating
increases of
€(32.6) million
€(13.4) million in third-party professional fees in connection
with acquisitions, €(7.9) million in restructuring costs, and
€(3.5) million of relocation costs. In addition, the increase
in other operating income and (expense), net reflected a
€5.6 million gain on sales of subsidiaries in 2013. See Note 8
to the consolidated financial statements.
Operating income
(in millions)
Operating income
Year ended December 31,
2014
€430.8
2013
€503.0
Financial review and prospects
Operating and Financial Review
3
3
Operating income decreased 14.4%, or €72.2 million and
principally reflected an increase in amortization of intangibles
of €32.5 million, higher other operating income and (expenses),
net of €(32.6) million and an estimated net negative currency
impact of 5 percentage points or €48.5 million. Reflecting
these factors, the operating margin decreased to 18.8% from
24.3% in 2013.
On a non-IFRS basis, operating income totaled €699.2 million
for 2014, compared to €652.8 million for 2013. Currency had
a significant impact on operating income, with an estimated
six percentage points or €(32.1) million net negative currency
headwind.
The non-IFRS operating margin was 29.8% for 2014. In
comparison to 2013, where the non-IFRS operating margin
was 31.5%, approximately 80 basis points of the decrease
is attributable to a net negative currency impact, which was
more than offset by an estimated 150 basis points increase
on an organic basis excluding currency effects. The increase
in the non-IFRS organic operating margin excluding currency
effects helped mitigate the dilutive impact of acquisitions
estimated at 240 basis points.
Financial income (expense) and other, net
Financial income (expense) and other, net includes (i) interest
income and interest expense, net; (ii) foreign exchange
gains or losses, net, primarily composed of realized and
unrealized exchange gains and losses on receivables and
loans denominated in foreign currencies; and (iii) one-time
items, net principally composed of net gains or losses on sales
of investments.
(in millions)
Financial income and (expense)
and other, net
Year ended December 31,
2014
2013
€15.0
€18.0
2014 financial income (expense) and other, net was mainly
comprised of net financial interest income of €17.1 million
(2013: €18.2 million); exchange losses of €(4.1) million (2013:
€(0.5) million), and certain one-time items related to the
sales of non-consolidated equity investments of €1.8 million
(2013: €0.4 million). See Note 9 to the consolidated financial
statements.
On a non-IFRS basis, financial income (expense) and other, net
decreased to €13.2 million for 2014 compared to €17.6 million
in 2013, reflecting a net negative impact of €(3.6) million due
to net exchange loss of €(4.1) million for 2014, compared to a
net exchange loss of €(0.5) million for 2013.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 79
3 Financial review and prospects
Operating and Financial Review
Income tax expense
Net income and diluted net income per share
(in millions, except percentages)
Income tax expense
Effective consolidated tax rate
Year ended December 31,
2014
€153.3
34.4%
2013
€165.8
31.8%
IFRS income tax expense decreased €12.5 million in total
in 2014 compared to 2013, of which €23.9 million of the
change is due to lower pre-tax income in 2014, partially offset
by an €11.6 million impact due to an increase in the effective
tax rate to 34.4% for 2014 from 31.8% for 2013. The increase
in the effective tax rate is principally due to higher tax credits
in 2013. See Note 10 to the consolidated financial statements
for an explanation of the differences between the effective tax
rates and the taxes computed at the statutory French tax rate
of 38% for 2014 and 2013.
On a non-IFRS basis, income tax expense increased 10.5%
to €245.2 million for 2014, compared to €222.0 million for
2013, principally due to growth of non-IFRS pre-tax income
to €712.4 million compared to €670.4 million for 2013 and to
a lesser extent to an increase in the effective tax rate to 34.4%
compared to 33.1% for 2013.
3.1.3 Trends in Quarterly Results
Year ended December 31,
(in millions, except per share data)
2014
2013
Net income attributable to
shareholders
Diluted net income per share*
Diluted weighted average number
of shares outstanding*
€291.3
€1.14
€352.3
€1.38
255.3
255.2
*
2013 adjusted to reflect the two-for-one stock split effected on July 17, 2014.
IFRS diluted net income per share decreased 17.4% compared
to 2013. Currency had an estimated net negative impact of
6 percentage points or €0.08 per diluted share on IFRS diluted
net income per share growth.
Non-IFRS net income per diluted share increased 4.0% to
€1.82 per share, compared to €1.75 per share on a split-
adjusted basis for 2013. Currency had an estimated negative
impact of 6 percentage points or €0.10 per diluted share on
non-IFRS net income per share growth.
The Company’s quarterly new licenses revenue has varied
significantly and is likely to vary significantly in the future,
according to the Company’s business seasonality and clients’
decision process. Service and other revenue activity can also
vary by quarter. The Company’s total revenue is however less
sensitive to quarterly variation due to its significant level of
recurring software revenue, which includes maintenance
as well as software rentals and cloud subscriptions. The
significant level of recurring software revenue serves as a
stabilizing factor when new licensing activity is impacting
revenue and net income. Acquisitions and divestitures can also
cause the different elements of revenue to vary from quarter
to quarter.
A significant portion of sales typically occurs in the last month
of each quarter, and, as is typical in the software market, the
Company normally experiences its highest licensing activity
for the year in December. Software revenue, total revenue,
operating income, operating margin and net income have
generally been highest in the fourth quarter of each year.
In 2014, revenue for the fourth, third, second and first
quarters represented, respectively, 29.3% (27.4% in 2013),
24.5% (23.9% in 2013), 24.3% (25.2% in 2013) and 21.9%
(23.5% in 2013) of the Company’s total revenue for the year,
with the mix of revenues by quarter reflecting the timing of
acquisition activity during 2014.
Nonetheless, it is possible that the Company’s quarterly
total revenue could vary significantly and that its net income
could vary significantly, reflecting the change in revenues,
together with the effects of the Company’s investment plans.
See paragraph 1.6.1.15 “Variability in Quarterly Operating
Results”.
80 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial review and prospects
2015 Financial Objectives and Multi-Year Growth Plan
3
3.1.4 Capital Resources
Cash and cash equivalents and short-term
investments
amounted to €1.18 billion as of December 31, 2014 compared
to €1.80 billion as of December 31, 2013. The Company’s
net financial position was €825.5 million at December 31,
2014, compared to €1.44 billion at December 31, 2013,
and was comprised of cash, cash equivalents and short-term
investments, less long-term debt.
In 2014 the Company’s principal sources of liquidity were
cash from operations amounting to €499.5 million and
proceeds from exercise of stock options amounting to
€57.9 million. During 2014 cash obtained from operations
was used primarily to fund acquisitions in the amount of
€952.9 million net, repurchase Company shares in the amount
of €171.7 million and distribute cash dividends aggregating
to €35.8 million. In addition, the Company made additions
to property, equipment and intangibles of €45.4 million, and
repaid borrowings in the amount of €20.6 million. (See also
the Consolidated Statements of Cash Flows in paragraph 4.1.1
“Consolidated Financial Statements”.)
In 2013 the Company’s principal sources of liquidity were
cash from operations of €506.8 million, and proceeds from
the new long-term credit facility of €350.0 million, as well
as net proceeds from sales of short-term investments of
€91.4 million and proceeds from exercise of stock options
amounting to €40.2 million. During 2013 cash obtained from
operations was used primarily to fund acquisitions and other
related investments in the amount of €213.4 million net of
cash acquired, complete share repurchases in the amount
of €56.9 million, and distribute cash dividends aggregating
to €34.8 million. (See also the Consolidated Statements
of Cash Flows in paragraph 4.1.1 “Consolidated Financial
Statements”.)
Exchange rate fluctuations had a positive translation effect,
on cash and cash equivalent balances, of €38.0 million as of
December 31, 2014, compared to a negative translation effect
of €35.8 million as of December 31, 2013.
The Company follows a conservative policy for investing
its cash resources, mostly relying on short-term maturity
investments. Investment rules are defined by the Company’s
financial management and controlled by the treasury
department of Dassault Systèmes SA.
3
3.2 2015 Financial Objectives and Multi-Year
Growth Plan
The Company confirms its initial 2015 non-IFRS financial
objectives which were announced on February 5, 2015, when
the preliminary, unaudited annual results for 2014 were
released. These objectives are subject to the assumptions
and cautionary statements set forth below and are subject to
revision, as market and business conditions evolve during 2015.
The Company’s initial 2015 non-IFRS financial objectives are
as follows:
(cid:125) non-IFRS revenue growth objective range of about 11% to
12% in constant currencies (€2.70 billion to €2.72 billion
based upon the 2015 currency exchange rate assumptions
below);
(cid:125) non-IFRS operating margin of about 29.8%, stable compared
to 2014;
(cid:125) non-IFRS earnings per share range of about €2.04 to €2.09,
representing a growth objective range of about 12% to
15%, based upon the exchange rate assumptions below;
(cid:125) these financial objectives are based upon exchange rate
assumptions of U.S. dollar 1.20 per euro and Japanese
yen 140.00 per euro for 2015.
The Company’s objectives are prepared and communicated only
on a non-IFRS basis. The 2015 annual non-IFRS objectives set
forth above do not take into account the following accounting
elements and are based upon the 2015 currency exchange rate
assumptions above: deferred revenue write-downs currently
estimated at approximately €35 million for 2015; share-based
compensation expense currently estimated at approximately
€19 million for 2015 and amortization expense for acquired
intangibles currently estimated at approximately €160 million
for 2015. These 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
February 5, 2015.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 81
3 Financial review and prospects
Interim and Other Financial Information
On June 13, 2014 in conjunction with its 2014 Capital
Markets Day, Dassault Systèmes unveiled its next multi-year
growth plan with the initiation of a 2019 non-IFRS EPS goal
of about €3.50 (on a split-adjusted basis), commenting that
this goal represents about a 15% compound annual growth
rate and is top-line driven with multiple key revenue growth
drivers. The EPS goal assumes a relatively stable share count
over the five-year period, and is based upon exchange rates
for the U.S. dollar of $1.37 and Japanese yen of JPY140 in
comparison to the euro.
are
based
statements
forward-looking
The information above includes statements that express
objectives for the Company’s future financial performance.
on
Such
Dassault Systèmes management’s views and assumptions
as of the date of this Annual Report and involve known and
unknown risks and uncertainties. The Company’s actual
results or performance may be materially negatively affected
and differ materially from those in such statements due to a
range of factors as described in this Annual Report. For more
information regarding the risks facing the Company, see
paragraph 1.6 “Risk factors”.
3.3
Interim and Other Financial Information
Dassault Systèmes has not published any quarterly or half-year financial information since the date of its last audited financial
statements.
82 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
4
FINANCIAL STATEMENTS
4.1 Consolidated Financial Statements 84
4.3 Legal and Arbitration Proceedings 149
CONTENTS
4.1.1 Consolidated Financial Statements
4.1.2 Report of the Statutory Auditors
on the Consolidated Financial Statements
4.2 Parent Company Financial
Statements
4.2.1 Statement of income
4.2.2 Balance sheet
84
121
123
124
125
4.2.3 Notes to the Parent Company Financial Statements 126
4.2.4 Selected financial and other information for
Dassault Systèmes SA over the last five years
144
4.2.5 Report of the Statutory Auditors on the Parent
Company Financial Statements
4.2.6 Special report of the Statutory Auditors on
Regulated Agreements and Commitments
145
147
DASSAULT SYSTÈMES ANNUAL REPORT 2014 83
4 Financial statements
Consolidated Financial Statements
The consolidated and parent company financial statements below will be submitted for approval at the General Meeting of
Shareholders of Dassault Systèmes scheduled for May 28, 2015.
4.1 Consolidated Financial Statements
In compliance with Article 28 of the European Regulation no. 809/2004 of the European Commission, the consolidated financial
statements for 2012 and 2013 are incorporated by reference in this Annual Report as stated on page 2 hereof.
4.1.1 Consolidated Financial Statements
Consolidated Statements of Income
(in thousands, except per share data)
New licenses revenue
Periodic licenses, maintenance and other software revenue
Software revenue
Services and other revenue
TOTAL REVENUE
Cost of software revenue
Cost of services and other revenue
Research and development
Marketing and sales
General and administrative
Amortization of acquired intangibles
Other operating income and expense, net
OPERATING INCOME
Interest income and expense, net
Other financial income and expense, net
INCOME BEFORE INCOME TAXES
Income tax expense
NET INCOME
Attributable to:
Equity holders of the Company
Non-controlling interest
Earnings per share*
Basic net income per share
Diluted net income per share
Year ended December 31,
Notes
2014
2013
€579,360
€500,073
1,455,625
1,380,725
4
2,034,985
1,880,798
259,295
185,325
2,294,280
2,066,123
(117,332)
(225,919)
(409,660)
(748,428)
(189,440)
(133,376)
(39,309)
430,816
17,131
(2,195)
445,752
(153,302)
€292,450
(97,657)
(163,683)
(375,527)
(665,136)
(153,413)
(100,945)
(6,719)
503,043
18,248
(285)
521,006
(165,836)
€355,170
€291,241
€352,279
€1,209
€2,891
€1.16
€1.14
€1.41
€1.38
8
9
9
10
11
11
* 2013 figures have been restated to reflect the two-for-one stock split effected on July 17, 2014 (see Note 23 Shareholders’ Equity).
The accompanying notes are an integral part of these consolidated financial statements.
84 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
Consolidated Statements of Comprehensive Income
(in thousands)
NET INCOME
Gain on available for sale securities
Losses on cash flow hedges
Foreign currency translation adjustment
Income tax on items to be reclassified
Other comprehensive income to be reclassified to profit or loss in subsequent periods,
net of tax
Remeasurements of defined benefit pension plans
Income tax on items not being reclassified
Other comprehensive income not being reclassified to profit or loss in subsequent
periods, net of tax
OTHER COMPREHENSIVE INCOME, NET OF TAX
TOTAL COMPREHENSIVE INCOME, NET OF TAX
Attributable to:
Equity holders of the Company
Non-controlling interest
The accompanying notes are an integral part of these consolidated financial statements.
Year ended December 31,
Notes
2014
2013
€292,450
€355,170
23
23
22
−
(1,508)
187,036
575
186,103
(30,870)
9,712
(21,158)
164,945
169
(12,963)
(72,277)
4,343
(80,728)
7,066
(2,746)
4,320
(76,408)
€457,395
€278,762
€451,510
€278,137
€5,885
€625
4
DASSAULT SYSTÈMES ANNUAL REPORT 2014 85
4 Financial statements
Consolidated Financial Statements
Consolidated Balance Sheets
(in thousands)
Assets
Cash and cash equivalents
Short-term investments
Trade accounts receivable, net
Income tax receivable
Other current assets
TOTAL CURRENT ASSETS
Property and equipment, net
Non-current financial assets
Deferred tax assets
Intangible assets, net
Goodwill
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
(in thousands)
Liabilities and equity
Trade accounts payable
Accrued compensation and other personnel costs
Unearned revenue
Income tax payable
Other current liabilities
TOTAL CURRENT LIABILITIES
Deferred tax liabilities
Borrowings, non-current
Other non-current liabilities
TOTAL NON-CURRENT LIABILITIES
Common stock
Share premium
Treasury stock
Retained earnings and other reserves
Other items
Parent shareholders’ equity
Non-controlling interest
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
The accompanying notes are an integral part of these consolidated financial statements.
86 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Year ended December 31,
Notes
2014
2013
12
12
13
13
14
15
10
17
18
19
10
20
19
€1,104,206
€1,737,860
71,286
627,662
78,626
97,782
65,785
472,624
54,866
88,896
1,979,562
2,420,031
136,737
100,448
69,526
79,575
1,170,626
1,532,031
48,203
87,471
658,788
872,952
2,988,495
1,767,862
€4,968,057
€4,187,893
€130,327
246,623
636,750
16,870
108,618
1,139,188
218,628
350,000
300,737
869,365
128,182
484,208
€84,972
211,052
488,961
20,845
82,364
888,194
102,714
360,019
212,815
675,548
126,933
425,972
(187,085)
(105,732)
2,489,667
2,316,293
28,488
(152,939)
2,943,460
2,610,527
16,044
13,624
23
2,959,504
2,624,151
€4,968,057
€4,187,893
Consolidated Statements of Cash Flows
(in thousands)
Net income
Adjustments for non-cash items
Changes in operating assets and liabilities
Net cash provided by operating activities
Additions to property, equipment and intangibles
Purchases of short-term investments
Proceeds from sales and maturities of short-term investments
Payment for acquisition of businesses, net of cash acquired
Other
Net cash used in investing activities
Proceeds from exercise of stock options
Cash dividends paid
Repurchase of treasury stock
Borrowings
Repayment of borrowings
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
CASH AND CASH EQUIVALENTS AT END OF PERIOD
Supplemental disclosure
Income taxes paid
Cash paid for interest
The accompanying notes are an integral part of these consolidated financial statements.
Financial statements
Consolidated Financial Statements
4
Year ended December 31,
Notes
2014
2013
€292,450
€355,170
24
24
14, 17
187,748
19,255
499,453
(45,393)
(95,141)
94,783
168,478
(16,801)
506,847
(42,390)
(174,203)
265,596
16
(952,913)
(213,418)
(2,197)
(4,221)
(1,000,861)
(168,636)
23
23
20
20
57,893
(35,764)
(171,660)
-
(20,685)
(170,216)
37,970
(633,654)
40,194
(34,794)
(56,928)
350,000
(22,237)
276,235
(35,886)
578,560
1,737,860
1,159,300
€1,104,206
€1,737,860
€189,434
€143,172
€5,205
€5,148
4
DASSAULT SYSTÈMES ANNUAL REPORT 2014 87
4 Financial statements
Consolidated Financial Statements
Consolidated Statements of Shareholders’ Equity
Common
stock
Share
premium
Treasury
stock
Retained
earnings and
other
reserves
Available-
for-sale
securities
Cash flow
hedges
Foreign
currency
translation
adjustment
Parent
shareholders’
equity
Non-
controlling
interest Total Equity
Other items
€125,097 €314,402
€(57,399) €2,029,318
€(169)
€5,752
€(80,060) €2,336,941 €16,229 €2,353,170
352,279
−
−
−
352,279
2,891
355,170
4,320
169
(8,705)
(69,926)
(74,142)
(2,266)
(76,408)
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
Dividends
741
67,232
356,599
(99,537)
−
1,095
44,338
−
−
−
−
−
−
(48,333)
(8,595)
−
−
34,017
4,491
169
(8,705)
(69,926)
278,137
625
278,762
−
−
−
−
−
−
−
−
−
−
−
−
−
−
−
(31,564)
(3,230)
(34,794)
45,433
(56,928)
34,017
4,491
−
−
−
−
45,433
(56,928)
34,017
4,491
€126,933 €425,972 €(105,732) €2,316,293
€– €(2,953) €(149,986) €2,610,527 €13,624 €2,624,151
291,241
−
−
−
291,241
1,209
292,450
(21,158)
−
(3,475)
184,902
160,269
4,676
164,945
Dividends
802
70,330
1,188
49,457
270,083
(103,431)
−
(741)
(61,551)
(81,353)
(28,015)
−
−
−
−
−
−
29,950
4,787
−
−
−
−
−
−
(3,475)
184,902
451,510
5,885
457,395
−
−
−
−
−
−
−
−
−
−
(32,299)
(3,465)
(35,764)
50,645
(171,660)
29,950
4,787
−
−
−
−
50,645
(171,660)
29,950
4,787
€128,182 €484,208 €(187,085) €2,489,667
€− €(6,428)
€34,916 €2,943,460 €16,044 €2,959,504
(in thousands)
JANUARY 1,
2013
Net income
Other
comprehensive
income, net of tax
COMPREHENSIVE
INCOME, NET OF
TAX
Exercise of stock
options
Treasury stock
transactions
Share-based
payments
Other changes
DECEMBER 31,
2013
Net income
Other
comprehensive
income, net of tax
COMPREHENSIVE
INCOME, NET OF
TAX
Exercise of stock
options
Treasury stock
transactions
Share-based
payments
Other changes
DECEMBER 31,
2014
The accompanying notes are an integral part of these consolidated financial statements.
88 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
Notes to the Consolidated Financial Statements for Years Ended
December 31, 2014 and 2013
CONTENTS
Note 1 Description of Business
90
Note 13 Trade Accounts Receivable, Net
Note 2
Summary of Significant Accounting
Policies
and Other Current Assets
90
Note 14 Property and Equipment
Note 3
Segment and Geographic Information 94
Note 15 Non-Current Financial Assets
Note 4
Software Revenue
Note 5 Government Grants
Note 6
Personnel Costs
Note 7
Share-based Payments
Note 8 Other Operating Income
and Expense, Net
Note 9
Interest Income and Expense, Net
and Other Financial Income and
Expense, Net
Note 10
Income Taxes
Note 11 Earnings per Share
Note 12 Cash and Cash Equivalents and
Short-term Investments
96
97
97
97
100
100
101
102
103
104
105
106
106
108
109
111
112
4
Note 16 Business Combinations
Note 17
Intangible Assets
Note 18 Goodwill
Note 19 Other Liabilities
Note 20 Borrowings
Note 21 Derivatives and Currency
and Interest Rate Risk Management 112
Note 22 Post-employment Benefits
Note 23 Shareholders’ Equity
Note 24 Consolidated Statements
of Cash Flows
Note 25 Commitments and Contingencies
Note 26 Related-Party Transactions
Note 27 Principal Dassault Systèmes
Companies
114
116
118
118
119
120
DASSAULT SYSTÈMES ANNUAL REPORT 2014 89
4 Financial statements
Consolidated Financial Statements
Note 1 Description of Business
The “Company” or the “Group” refers to Dassault Systèmes SA
and its subsidiaries. The Company provides end-to-end software
applications and services, designed to support companies’
innovation processes, from specification and design of a new
product, to its manufacturing, supply and sale to the customer,
through all stages of digital mock-up, simulation, and realistic
3D virtual experiences representing user experience.
The Company’s global customer base includes companies in
12 industrial sectors: Aerospace & Defense; Transportation &
Mobility; Marine & Offshore; Industrial Equipment; High-Tech;
Architecture, Engineering & Construction; Consumer Goods &
Retail; Consumer Packaged Goods & Retail; Life Sciences;
Energy, Process & Utilities; Financial & Business Services and
Natural Resources. To serve its customers, the Company has
developed a broad software applications portfolio, comprised
of social and collaborative applications, 3D modeling
information
simulation applications, and
applications,
intelligence applications, all powered by its 3DEXPERIENCE
Platform.
Dassault Systèmes SA is a société anonyme, a form of
limited liability company, incorporated under the laws of
France. The Company’s registered office is located at 10, rue
Marcel-Dassault, in Vélizy-Villacoublay, France. The Dassault
Systèmes SA shares are listed in France on Euronext Paris. These
consolidated financial statements were established under the
responsibility of the Board of Directors on March 20, 2015.
Note 2 Summary of Significant Accounting Policies
Basis of preparation and consolidation
The accompanying consolidated financial statements were
prepared in accordance with International Financial Reporting
Standards (“IFRS”) as adopted in the European Union. The
consolidated financial statements are presented in thousands
of euros except where otherwise indicated.
The consolidated financial statements include the accounts
of Dassault Systèmes SA and its subsidiaries. Companies
over which the Company has control are fully consolidated.
The Group controls an entity when it is exposed, or has
rights, to variable returns from its involvement with the
entity and has the ability to affect those returns through its
power over the entity. Companies over which the Company
exercises significant influence are accounted for under the
equity method. Intercompany transactions and balances are
eliminated.
Impact of recently issued accounting standards
The following standards which became mandatory from
January 1, 2014 and were published in the Official Journal of
the European Union at December 31, 2014 were applied for
the first time in 2014:
(cid:125) IFRS 10 “Consolidated financial statements”, IFRS 11 “Joint
arrangements”, and IFRS 12 “Disclosures of interests in
other entities”, mandatory for financial years beginning on
or after January 1, 2014. The adoption of these standards
had no material impact on the Company’s consolidated
financial statements.
The Company undertakes no early application of any standard
or interpretation or associated amendments, including the
following which was already published in the Official Journal
of the European Union at December 31, 2014:
(cid:125) IFRIC 21 “Levies”, mandatory for financial years beginning
on or after June 17, 2014. The interpretation addresses
when an entity should recognize a liability to pay a
government levy. The adoption of IFRIC 21 is not expected
to have a material impact on the Company’s consolidated
financial statements.
In addition, the Company’s consolidated financial statements
do not take into account new standards, interpretations
and amendments not yet approved by the European Union
at December 31, 2014, notably IFRS 15 “Revenue from
contracts with customers”, expected to be effective as of
January 1, 2017, with early adoption permitted. The Company
is currently assessing the impact of IFRS 15 on its consolidated
financial statements and plans to adopt the new standard on
the required effective date.
Summary of significant accounting policies
Use of estimates
The preparation of financial statements in conformity with
IFRS requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities,
revenue and expenses and disclosure of contingent assets
and liabilities at the date of the financial statements. Areas
90 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
lifecycles;
include: assessing product
involving the use of significant estimates and assumptions
mainly
identifying
the different elements comprising a software arrangement,
including the distinction between upgrades/enhancements
and new products; determining when technological feasibility
is achieved for its products; estimating the recoverable amount
of goodwill; determining the nature, fair value and useful
life of acquired intangible assets in a business combination;
determining assumptions to estimate the fair value of share-
based payments; assessing the recognition of deferred tax
assets; and making reasonable estimates about the ultimate
resolution of the Company’s tax uncertainties based on
current tax laws and the Company’s interpretation thereof.
Actual results and outcomes could differ from management’s
estimates and assumptions.
Foreign currency adjustments
The functional currency of the Company’s foreign subsidiaries
is generally the applicable local currency. Assets and liabilities
with functional currencies other than the euro are translated
into euro equivalents at the rate of exchange in effect on the
balance sheet date. Revenues, expenses and cash flows are
translated at the average exchange rates for the year unless this
average is not a reasonable approximation of the cumulative
effect of the rates prevailing on the transaction dates, in which
case revenues, expenses and cash flows are translated at the
rate on the dates of the transactions. Translation gains or
losses are recorded in Other items in shareholders’ equity.
Exchange differences on the settlement or retranslation
of monetary items in a currency other than the Company’s
and its subsidiaries’ functional currency are recorded in the
statement of income.
Revenue recognition
The Company derives revenue from two primary sources: (1) new
software licenses, periodic licenses, maintenance and other
software revenue, which includes software license updates,
technical support and the development of additional functionalities
of standard products requested by clients; (2) consulting and
training services and other revenue.
Revenues are disclosed net of taxes collected from customers
and remitted to governmental authorities.
New Software Licenses, Periodic Licenses, Maintenance
and Other Software Revenue
Software
license revenue represents fees earned from
granting customers licenses to use the Company’s software.
The Company’s software license revenue consists of perpetual
and periodic license sales of software products. Software
Financial statements
Consolidated Financial Statements
4
4
license revenue is recognized (to the extent the Company
has no remaining obligations to perform) when: evidence of
an arrangement exists, delivery and acceptance has occurred,
the amount of revenue and associated costs can be measured
reliably, and it is probable that the economic benefits
associated with the transaction will flow to the Company.
In instances when any of the four criteria are not met, the
Company defers recognition of software license revenue until
all criteria are met. Revenue related to the licensing of software
through value-added resellers (VARs) is generally recognized
when evidence of a sale to an end-user customer is provided to
the Company, assuming all other revenue recognition criteria
have been met.
Periodic licenses generally have a one-year term and the
corresponding fee is recognized ratably over the term of the
license.
Maintenance revenue represents periodic fees associated
with the sale of unspecified product updates on a when-
and-if-available basis and technical support. Maintenance
agreements are entered into in connection with the initial
software license purchase. Maintenance support may be
renewed by the customer at the conclusion of each term.
Revenue from maintenance is recognized on a straight-line
basis over the term of the maintenance agreement.
Other software revenue mainly relates to the development
of additional functionalities of standard products requested
by clients and is recognized as the development work is
performed.
Recurring fees for periodic licenses, maintenance and other
software revenue are reported within software revenue.
Revenue under multiple-element arrangements, which
typically include new software licenses and maintenance
agreements sold together, is allocated to each element in
the arrangement primarily using the residual method based
upon the fair value of the undelivered elements. Discounts, if
any, are applied to the delivered elements, usually software
licenses, under the residual method. For maintenance, fair
value is generally determined based upon the expected
renewal rate.
Services and Other Revenue
Services and other revenue consists primarily of fees from
consulting services in methodology for design, deployment
and support, and training services. Services generally do not
require significant modification or customization of software
products and are accounted for separately to the extent they
are not essential to the functionality of software products.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 91
4 Financial statements
Consolidated Financial Statements
Service revenues derived from time and material contracts are
recognized as time is incurred.
Service revenues derived from fixed price contracts are
generally recognized using a percentage of completion basis.
For customer support contracts, when no performance pattern
is discernible, revenue is recognized ratably over the term of
the contract, generally one year, on a straight-line basis.
Share-based payment
The Company recognizes compensation expense for share-
based payment awards expected to vest on a straight-line
basis over the requisite service period of the entire award.
Forfeitures are estimated at the time of grant and revised, if
necessary, in subsequent periods if actual forfeitures differ
from initial estimates.
Stock options are measured at fair value on the date of the
grant using an option-pricing model based on assumptions
made by management on expected volatility, expected option
life and distributed dividends.
Performance shares are measured at fair value based on the
quoted price of the Company’s common stock on the date of
grant. The fair value may also include the impact of a market
condition based on an option-pricing model.
Cost of software revenue
Cost of software revenue primarily includes software license
expense for software products included in the Company’s
software, maintenance costs and delivery expense.
Research and development
Research costs are expensed as incurred.
Costs incurred to develop computer software products include
mainly payroll and other headcount-related costs associated
with development of the Company’s products. They also
include amortization expense, lease and maintenance costs
of computer equipment used for product development,
software expenditures and costs of information technology
and communication.
Due to specificities in the software industry, the Company
has determined that technological feasibility is the key criteria
to capitalize development expenditure as it is generally the
last criteria to be met. Currently the risks and uncertainties
inherent in the software development process make it difficult
to demonstrate technological feasibility before a working
prototype has been completed, which generally occurs shortly
before the commercial release of its software products. As a
consequence, costs incurred after technological feasibility
is established that could potentially be capitalized are not
material.
Government grants
The Company receives grants from various governmental
authorities to finance certain research and development
activities, including research and development tax credits in
France that are treated as government grants because they are
realizable in cash in the event the Company has insufficient
income tax payable. Government grants are recognized as
a reduction of research and development costs or cost of
services and other revenue when the qualifying research and
development activities have been performed and there is
reasonable assurance that the grants will be received.
Other operating income and expense, net
The Company distinguishes income and expense that is
unusual, infrequent or generally non-recurring in nature in the
consolidated statement of income. Such income and expense
includes the impact of restructuring activity and other
generally non-recurring events, such as gain or loss on sale
of subsidiaries, costs directly related to acquisitions, and costs
related to site closings or moving from one site to another.
Other financial income and expense, net
Other financial income and expense primarily includes the
impact of remeasuring financial instruments at fair value, gains
and losses on disposals and the impairment of investments in
non-consolidated companies, exchange gains and losses on
monetary items and change in fair value of derivative financial
instruments not qualified for hedge accounting.
Income taxes
Deferred income tax is recognized using the liability method on
temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated
financial statements. However, deferred income tax is not
accounted for if it arises from initial recognition of an asset
or liability in a transaction other than a business combination
that, at the time of the transaction, affects neither accounting
nor taxable profit or loss. Deferred income tax is determined
using tax rates and laws that have been enacted or substantially
enacted by the balance sheet date and are expected to apply
when the related deferred income tax asset is realized or the
deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent
that it is probable that future taxable profit will be available
against which the temporary differences can be utilized.
Deferred income tax is provided on temporary differences
arising on investments in subsidiaries and associates, except
where the timing of the reversal of the temporary difference
is controlled by the Company and it is probable that the
temporary difference will not reverse in the foreseeable future.
92 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
Allowance for doubtful accounts and loans receivable
The allowance for doubtful accounts and loans receivable
reflects the Company’s best estimate of probable losses
inherent in the receivable balance. The Company determines
the allowance based on known troubled accounts, historical
experience and other currently available evidence.
Financial instruments
Fair Value – The carrying amounts of cash and cash
equivalents, short-term investments, accounts receivable,
accounts payable and accrued expenses approximate fair
value, due to the short-term maturities of such instruments.
Foreign exchange options and forward contracts, which are
designated and serve as hedges, are recorded at their fair
market value. Fair value is measured based on the following
fair value hierarchy: level 1: quoted price in active markets;
level 2: inputs observable directly or indirectly, other than
quoted price included in level 1; level 3: inputs not based
on observable market data. Cash, cash equivalents and
short-term investments are measured using the level 1 fair
value. Derivative instruments are measured using the level 2
fair value. Other investments that are not equity method
investments are measured using the level 3 fair value.
Cash and Cash Equivalents and Short-Term Investments –
The Company considers deposits with banks, investments in
money market mutual funds and marketable debt securities
with short-term maturities to be cash equivalents since they are
readily convertible to a known amount of cash and are subject
to an insignificant risk of change in value. Other marketable
debt securities and mutual funds that do not qualify as cash
equivalents are considered to be short-term investments and
are generally classified as trading securities with changes in
fair value recorded in interest income and expense, net.
Non-Current Financial Assets – Non-current financial assets
include, principally, available-for-sale equity securities at fair
value, loans, deposits and other non-current receivables at
amortized cost and equity method investments. For available-
for-sale equity securities, any unrealized holding gains and
losses excluded from operating results and are recognized
in the consolidated statements of comprehensive income
until realized. The Company assesses declines in the value of
individual investments to determine whether such decline is
other-than-temporary and thus the investment is impaired.
This assessment is made by considering available evidence
including changes in general market conditions, specific
industry and individual company data, the length of time
and the extent to which the market value has been less than
cost, the financial condition and near-term prospects of the
individual company, and the Company’s intent and ability to
hold the investment.
Derivative Instruments – The Company uses derivative
instruments to manage exposures to foreign currency and
interest rates. Derivative instruments are measured at their
fair value and changes in the fair value affect the consolidated
statements of income unless specific hedge accounting criteria
are met. Changes in the fair value of derivatives designated as
cash-flow hedges are reported as a component of shareholders’
equity until the hedged item is recognized in earnings.
Property and equipment
Property and equipment are recorded at cost and depreciated
using the straight-line method over their estimated useful
lives: computer equipment, two to five years; office furniture
and equipment, five to 10 years; buildings, 30 years;
leasehold improvements are depreciated over the shorter of
the life of the assets or the remaining lease term. Repair and
maintenance costs are expensed as incurred.
Intangible assets
Intangible assets primarily
include acquired technology,
contractual customer relationships and computer software .
Costs related to intangible assets are capitalized and amortized
using the straight-line method over their estimated useful
lives, which range from two to 16 years. No intangible assets
have been identified with an indefinite useful life.
Business combinations and goodwill
Business combinations are accounted for using the purchase
method. The cost of an acquisition is measured as the fair
value of the assets transferred, equity instruments issued
and liabilities incurred or assumed on the acquisition date.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured
initially at fair value at the date of acquisition, irrespective of
the extent of any non-controlling interest.
Goodwill is initially measured at cost being the excess of the
cost of the business combination over the Company’s share in
the net fair value of the acquiree’s identifiable assets, liabilities
and contingent liabilities.
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. For the purpose of impairment
testing, goodwill acquired in a business combination is, from
the acquisition date, allocated to each of the Company’s cash
generating units or group of cash generating units that are
expected to benefit from the synergies of the combination,
irrespective of whether other assets or liabilities of the acquiree
are assigned to those units.
4
DASSAULT SYSTÈMES ANNUAL REPORT 2014 93
4 Financial statements
Consolidated Financial Statements
Goodwill is tested whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable, and
at a minimum annually. For the purpose of the impairment
test, the Company relies upon projections of future cash flows
and takes into account assumptions regarding the evolution
of the market and its ability to successfully develop and
commercialize its products. Changes in market conditions
could have a major impact on the valuation of assets and
liabilities and could result in additional impairment losses.
Provisions
Provisions are recognized as liabilities to cover probable
outflows of resources that can be estimated and that result
from present obligations (legal, contractual or constructive)
relating to past events. In cases where a potential obligation
resulting from past events exists, but where occurrence of
the outflow of resources is not probable or where the amount
cannot be reliably estimated, a contingent liability is disclosed
among the Company’s commitments.
The amount of the provision provided is the best estimate of
the outflow of resources required to extinguish this present
obligation.
Treasury shares
Own equity instruments which are reacquired (treasury
shares) are recognized at cost and deducted from equity. Gains
and losses on the purchase, sale, issue or cancellation of the
Company’s own equity instruments are credited or charged to
shareholders’ equity and are not recognized in the statement
of income.
Borrowings
Borrowings are recognized initially at fair value, net of
transaction costs
incurred. Any difference between the
recorded amount and the redemption value is amortized into
income over the period of the borrowing using the effective
interest rate method.
Post-employment benefits
The Company’s payments for defined contribution plans are
recorded as expenses for the relevant period.
For defined benefit plans concerning post-employment
benefits, the Company uses the Projected Unit Credit Method
to determine the present value of its obligations. Under this
method, benefits are attributed to periods of service according
to the plan’s benefit formula. However, if an employee’s
service in later years will earn a materially higher level of
benefit than in earlier years, benefits are attributed to periods
of service on a straight-line basis.
Actuarial gains and losses are charged or credited to equity in
other comprehensive income in the period in which they arise.
The future payments for employee benefits are measured on
the basis of future salary increases, retirement age, mortality
and length of employment with the Company, and are
discounted at a rate determined by reference to yields on long-
term high quality corporate bonds of a duration corresponding
to the estimated duration of the benefit plan concerned.
The net expense for the year, corresponding to the sum of
the current service costs, past service costs and net interest
expense or income, is charged in full to operating income.
Note 3 Segment and Geographic Information
Operating segments are components of the Company for
which discrete financial information is available and whose
operating results are regularly reviewed by management to
assess performance and allocate resources. The Company
operates in a single operating segment, the sale of software
solutions, whose aim is to offer customers an integrated
innovation process, from the development of a new concept
to the realistic experience of the resultant product, through
all stages of detailed design, scientific simulation and
manufacturing, thanks to the 3DEXPERIENCE platform.
The assessment of the operating segment’s performance
is based on the Group’s supplemental non-IFRS financial
information (see paragraph 3.1.1.2 “Supplemental Non-
IFRS Financial Information”). The accounting policies used
differ from those described in Note 2 Summary of Significant
Accounting Policies as follows:
(cid:125) the measure of operating segment revenue and income
includes the whole revenue that would have been recognized
by acquired companies had they remained stand-alone
entities but which is partially excluded from Group revenue
to reflect the fair value of obligations assumed;
(cid:125) the measure of operating segment income excludes share-
based compensation expense and associated payroll taxes
(see Note 6 Personnel Costs and Note 7 Share-based
Payments), amortization of acquired intangibles, and other
operating income and expense, net (see Note 8 Other
Operating Income and Expense, Net).
94 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
(in thousands)
TOTAL REVENUE FOR OPERATING SEGMENT
Adjustment for unearned revenue of acquired companies
TOTAL REVENUE
(in thousands)
INCOME FOR OPERATING SEGMENT
Adjustment for unearned revenue of acquired companies
Share-based compensation expense and related payroll taxes
Amortization of acquired intangibles
Other operating income and expense, net
OPERATING INCOME
Financial statements
Consolidated Financial Statements
4
Year ended December 31,
2014
2013
€2,346,660
€2,072,781
(52,380)
(6,658)
€2,294,280
€2,066,123
Year ended December 31,
2014
2013
€699,174
€652,762
(52,380)
(43,293)
(6,658)
(35,397)
(133,376)
(100,945)
(39,309)
(6,719)
€430,816
€503,043
4
Data by geographic operations of the Company is established according to geographical location of the consolidated companies
and is as follows:
(in thousands)
2014
Europe
of which France
of which Germany
Americas
of which the United States
Asia
of which Japan
TOTAL
2013
Europe
of which France
of which Germany
Americas
of which the United States
Asia
of which Japan
TOTAL
Total revenue
Total assets
Additions to
property,
equipment and
intangibles
€864,599
€2,558,112
€17,371
439,108
211,131
903,602
850,581
526,079
373,838
1,524,100
447,885
1,986,717
1,769,637
423,228
175,173
14,405
1,030
23,151
22,525
8,371
2,727
€2,294,280
€4,968,057
€48,893
€796,239
€2,616,507
460,129
159,217
789,294
737,993
480,590
353,802
2,151,410
230,987
1,263,015
968,596
308,371
169,536
€16,388
14,824
580
15,403
9,100
10,599
6,754
€2,066,123
€4,187,893
€42,390
DASSAULT SYSTÈMES ANNUAL REPORT 2014 95
4 Financial statements
Consolidated Financial Statements
The Company also receives data that identifies the location of the Company’s end-user customers. Using such information,
revenue by geographic area would be as follows:
(in thousands)
Europe
of which France
of which Germany
Americas
of which the United States
Asia
of which Japan
TOTAL REVENUE
Note 4 Software Revenue
Software revenue is comprised of the following:
(in thousands)
New licenses revenue
Periodic licenses and maintenance revenue
Other software revenue
SOFTWARE REVENUE
Breakdown of software revenue by main product line is as follows:
(in thousands)
CATIA software revenue
SOLIDWORKS software revenue
ENOVIA software revenue
Other
SOFTWARE REVENUE
Year ended December 31,
2014
2013
€1,052,804
€937,844
229,522
340,223
659,022
574,994
582,454
293,065
241,611
290,649
567,196
480,356
561,083
310,751
€2,294,280
€2,066,123
Year ended December 31,
2014
2013
€579,360
€500,073
1,444,327
1,372,702
11,298
8,023
€2,034,985
€1,880,798
Year ended December 31,
2014
2013
€838,527
€818,850
447,683
262,849
485,926
409,545
249,372
403,031
€2,034,985
€1,880,798
96 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
Note 5 Government Grants
Government grants and other government assistance were recorded in the consolidated statements of income as a reduction to
research and development expenses and to cost of services and other revenue expenses, as follows:
(in thousands)
Research and development
Costs of services and other revenue
TOTAL GOVERNMENT GRANTS
Government grants notably include research and development tax credits received in France.
Note 6 Personnel Costs
Year ended December 31,
2014
€43,099
-
€43,099
2013
€27,368
1,556
€28,924
4
Personnel costs
Personnel costs, excluding share-based payments (€30.3 million
in 2014 and €35.4 million in 2013, see Note 7 Share-based
Payments) and associated payroll taxes (€13.0 million in 2014
and nil in 2013), are presented in the following table:
(in thousands)
Personnel costs
Social security costs
TOTAL
Year ended December 31,
2014
2013
€(882,120)
€(755,516)
(215,836)
(195,528)
€(1,097,956)
€(951,044)
Individual right to training for employees in France
French law provides employees employed under indefinite-
term employment contracts by French entities within the
Company with the right to receive individual training of at
least 20 hours per year. Individual training rights can be
accumulated over six years and the related costs are expensed
as incurred.
As of December 31, 2014, accumulated individual training
rights were approximately 301,000 hours.
Note 7 Share-based Payments
Compensation expense related to share-based payments is recorded in the consolidated statements of income as follows:
(in thousands)
Research and development
Marketing and sales
General and administrative
Cost of revenue
TOTAL COMPENSATION EXPENSE RELATED TO SHARE-BASED PAYMENTS
Year ended December 31,
2014
2013
€(12,500)
€(14,850)
(11,077)
(11,911)
(5,828)
(850)
(7,812)
(824)
€(30,255)
€(35,397)
DASSAULT SYSTÈMES ANNUAL REPORT 2014 97
4 Financial statements
Consolidated Financial Statements
Changes during 2014 and 2013 of unvested options and performance shares to which IFRS 2 “Share-based Payment” is
applicable are as follows:
UNVESTED AT JANUARY 1, 2013
Granted
Vested
Forfeited
UNVESTED AT DECEMBER 31, 2013
Granted
Vested
Forfeited
UNVESTED AT DECEMBER 31, 2014
* Restated to reflect the two-for-one stock split effected on July 17, 2014 (see Note 23 Shareholders’ Equity).
Number of awards*
Performance
shares
Stock options
Total
2,459,310
5,788,000
8,247,310
–
–
–
(300,000)
(3,390,400)
(3,690,400)
(70,800)
(85,600)
(156,400)
2,088,510
2,312,000
4,400,510
1,359,880
624,450
1,984,330
(888,750)
(2,272,000)
(3,160,750)
(70,800)
2,488,840
(54,600)
609,850
(125,400)
3,098,690
As of December 31, 2014, total compensation cost related to unvested awards expected to vest but not yet recognized was
€39.6 million, and the Company expects to recognize this expense over a weighted average period of 2 years, no later than
February 21, 2018.
Performance shares
A summary of the Company’s performance shares plans is as follows:
Plan
2010-02
2010-03
2010-04
2010-05
2014-A
and 2014-B
Date of General Meeting of Shareholders
05/27/2010
05/27/2010
05/27/2010
05/27/2010
05/30/2013
Date of grant by Board of Directors
Total number of shares granted
Restated total number of shares granted*
Acquisition period (in years)(1 )
Performance conditions
09/29/2011
09/29/2011
09/07/2012
09/07/2012
02/21/2014
406,400
812,800
150,000
300,000
539,230
1,078,460
Three to four(2 )
Two Three to four(2 )
150,000
300,000
Two
679,940
1,359,880
Four
See Note(3 )
See Note(4 )
See Note(3 )
See Note(4 )
See Note(5 )
Performance conditions is reached at December 31, 2014
Yes
Yes
Yes
Yes
N/A
* Restated to reflect the two-for-one stock split effected on July 17, 2014 (see Note 23 Shareholders’ Equity).
(1 ) Subject to the condition that the beneficiary be an employee or a director of the Company at the acquisition date.
(2 ) Three years in France and four years abroad.
(3 ) Non-market performance conditions based on actually realized non-IFRS diluted earnings per share of the Group compared to the upper limit of the non-IFRS diluted earnings per
share objective during three years (2011, 2012 and 2013 for 2010-02 Shares and 2012, 2013 and 2014 for 2010-04 Shares). The shares granted to the CEO are also subject to
an additional performance condition related to variable compensation dependent on achieving performance criteria previously established by the Board of Directors.
(4 ) Performance condition related to the CEO’s variable compensation dependent on achieving performance criteria previously established by the Board of Directors.
(5 ) Performance condition measured based on two alternative criteria, the evolution of the non-IFRS diluted earnings per share of the Group or the evolution of the price of the
Dassault Systèmes share compared to the CAC 40 index (market condition) for each of the years 2015, 2016 and 2017. The shares granted to the CEO are also subject to an
additional performance condition related to variable compensation dependent on achieving performance criteria previously established by the Board of Directors.
The weighted average fair value of shares granted in 2014 was
€37.47 (€18.74 after the two-for-one stock split effected on
July 17, 2014). It was estimated on the date of grant using
a Monte-Carlo simulation model. The model simulates the
performance of Dassault Systèmes share price and compares
it against the performance of the CAC 40 index. Assumptions
used are as follows: expected volatility rate of 21%, expected
dividend yield of 1% and average risk-free interest rate of
0.42%.
Stock option
Since 1996, the General Meeting of Shareholders has
authorized the Board of Directors to implement several stock
option plans for eligible employees and executives. Options
generally vest over various periods ranging from one to four
years, subject to continued employment. Options generally
expire seven to eight years from grant date, or after termination
of employment, whichever is earlier. To date options have
98 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
generally been granted at an exercise price equal to or greater
than the grant-date market value of the Company’s share.
from grant date or shortly after termination of employment,
whichever is earlier.
Pursuant to an authorization granted by the shareholders at
the General Meeting of Shareholders held on May 30, 2013,
the Board of Directors decided to grant 312,225 options
to subscribe to Dassault Systèmes shares (giving right to
subscribe to 624,450 shares after the two-for-one stock split)
to certain employees based outside of France of certain newly
acquired companies on May 26, 2014, at an exercise price of
€91 (€45.50 after the two-for-one stock split).
Such options shall be vested at the end of an acquisition
period of two to four years, subject to the condition that
the beneficiary be an employee of the Company at the
acquisition date and to the achievement of certain non-
market performance objectives. The options expire eight years
The weighted average grant-date fair value of options granted
in 2014 was €16.47 (€8.24 after the two-for-one stock split ).
It was estimated on the date of grant using a Black-Scholes
option pricing model. Assumptions used are as follows:
life of five years, expected
weighted-average expected
volatility rate of 22%, expected dividend yield of 1% and
average risk-free interest rate of 0.23%.
The expected volatility was determined using a combination of
the historical volatility of the Company’s stock and the implied
volatility of the Company’s exchange-traded options adjusted
for other factors, such as a comparison to the Company’s peer
group.
A summary of the Company’s stock option activity is as follows:
4
OUTSTANDING AS OF JANUARY 1,
Granted
Exercised
Forfeited
OUTSTANDING AS OF DECEMBER 31,
Exercisable
2014
2013
Number of
shares*
Weighted
average exercise
price *
Number of
shares *
Weighted
average exercise
price *
7,094,974
624,450
(2,375,837)
(56,176)
5,287,411
4,677,561
€21.06
9,376,838
€20.98
45.50
21.32
29.22
€23.73
€20.90
–
(2,190,064)
(91,800)
7,094,974
4,782,974
–
20.75
21.02
€21.06
€19.87
* Restated to reflect the two-for-one stock split effected on July 17, 2014 (see Note 23 Shareholders’ Equity).
A summary of the remaining contractual life and the exercise price of options outstanding as of December 31, 2014 is presented
below:
SOP plan
2008-02
2010-01
2008-01
2014-01
OUTSTANDING AS OF DECEMBER 31, 2014
* Restated to reflect the two-for-one stock split effected on July 17, 2014 (see Note 23 Shareholders’ Equity).
Number of
shares *
2,093,242
1,725,288
859,031
609,850
5,287,411
Remaining
life (years)
Exercise price *
2.91
3.40
0.73
7.41
3.23
€19.50
23.50
19.08
45.50
€23.73
DASSAULT SYSTÈMES ANNUAL REPORT 2014 99
4 Financial statements
Consolidated Financial Statements
Note 8 Other Operating Income and Expense, Net
Other operating income and expense, net are comprised of the following:
(in thousands)
Acquisition costs(1)
Restructuring costs(2)
Costs incurred in connection with relocation activities(3)
Other(4)
OTHER OPERATING INCOME AND EXPENSE, NET
Year ended December 31,
2014
€(20,312)
(10,286)
(6,438)
(2,273)
2013
€(6,936)
(2,414)
(2,931)
5,562
€(39,309)
€(6,719)
(1) In 2014, transaction costs primarily relating to the acquisition of Realtime Technology AG (“RTT”) , Accelrys and Quintiq. In 2013, transaction costs primarily relating to the
acquisition of Apriso (see Note 16 Business Combinations).
(2) In 2014 and 2013, primarily composed of severance costs relating to the termination of employees following the Company’s decision to rationalize its sales organization principally
in Europe. In 2014, also includes severance costs related to the closure of offices in the Unites States.
(3) In 2014, primarily composed of expenses related to the reorganization of the 3DS Boston Campus in the United States. In 2013, primarily composed of costs related to the
relocation of the Company’s premises in Tokyo, Japan.
(4) In 2013, mainly composed of a gain recognized following the sale of a consolidated entity.
Note 9
Interest Income and Expense, Net and Other Financial
Income and Expense, Net
Interest income and expense, net and other financial income and expense, net for the years ended December 31, 2014 and 2013
are as follows:
(in thousands)
Interest income(1)
Interest expense(2)
INTEREST INCOME AND EXPENSE, NET
Foreign exchange losses, net(3)
Other, net
OTHER FINANCIAL INCOME AND EXPENSE, NET
Year ended December 31
2014
2013
€22,869
€21,302
(5,738)
17,131
(4,060)
1,865
€(2,195)
(3,054)
18,248
(468)
183
€(285)
(1) Interest income is primarily composed of interests on cash, cash equivalents and short-term investments.
(2) Mainly include interest expense of €4.4 million and €1.8 million for the years ended December 31, 2014 and 2013, respectively, due under a term loan facility agreement entered
into in June 2013 for €350 million (see Note 20. Borrowings).
(3) In 2014, foreign exchange losses, net are primarily composed of realized and unrealized exchange gains and losses on receivables and loans denominated in U.S. dollars and
Japanese yen.
100 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Note 10 Income Taxes
Deferred tax assets and liabilities are as follows:
(in thousands)
Deferred tax assets:
Accelerated depreciation and amortization for financial statement purposes
Profit-sharing and pension accruals
Provisions and other expenses
Net tax loss and tax credit carryforward assets
TOTAL DEFERRED TAX ASSETS
Deferred tax liabilities:
Amortization of acquired intangibles
Accelerated depreciation and amortization for tax purposes
Other
TOTAL DEFERRED TAX LIABILITIES
NET DEFERRED TAX LIABILITY
The schedule of deferred tax assets and liabilities is as follows:
(in thousands)
Current deferred tax assets
Non-current deferred tax assets
TOTAL DEFERRED TAX ASSETS
Current deferred tax liabilities
Non-current deferred tax liabilities
TOTAL DEFERRED TAX LIABILITIES
NET DEFERRED TAX LIABILITY
Financial statements
Consolidated Financial Statements
4
4
Year ended December 31,
2014
2013
€44,118
€41,619
42,551
77,276
58,125
27,747
59,887
44,657
222,070
173,910
(314,314)
(142,368)
(31,940)
(14,869)
(361,123)
€(139,053)
(30,228)
(16,557)
(189,153)
€(15,243)
Year ended December 31,
2014
2013
€51,618
€34,948
27,957
79,575
(12,411)
(206,217)
(218,628)
€(139,053)
52,523
87,471
(15,081)
(87,633)
(102,714)
€(15,243)
Non-current deferred tax liabilities mainly include the tax effect of intangible assets created through business combinations
(primarily Accelrys, Quintiq and Apriso).
Change in deferred taxes can be summarized as follows:
(in thousands)
NET DEFERRED TAX ASSET AS OF JANUARY 1,
Changes included in the income statement
Business combinations
Other changes included in shareholders’ equity
Currency translation adjustments
NET DEFERRED TAX (LIABILITY) AS OF DECEMBER 31,
Year ended December 31,
2014
€(15,243)
39,887
2013
€1,983
14,787
(163,112)
(37,227)
9,352
(9,937)
3,877
1,337
€(139,053)
€(15,243)
DASSAULT SYSTÈMES ANNUAL REPORT 2014 101
4 Financial statements
Consolidated Financial Statements
The components of income before income taxes are as follows:
(in thousands)
France
Foreign
INCOME BEFORE INCOME TAXES
The significant components of income tax expense are as follows:
(in thousands)
France
Foreign
CURRENT TAXES
Change in deferred taxes
INCOME TAX EXPENSE
Year ended December 31,
2014
2013
€243,410
€261,062
202,342
259,944
€445,752
€521,006
Year ended December 31,
2014
2013
€(90,613)
€(114,401)
(102,576)
(193,189)
39,887
(66,222)
(180,623)
14,787
€(153,302)
€(165,836)
Differences between the income tax provision and the provision computed using the statutory French income tax rate are as
follows:
(in thousands)
Taxes computed at the statutory rate of 38%
Foreign tax rate differentials
R&D tax credit and other tax credits(1)
Tax exempt income(2)
Adjustments of prior income tax provision
Other, net
INCOME TAX EXPENSE
Effective tax rate
Year ended December 31,
2014
2013
€(169,386)
€(197,982)
3,233
15,831
4,634
(1,754)
(5,860)
8,383
14,701
11,179
1,503
(3,620)
€(153,302)
€(165,836)
34.4%
31.8%
(1) R&D tax credit and other tax credits derived mainly from research tax credits in France and in the United States.
(2) Income received by the Company in connection with certain intercompany financing arrangements is taxed at a reduced rate.
At December 31, 2014, there were unrecognized tax losses and tax credit carried forward of €97.4 million, which are scheduled
to expire after 2020.
Note 11 Earnings per Share
Basic net income per share is determined by dividing net
income attributable to equity holders of the Company by the
weighted average number of common shares outstanding
during the period. Diluted net income per share is determined
by dividing net income attributable to equity holders of
the Company by the combination of the weighted average
number of common shares outstanding during the period and
the dilutive effect of stock options and performance shares.
102 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
The following table presents the calculation for both basic and diluted net income per share:
(in thousands, except shares and per share data)
Net income attributable to equity holders of the Company
Weighted average number of shares outstanding
Dilutive effect of share-based payments
Diluted weighted average number of shares outstanding
Basic net income per share
Diluted net income per share
* Restated to reflect the two-for-one stock split effected on July 17, 2014 (see Note 23 Shareholders’ Equity).
Financial statements
Consolidated Financial Statements
4
Year ended December 31,
2014
2013 *
€291,241
€352,279
250,855,961
249,734,306
4,430,104
5,457,426
255,286,065
255,191,732
€1.16
€1.14
€1.41
€1.38
Note 12 Cash and Cash Equivalents and Short-term Investments
4
Cash and cash equivalents are comprised of the following:
(in thousands)
Bank accounts
Cash equivalents
CASH AND CASH EQUIVALENTS
Year ended December 31,
2014
2013
€71,864
€68,825
1,032,342
1,669,035
€1,104,206
€1,737,860
At December 31, 2014 and 2013, approximately 35% and
28% of cash and cash equivalents was denominated in
U.S. dollars, respectively.
Short-term investments of €71.3 and €65.8 million at
December 31, 2014 and 2013, respectively, were primarily
comprised of bank certificates of deposit, mutual funds and
fixed term deposits. At December 31, 2014 and 2013, short-
term investments included approximately 53% and 50% of
investments denominated in U.S. dollars, respectively.
investments are
Cash, cash equivalents and short-term
maintained on deposit with high credit-quality financial
institutions, principally in France. The Company follows a
conservative policy for investing its cash resources, mostly
relying on short-term maturity investments. Investment rules
are determined and controlled by the treasury department of
Dassault Systèmes SA.
The Company has adopted policies regarding financial
ratings and the spread of maturity dates in order to ensure
the security and liquidity of its financial instruments. The
Company’s management oversees the credit-worthiness of
its counterparts and the quality of its investments closely and
believes that it has minimal exposure to the risk of bankruptcy
of any one of them. The Company also closely oversees the
liquidity of its financial assets held at these same counterparts.
In this regard, the Company follows in particular the credit
rating of each of its counterparties and, up to the present
time, all of its counterparties are rated in the Investment Grade
category by rating agencies. As a result, the Company believes
that it has very low exposure to credit or counterparty risk.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 103
4 Financial statements
Consolidated Financial Statements
Note 13 Trade Accounts Receivable, Net and Other Current Assets
Trade accounts receivable and other current assets are receivables measured at amortized cost.
Trade accounts receivable
(in thousands)
Trade accounts receivable
Allowance for trade accounts receivable
TRADE ACCOUNTS RECEIVABLE, NET
The maturities of trade accounts receivable, net, were as follows:
(in thousands)
Less than 3 months past due
3 to 6 months past due
More than 6 months past due
TRADE ACCOUNTS RECEIVABLE PAST DUE
Trade accounts receivable not yet due
TOTAL TRADE ACCOUNTS RECEIVABLE, NET
Year ended December 31,
2014
2013
€648,732
€492,147
(21,070)
(19,523)
€627,662
€472,624
Year ended December 31,
2014
2013
€96,694
€63,580
11,756
9,593
118,043
509,619
7,374
4,769
75,723
396,901
€627,662
€472,624
The Company is not dependent on any of its principal clients. No single customer or sales channel partner represented more than
5% of the Company’s total revenue in 2014 and 2013.
Other current assets
Other current assets consist of the following:
(in thousands)
Prepaid expenses
Value added tax
Derivatives, current (1)
Other current assets
TOTAL OTHER CURRENT ASSETS
(1) See Note 21. Derivatives and Currency and Interest Rate Risk Management.
Year ended December 31,
2014
€39,097
35,302
4,931
18,452
€97,782
2013
€33,568
32,762
929
21,637
€88,896
104 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
Note 14 Property and Equipment
Property and equipment consist of the following:
(in thousands)
Computer equipment
Office furniture and equipment
Leasehold improvements
Buildings
TOTAL
Year ended December 31, 2014
Year ended December 31, 2013
Gross
Accumulated
depreciation
Net
Gross
Accumulated
depreciation
Net
€151,990
€(104,034 )
€47,956
€132,350
€(96,959)
€35,391
50,471
92,328
6,347
(28,676 )
(30,714 )
(975)
21,795
61,614
5,372
41,529
69,654
5,704
(25,805)
(25,353)
(672)
15,724
44,301
5,032
€301,136
€(164,399 )
€136,737
€249,237
€(148,789)
€100,448
The change in the carrying amount of property and equipment as of December 31, 2014 is as follows:
(in thousands)
Computer
equipment
Office furniture
and equipment
Leasehold
improvements
NET PROPERTY AND EQUIPMENT AS OF JANUARY 1, 2014
€35,391
€15,724
Additions
Business combinations
Other changes
Depreciation for the period
Exchange differences
23,307
10,487
225
(23,480)
2,026
7,348
3,885
(1,130)
(5,401)
1,369
€44,301
14,862
6,957
(704)
(7,913)
4,111
Buildings
Total
€5,032
€100,448
–
–
–
(216)
556
45,517
21,329
(1,609)
(37,010)
8,062
NET PROPERTY AND EQUIPMENT AS OF DECEMBER 31, 2014
€47,956
€21,795
€61,614
€5,372
€136,737
The change in the carrying amount of property and equipment as of December 31, 2013 is as follows:
(in thousands)
Computer
equipment
Office furniture
and equipment
Leasehold
improvements
Buildings
Total
NET PROPERTY AND EQUIPMENT AS OF JANUARY 1, 2013
€35,133
€19,425
€47,414
€5,871
€107,843
Additions
Other changes
Depreciation for the period
Exchange differences
21,561
16
(19,953)
(1,366)
3,068
(666)
(4,993)
(1,110)
5,982
1,121
(8,213)
(2,003)
267
–
(221)
(885)
30,878
471
(33,380)
(5,364)
NET PROPERTY AND EQUIPMENT AS OF DECEMBER 31, 2013
€35,391
€15,724
€44,301
€5,032
€100,448
4
DASSAULT SYSTÈMES ANNUAL REPORT 2014 105
4 Financial statements
Consolidated Financial Statements
Note 15 Non-Current Financial Assets
Non-current financial assets consist of the following:
(in thousands)
Tax receivable(1)
Loans receivable, non-current
Investments
Derivatives, non-current(2)
Deposits and other non-current financial assets
NON-CURRENT FINANCIAL ASSETS
Year ended December 31,
2014
€22,194
14,487
12,422
4,663
15,760
€69,526
2013
€–
13,012
9,531
9,650
16,010
€48,203
(1) Tax payment following a tax reassessment which is disputed by the Group with the relevant authorities (see Note 25 Commitments and Contingencies).
(2) See Note 21. Derivatives and Currency and Interest Rate Risk Management.
Note 16 Business Combinations
2014 acquisitions
Realtime Technology AG
(renamed “Dassault Systemes 3DExcite GmbH”)
On January 13, 2014, the Company acquired 84% of Realtime
Technology AG (“RTT”), and further increased its share to
100% as of December 31, 2014, for total cash consideration
of approximately €190.8 million. Headquartered in Munich,
Germany, RTT is a leading provider of professional high-end
3D visualization software, marketing solutions and computer
generated imagery services.
The allocation of the purchase price resulted in €113.1 million
of goodwill primarily composed of the synergies between
RTT and the Company’s activities, with the introduction of
a new brand, 3DEXCITE, extending the Company’s offerings
to address marketing professionals in its core and target
industries.
Accelrys Inc.
On April 29, 2014, the Company completed its acquisition
of 100% of Accelrys Inc. (“Accelrys”), for cash consideration
of approximately €541.5 million. Based in San Diego, United
States, Accelrys is a leading provider of scientific innovation
lifecycle management software for chemistry, biology and
materials sciences industries.
The preliminary allocation of the purchase price resulted in
€322.4 million of goodwill. The primary items that generated
goodwill include mainly the value of the synergies between
Accelrys and the Company’s activities, with the creation of the
BIOVIA brand, addressing science-based industries.
Quintiq Holding B.V.
On September 8, 2014, the Company completed
its
acquisition of 100% of Quintiq Holding B.V. (“Quintiq”), for
cash consideration of approximately €259.8 million, including
a contingent consideration of approximately €10 million to be
paid in 2015 subject to performance achieved in 2014. Based
in Bois-Le-Duc, t he Netherlands, Quintiq is a global leader in
operations management and optimization.
The preliminary allocation of the purchase price resulted in
€86.0 million of goodwill. The primary items that generated
goodwill include mainly the value of the synergies between
Quintiq and the Company’s activities.
Other acquisitions
In July 2014, the Company completed its acquisition of 100%
of SIMPACK and Sobios SAS for total cash consideration of
approximately €46.9 million. These transactions resulted in
€25.6 million of goodwill.
Purchase price allocation
The estimated fair values of assets acquired and liabilities
assumed
in connection with the Accelrys and Quintiq
acquisitions presented below are provisional. The Company
is waiting for additional information necessary to finalize
these fair values and the provisional measurements of fair
value presented are subject to change. The Company expects
to finalize the valuation and complete the purchase price
allocation as soon as practical and no later than one year from
the acquisition date.
106 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
The purchase prices of RTT, Accelrys, Quintiq and other acquisitions have been allocated to identifiable assets acquired and
liabilities assumed based on estimated fair values at the date of the acquisition, as follows:
(in thousands)
Cash and cash equivalents
Trade accounts receivable
Other assets
Intangible assets acquired(1)
Unearned revenue(2)
Other liabilities
Deferred taxes, net
TOTAL IDENTIFIABLE NET ASSETS
Goodwill
TOTAL PURCHASE PRICE
RTT
€13,176
22,050
8,727
73,506
(985)
(13,582)
(25,205)
€77,687
113,143
Accelrys
€46,762
22,046
15,688
243,432
(12,669)
(27,742)
(68,432)
Quintiq
€7,148
18,082
10,326
232,526
(4,679)
(27,035)
(62,562)
€219,085
€173,806
322,404
85,994
Other
acquisitions
€6,518
1,669
2,451
32,771
(2,169)
(13,025)
(6,913)
€21,302
25,566
Total
€73,604
63,847
37,192
582,235
(20,502)
(81,384)
(163,112)
€491,880
547,107
€190,830
€541,489
€259,800
€46,868
€1,038,987
(1) Intangible assets acquired are subject to amortization and include the following.
(in thousands)
Software
Customer relationships
Other
RTT
€49,506
20,000
4,000
Accelrys
€58,595
184,115
722
Quintiq Other acquisitions
Total
€214,289
18,237
-
€18,859
13,912
-
€341,249
236,264
4,722
TOTAL INTANGIBLE ASSETS ACQUIRED
€73,506
€243,432
€232,526
€32,771
€582,235
(2) The carrying values of unearned revenue were reduced to reflect the fair value of obligations assumed. As a result, approximately €82.1 million of revenues that would have
otherwise been recorded by these entities had they not been acquired by the Company will not be recognized in the Company’s consolidated statements of income.
The unaudited financial information presented in the table
below summarizes the combined results of operations for
the year ended December 31, 2014 as if the acquisitions had
occurred at the beginning of the period. This information is
presented for informational purposes and does not purport to
be indicative of the results that will be achieved in the future.
This financial information reflects the adjustment to reduce
unearned revenue to the fair value of the associated obligation,
and the additional amortization expense, assuming the fair
value adjustments to deferred revenue and intangible assets
had been applied from the beginning of the period, with the
related tax effects.
(in thousands)
Revenue
Net income
Year ended
December 31, 2014
(unaudited)
€2,376,472
€243,648
in the Company’s consolidated financial statements as of
December 31, 2014 is as follows:
(in thousands)
Revenue
Net income
2013 acquisitions
Year ended
December 31, 2014
€160,923
€(44,897)
Apriso
On July 1, 2013, the Company completed its acquisition
of 100% of Apriso for cash consideration of approximately
€179.2 million (including €2.0 million to be paid at a later
date). Headquartered in Long Beach, California, Apriso is a
leading provider of manufacturing operations management
software solutions.
In addition, the portion of acquired companies’ revenue and
net income generated since the acquisition date and included
The allocation of the purchase price resulted in €95.3 million
of goodwill.
4
DASSAULT SYSTÈMES ANNUAL REPORT 2014 107
4 Financial statements
Consolidated Financial Statements
The purchase price has been allocated to identifiable assets acquired and liabilities assumed based on estimated fair values at the
date of the acquisition, as follows:
(in thousands)
Cash and cash equivalents
Trade accounts receivable
Other assets
Intangible assets acquired (1)
Unearned revenue (2)
Other liabilities
Deferred taxes, net
TOTAL IDENTIFIABLE NET ASSETS
Goodwill
TOTAL PURCHASE PRICE
(1) Intangible assets acquired are subject to amortization and include the following:
(in thousands)
Software
Customer relationships
TOTAL INTANGIBLE ASSETS ACQUIRED
€14,838
10,382
2,646
94,730
(3,452)
(7,147)
(28,019)
83,978
95,263
€179,241
€61,747
32,983
€94,730
(2) The carrying value of Apriso’s unearned revenue was reduced to reflect the fair value of the contracts in effect at the date of acquisition. As a result, approximately €2.4 million of
revenues that would have otherwise been recorded by Apriso had this entity not been acquired by the Company will not be recognized in the Company’s consolidated statements
of income.
Other acquisitions
In 2013, the Company completed its acquisition of 100% of
FE-DESIGN group, SIMPOE, Archivide o, SFE, Safe Technology
and Strategic Business Solutions for total cash consideration of
approximately €60.1 million (including €5.5 million to be paid
at a later date). These transactions resulted in €33.9 million
of goodwill.
Note 17 Intangible Assets
Intangible assets consist of the following:
(in thousands)
Software
Customer relationships
Other intangible assets
Year ended December 31, 2014
Year ended December 31, 2013
Gross
Accumulated
amortization
Net
Gross
Accumulated
amortization
Net
€1,021 ,520
€(399 ,873 )
€621,647
€639,881
€(315,541)
€324,340
908,095
(366,521)
26,781
(19 ,376 )
541,574
7,405
601,924
19,857
(270,872)
(16,461)
331,052
3,396
TOTAL INTANGIBLE ASSETS
€1,956 ,396
€(785 ,770 )
€1,170,626
€1,261,662
€(602,874)
€658,788
The change in the carrying amount of intangible assets as of December 31, 2014 is as follows:
(in thousands)
Software
Customer
relationships
Other intangible
assets
Total intangible
assets
NET INTANGIBLE ASSETS AS OF JANUARY 1, 2014
€324,340
€331,052
Business combinations
Other additions
Amortization for the period
Exchange differences
341,249
3,077
(69,299)
22,280
236,264
253
(68,930)
42,935
€3,396
4,722
46
€658,788
582,235
3,376
(1,103)
(139,332)
344
65,559
NET INTANGIBLE ASSETS AS OF DECEMBER 31, 2014
€621,647
€541,574
€7,405
€1,170,626
108 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
The change in the carrying amount of intangible assets as of December 31, 2013 is as follows:
(in thousands)
Software
Customer
relationships
Other intangible
assets
Total intangible
assets
NET INTANGIBLE ASSETS AS OF JANUARY 1, 2013
€281,726
€384,387
€4,988
€671,101
Business combinations
Other additions
Amortization for the period
Exchange differences
94,778
11,403
(48,645)
(14,922)
35,029
–
(57,631)
(30,733)
25
109
129,832
11,512
(1,668)
(107,944)
(58)
(45,713)
NET INTANGIBLE ASSETS AS OF DECEMBER 31, 2013
€324,340
€331,052
€3,396
€658,788
consolidated balance sheet at December 31, 2014 is estimated
to be the following:
Estimated intangible assets’ amortization expense
4
Total
intangible amortization expense was €139.3 and
€107.9 million for the years ended December 31, 2014, and
2013, respectively. The future amortization expense relating
to all intangible assets that are currently recorded on the
(in thousands)
2015
2016
2017
2018
2019 and thereafter
Note 18 Goodwill
The change in the carrying amount of goodwill as of December 31, 2014 and 2013 is as follows:
(in thousands)
GOODWILL AS OF JANUARY 1,
Business combinations
Exchange differences and other changes
GOODWILL AS OF DECEMBER 31,
The Company performed annual impairment tests in the fourth quarter of 2014 and 2013; no impairment of goodwill was
identified as a result of these tests.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 109
€166,253
153,257
141,090
132,594
577,432
Year ended December 31,
2014
2013
€872,952
€788,435
547,107
111,972
129,134
(44,617)
€1,532,031
€872,952
4 Financial statements
Consolidated Financial Statements
For the purpose of the impairment test, the Company
identified 11 cash-generating units (“CGUs”) or groups of
CGUs as of December 31, 2014, generally corresponding to
the Company’s main software products. Each CGU represents
the lowest level within the Company at which goodwill is
monitored for internal management purposes. Goodwill tested
for impairment purposes was allocated to each CGU, or groups
of CGUs that were expected to benefit from the synergies of
the combination.
Goodwill allocated to each CGU or groups of CGUs is as follows:
(in thousands)
2013 RTT acquisition
December 31,
Accelrys
acquisition
Quintiq
acquisition
Other
acquisitions
€169,199
185,118
134,001
119,896
118,984
–
–
145,754
€–
–
–
–
–
–
113,143
–
€–
–
–
–
–
322,404
–
–
€–
–
–
85,994
–
–
–
–
€–
24,226
–
–
–
1,340
–
–
Exchange
differences and
other changes
€6,520
22,393
15,822
12,603
5,027
45,383
–
4,224
December 31,
2014
€175,719
231,737
149,823
218,493
124,011
369,127
113,143
149,978
€872,952
€113,143
€322,404
€85,994
€25,566
€111,972
€1,532,031
CATIA
SIMULIA
ENOVIA
DELMIA
GEOVIA
BIOVIA
3DEXCITE
Other
TOTAL
The recoverable amount of each CGU or groups of CGUs has
been determined based on a value in use calculation. This
calculation uses cash flow projections based on financial
budgets covering a five- to ten-year period. The ten-year
period projections are used for activities that have longer
development cycles, representing approximately 40% of
the Group’s total goodwill as of December 31, 2014. Key
assumptions used to determine the value in use of assets are
derived from management objectives for revenue growth and
operating margin of each CGU or groups of CGUs. The discount
rates before taxes are between 11.7% and 14.7%. Cash flows
beyond that five- to ten-year period have been extrapolated
using a steady growth rate comprised between 2% and 3%,
reflecting long-term growth rates in the software industry.
At December 31, 2014, based on management estimates,
the Company concluded that the value in use of each CGU
or groups of CGUs significantly exceeded its carrying value.
Management believes that any reasonable possible change
in key assumptions described above on which recoverable
amount is based would not cause each CGU or groups of
CGUs’ carrying amount to significantly exceed its recoverable
amount. In particular, an increase of 200 basis points in the
pre-tax discount rate or a decrease of 200 basis points in the
long-term growth rates would not cause each CGU or groups of
CGUs’ carrying amount to significantly exceed its recoverable
amount, except GEOVIA for which an increase of 150 basis
points in the pre-tax discount rate would cause the recoverable
amount to equal the carrying amount.
110 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Note 19 Other Liabilities
Other liabilities are comprised of the following:
(in thousands)
Value added tax and other taxes
Provisions, current (1)
Borrowings, current (2)
Derivatives, current (3)
Other current liabilities
TOTAL OTHER CURRENT LIABILITIES
Post-employment benefits (4)
Provisions, non-current (1)
Accrual for deferred lease incentives
Employee profit sharing, non-current
Derivatives, non-current (3)
Other non-current liabilities
Financial statements
Consolidated Financial Statements
4
Year ended December 31,
2014
€62,880
12,408
9,984
298
23,048
€108,618
€114,915
80,452
46,090
25,774
12,163
21,343
2013
€49,003
1,148
20,039
2,492
9,682
€82,364
€77,042
54,744
38,201
24,992
2,499
15,337
4
TOTAL OTHER NON-CURRENT LIABILITIES
€300,737
€212,815
(1) See reconciliation of provisions below.
(2) See Note 20. Borrowings.
(3) See Note 21. Derivatives and Currency and Interest Rate Risk Management.
(4) See Note 22 Post-employment Benefits.
The change in the carrying value of provisions as of December 31, 2014 is as follows:
(in thousands)
PROVISIONS AS OF JANUARY 1, 2014
Additions
Utilization
Reversal of unused amounts
Business combinations
Exchange differences
Tax risks
€44,116
19,007
-
(11,643)
11,998
1,756
Claims,
litigation
and other
€10,464
13,342
(5,444)
(3,612)
367
361
Restructuring Total provisions
€1,312
15,614
(7,687)
(117)
2,265
761
€55,892
47,963
(13,131)
(15,372)
14,630
2,878
PROVISIONS AS OF DECEMBER 31, 2014
€65,234
€15,478
€12,148
€92,860
DASSAULT SYSTÈMES ANNUAL REPORT 2014 111
4 Financial statements
Consolidated Financial Statements
Note 20 Borrowings
In April 2010, the Company entered into a term loan facility in
Japan for JPY14,500 million (the equivalent of €115.0 million
as of the draw date) in order to finance a portion of the IBM
PLM acquisition. The facility bears interest at Japanese yen
Libor 1 month plus 0.60% per annum, and is scheduled to be
repaid by the Company in ten equal semi-annual installments,
with the last payment being due in June 2015.
In June 2013, the Company entered into a five-year term loan
facility agreement for €350 million, which was immediately fully
drawn down and bore interest at Euribor plus 0.75% per annum.
In July 2014, the term loan facility’s maturity was extended
by one year and the facility now bears interest at Euribor plus
0.55% per annum.
The table below provides a breakdown of total borrowings by contractual maturity date as of December 31, 2014:
(in thousands)
Term loan facility in euros
Term loan facility in Japanese yen
TOTAL
Payments due by period
Total Less than 1 year
1-3 years
3-5 years
€350,000
9,984
€359,984
€–
9,984
€9,984
€–
–
€–
€350,000
–
€350,000
Note 21 Derivatives and Currency and Interest Rate Risk
Management
The fair market values of derivative instruments were determined
by financial institutions using option pricing models.
All financial instruments related to the foreign currency hedging
strategy of the Company have maturity dates of less than 3
years when the maturity of interest rate swap instruments
is less than 5 years. Management believes counter-party risk
on financial instruments is minimal since the Company deals
with major banks and financial institutions.
A description of market risks the Company is exposed to is
provided in paragraph 1.6.2 “Financial and Market Risks”.
Foreign currency risk
The Company transacts in various foreign currencies, primarily
U.S. dollars and Japanese yen.
In 2014, revenue denominated in U.S. dollars represented
approximately 33% of total revenue, compared with 32% in
2013. The Company’s operating expenses denominated in
U.S. dollars represented 34% of total operating expenses in
2014, compared with 32% in 2013.
As a result, the Company’s net operating exposure to
U.S. dollars amounted to €139.3 million in 2014 (6% of the
Company’s total revenue). The average value of the U.S. dollar
was stable against the euro in 2014 following a decrease of
3% in 2013, resulting in a neutral impact on the Company’s
revenue and operating income in 2014, and a negative impact
in 2013.
In 2014, revenue denominated in Japanese yen represented
approximately 12% of total revenue, compared with 13% in
2013. The Company’s operating expenses denominated in
Japanese yen represented 5% of total operating expenses in
2014 and 2013.
As a result, the Company’s net operating exposure to Japanese
yen amounted to €198.8 million in 2014 (9% of the Company’s
total revenue), and this exposure was in part hedged through
market instruments at a level of €124.4 million, as further
described below. The average value of the Japanese yen
decreased by approximately 8% against the euro in 2014, after
a decrease in value of approximately 21% in 2013, resulting in
a negative impact on the Company’s revenue and operating
income in 2014 and 2013.
The Company usually hedges exchange rate risk related to its
revenues and expenses coming from usual and predictable
activity arising in the normal course of operations. The
Company may also cover occasional exchange rate risk arising
from specific transactions, such as acquisitions paid for in
foreign currencies. Hedging activities are generally carried out
and managed by Dassault Systèmes SA for its own account
and on behalf of its subsidiaries. In certain cases, however,
the Company can authorize selected subsidiaries to enter into
hedging instruments directly. All hedging transactions and the
Company’s net exposure are reported to the Chief Financial
Officer on a quarterly basis.
112 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
The table below sets forth, for the year ended December 31, 2014, the euro value of the Company’s revenue, operating expenses
and net position, before and after hedging, denominated in U.S. dollars, Japanese yen and other currencies, principally the euro:
(in thousands)
Revenue
Operating expenses
NET POSITION
Hedge
NET POSITION AFTER HEDGE
Year ended December 31, 2014
U.S. dollars
Japanese yen
Euro and other
currencies
Total
€768,248
(628,918)
€139,330
–
€139,330
€284,449
€1,241,583
€2,294,280
(85,636)
(1,148,910)
(1,863,464)
€198,813
€92,673
€430,816
124,377
€74,436
–
124,377
€92,673
€306,439
With all other variables held constant, movements in euro/
U.S.dollar exchange rates by +10% or -10% would have had
an impact of €(12.7) and €15.5 million on operating income,
respectively. In addition, with all other variables held constant,
movements in euro/Japanese yen exchange rates by +10% or
-10% would have had an impact of €(18.1) and €22.1 million
on operating income, respectively.
To manage currency exposure, the Company generally uses
foreign exchange forward contracts. Except as indicated in the
table below, the derivative instruments held by the Company
are designated as accounting hedges, have high correlation
with the underlying exposure and are highly effective in
offsetting underlying price movements.
The effectiveness of forward contracts and currency options
is measured using forward rates and the forward value of the
underlying hedged transaction. During 2014 and 2013, the
portion of gains or losses from hedging instruments excluded
from the assessment of effectiveness and the ineffective
portions of hedges was nil.
4
At December 31, 2014 and 2013, the fair value of instruments used to manage the currency exposure was as follows:
(in thousands)
Forward exchange contract Japanese yen/euros – sale (1)
Forward exchange contract euros/Indian rupees – sale (1)
Forward exchange contract U.S. dollars/Indian rupees – sale (1)
Forward exchange contract Japanese yen/U.S. dollars – sale (1)
Cross currency swaps Canadian dollars/euros (2)
Cross currency swaps Australian dollars/euros (2)
Other instruments(2)
Year ended December 31,
2014
2013
Nominal
amount
€38,163
28,901
27,977
5,507
73,412
72,064
37,861
Fair value
€2,438
2,320
472
946
1,863
1,548
(294)
Nominal
amount
€2,229
28,464
36,733
–
70,370
69,787
27,258
Fair value
€929
(2,139)
(1,813)
–
4,972
4,672
(140)
(1) Instruments entered into by the Company to hedge the foreign currency exchange risk of forecasted sales.
(2) Derivatives not designated as hedging instruments. Changes in the derivatives’ fair value were recorded in other financial income and expense, net in the consolidated statement
of income. These instruments mainly relate to the acquisition of Gemcom.
Interest rate risk
Except for their impact on the general economic environment,
which is difficult to quantify, the Company believes that
changes in interest rates in 2014 did not materially affect
its revenue and earnings before financial income. Similarly,
interest rates are not expected to affect its business or future
operating income. Therefore, the Company’s interest rate risk
is primarily a risk related to a reduction of financial revenue.
In June 2010, the Company entered into interest rate swap
agreements for a total amount of JPY14,500 million that
have the economic effect of modifying forecasted interest
obligations relating to the term loan facility in Japan (see
Note 20. Borrowings) so that the interest payable effectively
becomes fixed at 0.41% until June 2015.
In July 2013, the Company entered into interest rate swap
agreements for a total amount of €350 million that have the
economic effect of modifying forecasted interest obligations
relating to the term loan facility entered into in June 2013
(see Note 20. Borrowings) so that the interest payable
effectively becomes fixed at 0.93% from June 2014 until
June 2018.
In July 2014, the maturity was extended by one year and the
interest rate changed to Euribor plus 0.55% per annum.
In October 2014, the Company entered into interest rate swaps
for a total amount of €350 million that have the economic
effect of modifying forecasted interest obligations relating to
the term loan facility, so that the interest payable effectively
becomes fixed at 0.49% from June 2018 until July 2019.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 113
4 Financial statements
Consolidated Financial Statements
Financial revenue, which is composed of interest income
from cash, cash equivalents and short-term investments, is
sensitive to fluctuations in interest rates. As of December 31,
2014, cash and cash equivalents and short-term investments
totaled €1,175.5 million, including €303.0 million sensitive
to fluctuations in interest rates mostly in Europe. With all
other variables held constant, an increase in interest rates of
100 basis points would have had a positive impact in 2014
of €3.8 million on financial income and a decrease in interest
rates of 100 basis points would have had a negative impact of
€2.0 million.
At December 31, 2014 and 2013, the fair value of instruments used to manage the interest rate risk was as follows:
(in thousands)
Interest rate swaps in euros
Interest rate swaps in Japanese yen
Note 22 Post-employment Benefits
Year ended December 31,
2014
Nominal
amount
Fair value
2013
Nominal
amount
€350,000
€(12,145)
€350,000
9,984
(15)
30,058
Fair value
€(809)
(84)
Contributions made to defined contribution plans were
€16.2 million and €12.5 million in 2014 and 2013 respectively.
The Company provides defined benefit retirement indemnities
to the employees of its French operations, and sponsors
defined benefit pension plans for certain employees in the
United States. The Company also has certain defined benefit
plans in other countries, mainly in Germany and in Japan.
In France, defined employee benefits
include certain
gratifications paid upon anniversary of employment and
retirement indemnities that are based upon an individual’s
years of credited service and annualized salary at retirement.
Retirement indemnity benefits vest and are settled as a lump
sum paid to the employee upon the employee’s retirement.
In the United States, pension benefits are based upon
years of credited service and the employee’s average final
earnings. Retirement benefits are funded by the Company’s
contributions to segregated pension plan assets, in an amount
that is sufficient to meet or exceed the minimum annual
funding requirements of the Employee Retirement Income
Security Act. In 2011, the Company decided to freeze the
American defined-benefit pension plan.
The projected benefit obligation was determined using the prospective method, based on the following assumptions:
Assumptions
Assumptions used to determine the benefit obligation:
Year ended December 31, 2014
Year ended December 31, 2013
Discount rate
Europe
2.10%
Average rate of compensation increase
2.50% – 3.00%
Assumptions used to determine the net periodic benefit cost:
U.S.
4.05%
N/A
Asia
0.80%
2.60%
Europe
3.50%
2.50% – 3.00%
U.S.
4.90%
N/A
Asia
1.20%
2.60%
Discount rate
Europe
3.50%
Average rate of compensation increase
2.50% – 3.00%
U.S.
4.90%
N/A
Asia
1.20%
2.60%
Europe
3.50%
2.50% – 3.00%
U.S.
3.80%
N/A
Asia
1.25%
2.50%
Year ended December 31, 2014
Year ended December 31, 2013
114 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
Components of net periodic costs
The components of net periodic benefit cost were as follows:
(in thousands)
Current service cost
Interest cost on benefit obligations
Interest income on plan assets
Other
NET PERIODIC BENEFIT COST
Obligations and funded status
Changes in benefit obligations and plan assets as of December 31, 2014 and 2013 are as follows:
(in thousands)
Benefit obligations at beginning of year
Current service cost
Interest cost on benefit obligations
Remeasurement losses (gains)(1)
Change in scope
Benefits paid
Exchange differences and other changes
BENEFIT OBLIGATIONS AT END OF YEAR
Fair value of plan assets at beginning of year
Employer contribution
Interest income on plan assets
Benefits paid
Remeasurement (losses) gains
Exchange rate differences and other changes
FAIR VALUE OF PLAN ASSETS AT END OF YEAR
NET DEFINED BENEFIT LIABILITY
(1) Remeasurement gains and losses mainly arise from changes in financial assumptions.
The benefit obligation by geographical location is as follows:
Europe
United States
Asia
TOTAL BENEFIT OBLIGATIONS
The fair value of plan assets by geographical location is as follows:
Europe
United States
TOTAL FAIR VALUE OF PLAN ASSETS
4
Year ended December 31,
2014
€(6,405)
(5,185)
2,626
(549)
2013
€(5,829)
(4,767)
2,164
134
€(9,513)
€(8,298)
Year ended December 31,
2014
2013
€139,304
€139,002
6,405
5,185
30,558
1,042
(3,026)
5,777
5,829
4,767
(6,463)
1,813
(2,266)
(3,378)
€185,245
€139,304
€62,262
€59,499
3,154
2,626
(1,245)
(841)
4,374
€70,330
2,268
2,164
(1,100)
756
(1,325)
€62,262
€(114,915)
€(77,042)
Year ended December 31,
2014
66%
26%
8%
100%
2013
67%
24%
9%
100%
Year ended December 31,
2014
47%
53%
100%
2013
52%
48%
100%
DASSAULT SYSTÈMES ANNUAL REPORT 2014 115
4 Financial statements
Consolidated Financial Statements
Plan assets
The weighted average asset allocations are as follows:
Debt instruments
Equity instruments
TOTAL
Year ended December 31,
2014
76%
24%
100%
2013
77%
23%
100%
Cash flows
The Company expects to make additional contributions to its pension plans in 2015 for €4 million.
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid:
(in thousands)
2015
2016
2017
2018
2019
2020-2024
Total
€(3,148)
(2,985)
(3,797)
(4,658)
(5,937)
(44,445)
Note 23 Shareholders’ Equity
Shareholders’ equity activity
As of December 31, 2014, Dassault Systèmes SA had
256,364,077 common shares issued with a nominal value of
€0.50 per share.
The General Meeting of Shareholders of May 26, 2014
decided to split the par value of the Dassault Systèmes share
in two. Consequently, the Board of Directors meeting held on
the same day decided to define July 17, 2014 as the effective
date of this split. Thus, for all former shares of €1 of nominal
value held as of July 17, 2014, shareholders received two new
shares of par value €0.50 each.
Changes in shares outstanding as of December 31, 2014 and 2013 are as follows:
(in number of shares)
SHARES ISSUED AS OF JANUARY 1,
Dividend paid in shares
Exercise of stock options
Cancellation of treasury stock
SHARES ISSUED AS OF DECEMBER 31,
Treasury stock as of December 31,
SHARES OUTSTANDING AS OF DECEMBER 31,
* Restated to reflect the two-for-one stock split effected on July 17, 2014.
Year ended December 31,
2014 *
2013 *
253,865, 970
250,193,556
1,604,620
1,482,350
2,375,837
2,190,064
(1,482,350)
−
256,364,077
253,865,970
(4,770,624)
(3,330,072)
251,593,453
250,535,898
116 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
The primary objective of the Company’s capital management
is to ensure that it maintains a strong credit rating and
healthy capital ratios in order to support its business and for
the purpose of increasing the profitability of shareholders’
equity and earnings per share. The Company manages its
capital structure and adjusts it in light of changes in economic
conditions. To maintain or adjust the capital structure, the
Company may adjust the dividend payment to shareholders,
return capital to shareholders or issue new shares. No changes
were made in the objectives, policies or processes during the
years ended December 31, 2014 and 2013.
Dividend rights
Dassault Systèmes SA is required to maintain a legal reserve
equal to 10% of the aggregate nominal value of its issued
share capital. The legal reserve balance was €12.7 and
€12.5 million as of December 31, 2014 and 2013, respectively,
and represents a component of retained earnings in the
consolidated balance sheet. The legal reserve is distributable
only upon the liquidation of Dassault Systèmes SA.
Distributable profit, consisting of net income of the year
increased by retained earnings from prior years and after
deduction for legal reserve when required, is available for
distribution to shareholders of the Company as dividends.
Allocation of this profit is subject to approval by the General
Meeting of Shareholders following recommendations by the
Board of Directors.
Components of other comprehensive income
In 2014 and 2013, the Shareholders’ Meeting approved the
distribution of a dividend of €103.4 and €99.5 million for
2013 and 2012 respectively, and offered shareholders the
option to receive payment of their dividend in the form of
new Dassault Systèmes shares. Shareholders who opted to
receive payment of the 2013 and 2012 dividend in the form
of new Dassault Systèmes shares represented approximately
68% of Dassault Systèmes’ shares, resulting in the issuance
of 802,310 and 741,175 (1,604,620 and 1,482,350 after
the two-for-one stock split) new ordinary shares in 2014
and 2013, respectively. The cash dividend was paid in 2014
and 2013 in an aggregate amount of €32.3 million and
€31.6 million, respectively.
Dividends per share were €0.42 and €0.40 (after the two-for-
one stock split) as of December 31, 2013 and December 31,
2012, respectively.
A dividend of €3.5 and €3.2 million was paid to non-controlling
interest in 2014 and 2013 respectively.
Stock repurchase programs
The General Meeting of Shareholders authorized the Board
to implement a share repurchase program limited to 10% of
the Company’s share capital. Under this authorization, the
Company may not buy shares at a price exceeding €150
per share or above a maximum annual aggregate amount of
€500 million.
4
(in thousands)
Cash flow hedges:
(Losses) Gains arising during the year
Less: reclassification adjustments for gains or losses included in the income statement
Available-for-sale securities:
Losses arising during the year
Less: reclassification adjustments for losses included in the income statement
Year ended December 31,
2014
2013
€(2,290)
(782)
€9,889
22,852
€(1,508)
€(12,963)
€–
–
€–
€(165)
(334)
€169
DASSAULT SYSTÈMES ANNUAL REPORT 2014 117
4 Financial statements
Consolidated Financial Statements
Note 24 Consolidated Statements of Cash Flows
Adjustments for non-cash items consist of the following:
(in thousands)
Depreciation of property and equipment
Amortization of intangible assets
Non-cash share-based payment expense
Other
ADJUSTMENTS FOR NON-CASH ITEMS
Changes in operating assets and liabilities consist of the following:
(in thousands)
(Increase) in trade accounts receivable
Increase (Decrease) in accounts payable
Increase (Decrease) in accrued compensation
(Decrease) in income tax payable
Increase in unearned revenue
Changes in other assets and liabilities
CHANGES IN OPERATING ASSETS AND LIABILITIES
Notes
14
17
7
Year ended December 31,
2014
€37,010
139,332
29,950
(18,544)
2013
€33,380
107,944
34,017
(6,863)
€187,748
€168,478
Year ended December 31,
2014
2013
€(56,170)
€(24,887)
23,543
418
(4,511)
(6,614)
(50,567)
(16,181)
86,712
15,319
36,979
(1,587)
€19,255
€(16,801)
Note 25 Commitments and Contingencies
Leases
The Company leases computer equipment, premises and office equipment under operating leases. Rent expense under operating
leases was €61.9 million for the year ended December 31, 2014 and €52.4 million for the year ended December 31, 2013.
At December 31, 2014, future minimum annual rental commitments under non-cancelable lease obligations were as follows:
(in thousands)
2015
2016
2017
2018
2019
2020 and thereafter
TOTAL FUTURE MINIMUM LEASE PAYMENTS
Operating leases
€70,282
66,321
63,430
56,090
51,825
231,199
€539,147
3DS Paris Campus (Headquarters facilities
in Vélizy-Villacoublay)
The Company has leased approximately 60,000 square
meters of office space for its headquarters facilities located in
Vélizy-Villacoublay, outside Paris, France since June 30, 2008.
In February 2013, the Company entered into a new lease
agreement for its headquarters facilities for a non-cancelable
initial term of 10 years beginning with the delivery of an
additional 13,000 square meters of office space expected by
year end 2016. Future minimum rental payments until the
end of the lease amount to approximately €272.8 million in
the aggregate and have been included in the table presented
above.
118 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
3DS Boston Campus
The Company has leased approximately 20,000 square meters
of office space for its campus located in United States since
June 1, 2011, regrouping the primary operating facilities of
the Company’s main American activities. The total rented
space will progressively increase, reaching 30,000 square
meters in 2017. Future minimum rental payments amount to
approximately €102.8 million in the aggregate and have been
included in the table presented above.
Litigation and other proceedings
The Company is involved in litigation and other proceedings,
such as civil, commercial and tax proceedings, incidental
to normal operations. The Company is subject to ongoing
tax audits and tax reassessments in jurisdictions in which
the Company has or had operations. A number of these
reassessments, in particular those related to acquisition
financing, are being challenged by the Company which is
strongly confident in the technical merits of its positions and
will continue to defend them with the relevant tax authorities.
In this context, the Company made a €22.2 million payment
to the French tax authorities in 2014 but disputed it with the
relevant authorities.
It is not possible to determine with certainty the outcome
of the dispute in these matters. However, in the opinion of
management, after consultation with legal and tax counsel,
the resolution of such litigation and proceedings should not
have a material effect on the consolidated financial statements
of the Company.
Note 26 Related-Party Transactions
4
Compensation of key management personnel
The table below summarizes compensation granted to the members of the Group Executive Committee and to the Chairman of
the Board as of December 31, 2014 and 2013:
(in thousands)
Short-term benefits (1)
Share-based compensation (2)
COMPENSATION OF KEY MANAGEMENT PERSONNEL
(1) Including gross salaries, bonus, incentives, profit-sharing, directors’ fees and fringe benefits.
(2) Expense recorded in the income statement for share-based payments (stock options and performance shares).
Year ended December 31,
2014
€11,074
12,442
€23,516
2013
€11,253
16,626
€27,879
In certain circumstances, the Group Chief Executive Officer is
entitled to an indemnity payment upon the termination of
his functions as Chief Executive Officer. The amount of the
indemnity due would be equivalent to a maximum of two
years of compensation as Chief Executive Officer and would
depend on satisfying the performance conditions established
for calculating his variable compensation.
Other transactions with related parties
The Company licenses its products for internal use to Dassault
Aviation, a sister company to the Company. The Chairman
of Dassault Systèmes SA is also the Chief Executive Officer
of the Industrial Group Marcel Dassault since January 2013.
Until this date, he was the Chief Executive Officer of Dassault
Aviation. Dassault Aviation licenses the Company’s products
on commercial terms consistent with those granted to the
Company’s other customers of similar size. These licenses
generated €14.1 and €13.4 million of software revenue for
the years ended December 31, 2014 and 2013, respectively.
The Company also provides service and support to Dassault
Aviation. Such activity generated service revenues of €8.0
and €9.0 million in the years ended December 31, 2014 and
2013, respectively. The balances of trade accounts receivable
with Dassault Aviation were €8.0 million, and €8.7 million at
December 31, 2014 and 2013, respectively.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 119
4 Financial statements
Consolidated Financial Statements
Note 27 Principal Dassault Systèmes Companies
The principal Dassault Systèmes SA subsidiaries included in the scope of consolidation as at December 31, 2014 are as follows:
Country
France
Germany
Germany
Consolidated companies
Dassault Data Services SAS
Dassault Systemes Deutschland GmbH
Dassault Systemes 3DExcite GmbH (formerly “Realtime Technology AG”)
Netherlands
Quintiq Applications B.V.
Italy
Sweden
United Kingdom
United Kingdom
Canada
Canada
United States
United States
United States
United States
United States
United States
United States
China
India
India
Dassault Systemes Italia Srl
Dassault Systemes AB
Dassault Systemes UK Limited
Dassault Systemes Biovia Limited (formerly “Accelrys Ltd”)
Dassault Systèmes Canada Inc.
Dassault Systemes Canada Software Inc. (formerly “Dassault Systemes Geovia Inc.”)
Dassault Systemes Americas Corp.
Dassault Systemes Corp.
Dassault Systemes Simulia Corp.
Dassault Systemes Services, LLC
Dassault Systemes SolidWorks Corporation
RTT USA, Inc.
Dassault Systemes Biovia Corp. (formerly “Accelrys Software Inc.”)
Dassault Systèmes (Shanghai) Information Technology Co., Ltd
3D PLM Software Solutions Limited
Dassault Systemes India Private Limited
South Korea
Dassault Systemes Korea Corp.
Japan
Japan
Dassault Systemes K.K.
SolidWorks Japan K.K.
% of Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
42% (1)
100%
100%
100%
100%
(1) The Company determined that it has control over operating and financial policies of 3DPLM. As a result, 3DPLM is fully consolidated in the Company’s consolidated financial
statements.
120 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Consolidated Financial Statements
4
4.1.2 Report of the Statutory Auditors on the Consolidated Financial
Statements
This is a free translation into English of the Statutory Auditors’ report issued in French and is provided solely for the convenience
of English speaking users. The Statutory Auditors’ report includes information specifically required by French law in such reports,
whether modified or not.
This information is presented below the opinion on the consolidated fi nancial statements and includes an explanatory
paragraph discussing the Auditors’ assessments of certain significant accounting and auditing matters. These assessments were
considered for the purpose of issuing an audit opinion on the consolidated financial statements taken as a whole and not to provide
separate assurance on individual account captions or on information taken outside of the consolidated financial statements.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards
applicable in France.
To the Shareholders
In compliance with the assignment entrusted to us by your General Meetings, we hereby report to you, for the year ended
December 31, 2014, on:
(cid:125) the audit of the accompanying consolidated financial statements of Dassault Systèmes;
4
(cid:125) the justification of our assessments;
(cid:125) the specific verification required by law.
These consolidated financial statements have been approved by the Board of Directors. Our role is to express an opinion on these
consolidated financial statements based on our audit.
I – Opinion on the consolidated financial statements
We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material
misstatement. An audit involves performing procedures, using sampling techniques or other methods of selection, to obtain
audit evidence about the amounts and disclosures in the consolidated financial statements. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made, as well as the overall
presentation of the consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial
position of the Group as at December 31, 2014 and of the results of its operations for the year then ended in accordance with
International Financial Reporting Standards as adopted by the European Union.
II – Justification of our assessments
In accordance with the requirements of Article L. 823-9 of the French Commercial Code (Code de commerce) relating to the
justification of our assessments, we bring to your attention the following matters:
(cid:125) the paragraph “Revenue recognition” of the Note 2 to the consolidated financial statements sets out the accounting principles
and methods used to account for revenue including firstly new software licenses along with related maintenance, and secondly
services and other revenue;
(cid:125) the paragraph “Business combinations and goodwill” of the Note 2 to the consolidated financial statements sets out the
accounting principles and methods used to determine the value of the assets and liabilities acquired through business
combinations, which are based on significant assumptions and estimates made by management;
(cid:125) the paragraph “Share-based payment” of the Note 2 to the consolidated financial statements sets out the accounting principles
and methods used to determine the fair value of the share-based payment awards granted to the directors, senior management
and employees, which is based on significant assumptions and estimates made by management.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 121
4 Financial statements
Consolidated Financial Statements
As part of our work, we verified the correct application of the above-mentioned accounting principles and methods, examined
the assumptions used and their application, and verified that the information provided in the corresponding Notes 16, 17 and 7
above was appropriate.
These assessments were made as part of our audit of the consolidated financial statements taken as a whole, and therefore
contributed to the opinion we formed which is expressed in the first part of this report.
III – Specific verification
As required by law, we have also verified in accordance with professional standards applicable in France the information presented
in the Group’s management report.
We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.
Neuilly-sur-Seine and Paris-La Défense, on March 23, 2015
The Statutory Auditors
PRICEWATERHOUSECOOPERS AUDIT
French original signed by:
Pierre Marty
ERNST & YOUNG ET AUTRES
French original signed by:
Jean-François Ginies
122 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Parent Company Financial Statements
4
4.2 Parent Company Financial Statements
The 2014 financial statements presented below are the individual parent company financial statements of Dassault Systèmes SA.
Presentation of the parent company financial statements and the valuation methods used
The financial statements for the year ended December 31, 2014 have been prepared in accordance with the 2014 French General
Chart of Accounts (Plan comptable général), the French Commercial Code and French regulatory requirements. They are presented
in the same manner and prepared using the same valuation methods as the preceding year.
Results of operations of Dassault Systèmes SA
In 2014, operating revenue increased 6.2% to €1,137.2 million from €1,070.5 million in 2013. Software revenue increased
1.9% to €886.4 million in 2014 from €870.0 million in 2013. The portion of revenue earned from export sales amounted to
€942.2 million, or 83.7% of net sales.
Operating expenses increased 8.3% to €880.6 million in 2014, from €813.4 million in 2013. The main drivers of this change are:
4
(cid:125) a 7.5% increase in other purchases and external expenses, mainly due to an increase in fees relating to the acquisition of
Accelrys and Realtime Technology AG (“ RTT“) in 2014, which were rebilled in full to the acquiring subsidiary;
(cid:125) a 13.8% increase in personnel costs coming from the increase in headcount, linked to the transfer of employees from
Exalead SA, SolidWorks Europe SARL and Apriso SAS as part of the merger operations (Article 1844-5 of the French Civil Code,
or transmissions universelles de patrimoine) and from salary increases;
(cid:125) a 13.6% increase in depreciation and reserves, mainly to hedge client risk in Europe.
Operating income was relatively stable at €256.6 million.
Financial revenue for 2014 amounted to €30.2 million, compared with €129.6 million for the preceding year, a decrease of
€99.4 million. This change was principally due to one-time dividends received from subsidiaries in 2013.
In 2014, income tax expense amounted to €45.2 million in 2014 as compared to €68.2 million in 2013. This change was chiefly
driven by the utilization of prior year tax losses from merger operations (transmissions universelles de patrimoine). Net income
amounted to €183.0 million in 2014 compared with €263.4 million in 2013.
At December 31, 2014, cash and short-term investments stood at €954.9 million, compared with €1,615.1 million at December 31,
2013. This decrease was chiefly due to the financing of acquisitions in 2014.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 123
4 Financial statements
Parent Company Financial Statements
4.2.1 Statement of income
(in thousands)
OPERATING REVENUE
Revenue
Of which exports
Other revenue
OPERATING EXPENSE
Other purchases and external expenses
Taxes, duties and similar payments
Personnel costs
Depreciation, amortization and provisions
Other operating expense
OPERATING INCOME
FINANCIAL INCOME AND EXPENSE, NET
CURRENT INCOME
EXCEPTIONAL INCOME/(LOSS)
REGULATED AND OPTIONAL EMPLOYEE PROFIT-SHARING
Contractual employee profit-sharing
Mandatory employee profit-sharing
INCOME TAX EXPENSE
NET INCOME
Years ended December 31
Notes
2014
2013
€1,137,227
€1,070,511
3
1,125,687
1,064,559
942,156
11,540
881,573
5,952
(880,631)
(813,435)
(354,382)
(329,669)
(20,095)
(17,748)
4
(303,616)
(266,755)
(36,812)
(32,391)
(165,726)
(166,872)
5
6
7
256,596
30,167
286,763
(22,752)
(35,842)
(17,921)
(17,921)
(45,164)
257,076
129,598
386,674
(21,083)
(33,934)
(18,422)
(15,512)
(68,216)
€183,005
€263,441
124 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
4.2.2 Balance sheet
(in thousands)
Assets
NON-CURRENT ASSETS
Intangible assets
Property and equipment
Non-current financial assets
CURRENT ASSETS
Receivables
Marketable securities
Treasury shares
Cash and cash equivalents
PREPAID EXPENSES
UNREALIZED EXCHANGE LOSSES
TOTAL ASSETS
(in thousands)
Liabilities
SHAREHOLDERS’ EQUITY
Capital
Share and contribution premiums
Legal reserve
Retained earnings
Income (loss) for the fiscal year
Regulated provisions
PROVISIONS FOR CONTINGENCIES AND LOSSES
FINANCIAL LIABILITIES
TRADE PAYABLES
UNEARNED REVENUE
UNREALIZED EXCHANGE LOSSES
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
Financial statements
Parent Company Financial Statements
4
4
Years ended December 31
Notes
2014
Net
2013
Net
10
11
12
13
14
14
€2,552,145
€1,902,448
312,474
37,612
157,788
36,278
2,202,059
1,708,382
1,356,173
1,936,393
291,924
947,409
109,382
7,458
19,975
20,430
243,180
1,612,759
78,140
2,314
16,106
27,982
€3,948,723
€3,882,929
Years ended December 31
Notes
2014
2013
15
€2,802,674
€2,663,824
128,182
755,799
12,693
126,933
697,563
12,510
1,710,502
1,550,675
183,005
263,441
12,493
78,119
376,962
648,450
40,418
2,100
12,702
85,497
373,439
724,374
35,447
348
€3,948,723
€3,882,929
16
17
19
20
DASSAULT SYSTÈMES ANNUAL REPORT 2014 125
4 Financial statements
Parent Company Financial Statements
4.2.3 Notes to the Parent Company Financial Statements
CONTENTS
Note 1 Description of Business and Key
Note 14 Treasury
Events of the Year
Note 2
Summary of Significant Accounting
Policies
Note 3
Revenue Breakdown
Note 4
Personnel Costs
Note 5
Financial Income and Expense, Net
Note 6
Exceptional Income/Loss
Note 7
Income Tax
Note 8
Performance Shares
Note 9 Additional Information
Note 10
Intangible Assets
Note 11 Property and Equipment
Note 12 Non-current Financial Assets
Notes 13 Receivables
127
127
130
130
131
131
132
132
133
134
134
135
135
Note 15 Shareholders’ Equity
Note 16 Provisions for Contingencies
and Losses
Note 17 Financial Liabilities
Note 18 Elements Concerning Related
Companies
Note 19 Trade Payables
Note 20 Unearned Revenue
Note 21 Financial Commitments
Note 22 Other Commitments
and Contingencies
Note 23 Additional Information
Note 24
Information Relating to Subsidiaries
and Shareholdings
136
136
138
139
139
140
140
141
142
142
143
126 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Parent Company Financial Statements
4
Note 1 Description of Business and Key Events of the Year
Description of business
Key Events of the Year
Dassault Systèmes SA provides software solutions and
consulting services, and operates as both a holding company
and a provider of services for the Dassault Systèmes Group.
The Company’s global customer base includes companies in
12 industrial sectors: Aerospace & Defense; Transportation &
Mobility; Marine & Offshore; Industrial Equipment; High-
Tech; Architecture, Engineering & Construction; Consumer
Goods – Retail; Consumer Packaged Goods – Retail; Life
Sciences; Energy, Process & Utilities; Financial & Business
Services; and Natural Resources. To serve its customers,
Dassault Systèmes SA has developed a broad software
applications portfolio, comprised of social and collaborative
applications, 3D modeling applications, content and simulation
applications, and information intelligence applications, all
powered by its 3DEXPERIENCE Platform.
Dassault Systèmes SA is a société anonyme, a form of
limited liability company, incorporated under the laws of
France. The Company’s registered office is located at 10, rue
Marcel-Dassault, in Vélizy-Villacoublay, France. The Dassault
Systèmes SA shares are listed in France on Euronext Paris.
These financial statements were established under the
responsibility of the Board of Directors on March 20, 2015.
As part of its program to simplify the organization of its legal
entities throughout the world, Dassault Systèmes SA carried
out three merger operations (transmissions universelles de
patrimoine) as per Article 1844-5 of the French Civil Code
during the year:
(cid:125) Exalead SA and SolidWorks Europe SARL, on April 1, 2014;
(cid:125) Apriso SAS, on October 1, 2014.
Dassault Systèmes SA used cash on hand to finance, via capital
contributions or loans, important acquisitions (Accelrys, RTT
and Quintiq) made by select subsidiaries during the year.
The General Meeting of Shareholders of May 26, 2014
decided to split the par value of the Dassault Systèmes share
in two. Consequently, the Board of Directors meeting held on
the same day decided to define July 17, 2014 as the effective
date of this split. Thus, for all former shares of €1 of nominal
value held as of July 17, 2014, shareholders received 2 new
shares of par value €0.50 each.
All per share data and information related to the number of
shares reflect the two-for-one stock split.
4
Note 2 Summary of Significant Accounting Policies
The financial year lasts for 12 months from January 1 through
December 31.
The annual financial statements for the fiscal year ended
December 31, 2014 have been prepared and are presented in
accordance with the French General Chart of Accounts 2014.
General accounting conventions have been applied in keeping
with the principle of prudence, the principle of continuity
of accounting methods from one year to the next, the
independence of financial years, and the assumption that the
business is a going concern. Assets and liabilities are initially
recorded at historical cost.
Significant accounting polices applied are as follows:
2.1 Revenue
Revenue recognition
Dassault Systèmes SA derives revenue from three primary
sources: (1) new software licenses, periodic licenses, maintenance
and other software revenue, which includes software license
updates, technical support and the development of additional
functionalities of standard products requested by clients; (2)
consulting and training services and other revenue; and (3)
royalties from distribution agreements signed primarily with the
Group’s subsidiaries.
Revenues are disclosed net of taxes collected from customers
and remitted to governmental authorities.
New Software License, Periodic License, Maintenance and
Other Software Revenue – New software license revenue
represents fees earned from granting customers licenses to
use Dassault Systèmes SA’s software. The license revenue
from software commercialized by Dassault Systèmes SA
consists of perpetual and periodic license sales of software
products. Software license revenue is recognized (to the
extent Dassault Systèmes SA has no remaining obligations to
perform) when: evidence of an arrangement exists, delivery
and acceptance have occurred, the amount of revenue and
associated costs can be measured reliably, and it is probable
that the economic benefits associated with the transaction
will flow to Dassault Systèmes SA. In instances when any of
the four criteria are not met, Dassault Systèmes SA defers
DASSAULT SYSTÈMES ANNUAL REPORT 2014 127
4 Financial statements
Parent Company Financial Statements
recognition of software license revenue until all criteria are
met. Revenue related to the licensing of software through
value-added resellers (VARs) is generally recognized when
evidence of a sale to an end-user customer is provided to the
Company, assuming all other revenue recognition criteria have
been met.
training services. Services generally do not require significant
modification or customization of software products and are
accounted for separately to the extent they are not essential
to the functionality of software products. Service revenues
derived from time and material contracts are recognized as
time is incurred.
Periodic licenses generally have a one-year term and the
corresponding fee is recognized ratably over the term of
the license.
Maintenance revenue represents periodic fees associated
with the sale of unspecified product updates on a when-
and-if-available basis and technical support. Maintenance
agreements are entered into in connection with the initial
software license purchase. Maintenance support may be
renewed by the customer at the conclusion of each term.
Revenue from maintenance is recognized on a straight-line
basis over the term of the maintenance agreement.
Other software revenue mainly relates to the development
of additional functionalities of standard products requested
by clients and is recognized as the development work
is performed.
Recurring fees for periodic license, maintenance and other
software revenue are reported within software revenue; see
Note 3 Revenue.
Revenue under multiple-element arrangements, which
typically include new software licenses and maintenance
agreements sold together, is allocated to each element in
the arrangement primarily using the residual method based
upon the fair value of the undelivered elements. Discounts, if
any, are applied to the delivered elements, usually software
licenses, under the residual method. For maintenance, fair
value is generally determined based upon the expected
renewal rate.
Services and Other Revenue – Services and other revenue
consists primarily of fees from consulting services
in
methodology for design, deployment and support, and
The useful life of property and equipment is presented below:
Service revenues derived from fixed price contracts are
generally recognized using a percentage of completion basis.
For customer support contracts, when no performance pattern
is discernible, revenue is recognized ratably over the term of
the contract, generally one year, on a straight-line basis.
2.2 Research and development expenses
Research costs are expensed as incurred. Since it is difficult
to demonstrate technological feasibility before a working
prototype has been completed, such costs are expensed.
Technological feasibility is generally demonstrated shortly
before the commercial release of software products. As a
consequence, costs incurred after technological feasibility
is established that could potentially be capitalized are
not material.
2.3
Intangible assets, property and equipment
Intangible assets, property and equipment are recognized at
cost, including ancillary expenses, when they are purchased,
at their production cost when they are produced internally,
and at their integration value when they are transferred.
resulting
Technical deficits
from merger operations
(transmissions universelles de patrimoine) are recorded as
goodwill. Technical deficits are generally not depreciable
items. However, the constituent components of the deficits
undergo impairment testing. Intangible assets are amortized
using the straight-line method over their expected useful
life (three to five years for software and five to ten years for
intellectual property).
Computer equipment
Fixtures and fittings
Office furniture
Transportation equipment
Depreciation period
2.5 to 5 years
Over the term of the lease
10 years
4 years
Depreciation, whether calculated using the straight-line or declining balance method, is calculated over the useful life of the asset.
128 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Parent Company Financial Statements
4
2.4 Non-current financial assets
2.8 Provisions for contingencies and losses
Investments in subsidiaries are initially valued at cost. Expenses
directly related to the acquisition of equity securities are
included in the acquisition cost of these securities. Loans and
advances to subsidiaries are valued at their net realizable value.
Provisions for contingencies and losses are recognized as
liabilities to cover probable outflows of resources resulting from
a present obligation. These provisions are estimated taking in
account the most probable hypothesis at the closing date.
Periodically and at a minimum at the annual closing period,
Dassault Systèmes SA reviews the net realizable value of
its investments and loans and advances to subsidiaries.
In particular, the net realizable value of securities takes
into account the amount of shareholders’ equity, long-
impairment
term profitability and strategic factors. An
loss is recognized if the net realizable value is less than the
carrying value.
2.5 Marketable securities
Marketable securities are initially recorded at cost and are
depreciated, when applicable, by referring to their quoted
price in an active market at year end.
2.6 Receivables and payables
Trade receivables are reported at their net receivable value and
trade payables are reported at their nominal value. For trade
receivables, an allowance is recorded when the net realizable
value is lower than the carrying value taking into account, in
particular, aging and an assessment of collectability.
2.7 Foreign currency transactions
Transactions in foreign currencies are recorded in euros in
the income statement at the monthly average exchange
rate. Receivables, payables and cash in foreign currencies are
converted to euros in the balance sheet at the closing exchange
rate or at the hedged rate when they are subject to exchange
rate hedging. The conversion differences are recorded on
the balance sheet in “Unrealized Exchange Losses/Gains”. In
the event of unrealized losses, a provision for contingencies
(exchange loss) is recorded. However, the reevaluation at
closing rate of the current accounts used for the Group cash
pooling and of the cash and cash equivalents (except for
marketable securities) generates an impact on the exchange
gains or losses recorded in financial income (expense), net.
This impact is shown in foreign exchange gains or losses, net.
2.9 Derivatives
Dassault Systèmes SA can manage exposure to foreign
currency and interest rates with regards to revenue and cost
generated by its ongoing and predictable activity.
Dassault Systèmes SA can also mitigate a given foreign
currency exposure linked to operations realized, for instance,
when it undertakes an acquisition in foreign currency. In order
to mitigate foreign currency exposure, Dassault Systèmes SA
uses only foreign exchange contracts or financial instruments
for which total maximum losses are known from the outset.
Interest rate derivatives:
Financial income and expense resulting from the use of
derivatives are recorded in the income statement in the same
manner as income and expense from the covered transactions
when the derivatives are considered to be hedging transactions
from an accounting perspective. If the instruments do not
qualify as hedging, they are accounted for as follows:
(cid:125) net unrealized losses are fully reserved;
(cid:125) net gains are recognized in the income statement upon
settlement.
Exchange rate derivatives:
Exchange rate derivatives are included in Dassault Systèmes
Group’s currency position. Unrealized
losses on these
derivatives are taken into account in determining the provision
for unrealized exchange losses.
2.10 Tax credit for encouraging competitiveness
and jobs (CICE)
recognizes the tax credit for
Dassault Systèmes SA
encouraging competitiveness and jobs (the Crédit d' impôt pour
la compétitivité et l' emploi, or CICE) as an offset to personnel
costs.
4
DASSAULT SYSTÈMES ANNUAL REPORT 2014 129
4 Financial statements
Parent Company Financial Statements
Notes on the Income Statement
Note 3 Revenue Breakdown
(in thousands)
New licenses revenue
Periodic licenses and maintenance revenue
Royalties
SOFTWARE REVENUE
Services
Other revenue
TOTAL REVENUE
The breakdown of software revenue by geographic area is as follows:
(in thousands)
Europe
Asia
Americas
TOTAL SOFTWARE REVENUE
Note 4 Personnel Costs
Personnel costs are comprised of the following:
(in thousands)
Salaries and wages
Social security costs
TOTAL PERSONNEL COSTS
Average Headcount by Category
Salaried employees by category
Managers
Supervisors and technicians
Employees
TOTAL AVERAGE HEADCOUNT (IN FULL TIME EQUIVALENTS)
12/31/2014
12/31/2013
€92,639
286,229
507,501
886,369
23,106
216,212
€88,648
271,648
509,754
870,050
25,679
168,830
€1,125,687
€1,064,559
12/31/2014
12/31/2013
€531,520
€493,745
228,404
126,445
249,638
126,667
€886,369
€870,050
12/31/2014
12/31/2013
€203,667
€180,114
99,949
86,641
€303,616
€266,755
12/31/2014
12/31/2013
2,47 8
94
17 5
2,748
2,269
85
187
2,541
The three major merger operations (transmissions universelles de patrimoine) carried out in 2014 increased the headcount of
Dassault Systèmes SA by 170 employees.
130 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Parent Company Financial Statements
4
Tax credit for encouraging competitiveness and jobs (CICE)
The tax credit for encouraging competitiveness and jobs (the Crédit d’impôt pour la compétitivité et l’emploi, or CICE) is based
on total compensation due for the current period. In 2014, an amount of €1.6 million of CICE was recognized (compared to
€1.1 million in 2013), and was allocated to funding working capital requirements.
Compensation of Executives
The total gross compensation paid to executives by Dassault Systèmes SA during 2014 was as follows:
(in thousands)
Salaries
Benefits
Directors’ fees *
TOTAL COMPENSATION OF EXECUTIVES
*
Compensation is based on payments made. 2014 directors’ fees represent €69,000 and will be paid in 2015.
Note 5 Financial Income and Expense, Net
Net financial income and expense is as follows:
(in thousands)
Interest income
Interest expense
INTEREST INCOME AND EXPENSE, NET
REVENUE FROM DISPOSALS OF INVESTMENT SECURITIES
NET FOREIGN EXCHANGE INCOME (EXPENSE), NET PROVISIONS FOR IMPAIRMENT
FINANCIAL INCOME AND EXPENSE, NET
12/31/2014
12/31/2013
€3,909
€3,740
21
57
17
80
€3,987
€3,837
4
12/31/2014
12/31/2013
€30,415
€121,625
(6,444)
23,971
19,972
(13,776)
€30,167
(6,328)
115,297
18,701
(4,400)
€129,598
Interest and related income is comprised primarily of dividends received from Group subsidiaries, as well as from interest income
from investments. Non recurring dividends were received in 2013.
Note 6 Exceptional Income/Loss
Exceptional loss for the year ended December 31, 2014
was €(22.8) million compared to a loss of €(21.1) million at
December 31, 2013. In 2014 Dassault Systèmes SA impaired
a merger loss related to the utilization of tax losses carried
forward coming from merger operations (transmissions
universelles de patrimoine). In 2013, the Company recognized
a net loss on the sale of previously held investments.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 131
4 Financial statements
Parent Company Financial Statements
Note 7
Income Tax
The tax group included 11 entities at the end of December 2014.
Under the tax integration agreement, it is agreed that the
income tax expense of tax-integrated companies will be the
same as it would have been if each subsidiary had not been a
member of the Group. Without the tax integration agreements,
the income tax expense of Dassault Systèmes SA, the head of
the tax group, would have been €48.5 million in 2014.
The breakdown of income tax between current income and exceptional income for the year ended December 31, 2014, is
as follows:
(in thousands)
Current income
Exceptional income
TOTAL
Income
before tax
Tax (expense)
credit
Income after
income tax
€286,763
€(81,011)
€205,752
(58,594)
35,847
(22,747)
€228,169
€(45,164)
€183,005
The effective income tax rate for the year ended December 31, 2014 was 19.8% (2013: 20.6%). This decrease in the effective rate
is explained in Note 6 Exceptional Income/Loss, as well as by the decrease in di vidends received in 2014.
Note 8 Performance Shares
Pursuant to an authorization granted by the Combined General
Meeting held on May 30, 2013, the Board of Directors held
on February 21, 2014 decided to grant 529,940 performance
certain employees and executives, and
shares
to
150,000 shares to the CEO as part of a plan of progressively
associating him with the Company’s capital (respectively
1,059,800 and 300,000 shares following the two-for-one
stock split effected on July 17, 2014).
132 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Parent Company Financial Statements
4
The main characteristics of the performance share plans outstanding at December 31, 2014 are shown in the table below:
Plan
2010-02
2010-03
2010-04
2010-05
2014-A
2014-B
Date of General Meeting
05/27/2010
05/27/2010
05/27/2010
05/27/2010
05/30/2013
05/30/2013
Date granted by the Board of Directors
09/29/2011
09/29/2011
09/07/2012
09/07/2012
02/21/2014
02/21/2014
Number of performance shares granted*
812,800 (1 )
-
1,078,460 (1 )
-
1,059,880
-
Number of shares granted to the Chief
Executive Officer as part of the plan
of progressively associating him
with the Company’s capital *
Vesting period (in years) (2 )
Performance conditions
Performance conditions fulfilled
at 12/31/2014
-
300,000
-
300,000
3 or 4 (3 )
2
3 or 4 (3 )
2
-
4
300,000
4
See Note (4 )
See Note (5 )
See Note (4 )
See Note (4 )
See Note (6 )
See Note (6 )
Yes
Yes
Yes
Yes
N/A
N/A
* Restated to reflect the two-for-one split of the Dassault Systèmes share carried out on July 17, 2014 (see Note 1 Description of Business and Key Events of the Year).
(1 ) Including 28,000 shares allocated to the Chief Executive Officer, subject to satisfaction of the additional performance conditions established for calculating his variable
compensation.
(2 ) The shares will be fully vested provided that the beneficiary is still in the Company’s employment on the vesting date.
(3 ) Three years in France or four years for certain employees on international assignment.
(4 ) Performance conditions based on actually realized non-IFRS diluted earnings per share of the Group compared to the upper limit of the non-IFRS diluted earnings per share
objective for three fiscal years (2011, 2012 and 2013 for the 2010-02 Shares and 2012, 2013 and 2014 for the 2010-04 Shares). The vesting of shares granted to the Chief
Executive Officer is also subject to a performance condition related to his variable compensation, which requires him to fulfill the performance criteria defined in advance by the
Board.
(5 ) Performance condition related to the variable compensation of the Chief Executive Officer, which requires him to fulfill the performance criteria defined in advance by the Board.
(6 ) The fulfillment of the performance condition will be measured according to two alternative criteria reflecting the change in the non-IFRS diluted earnings per share of the Group
or the change in the price of the Dassault Systèmes stock compared with the CAC 40 index for each of the three fiscal years from 2015 through 2017. The vesting of shares granted
to the Chief Executive Officer is also subject to a performance condition related to his variable compensation, which requires him to fulfill the performance criteria defined in
advance by the Board.
The expense related to personnel of subsidiaries of Dassault Systèmes SA will be recharged when the shares are definitively
attributed to beneficiaries. During the vesting period, Dassault Systèmes SA accrues only for the costs related to the performance
shares attributed to its own employees.
4
Note 9 Additional Information
Research and Development Expenses
Statutory Auditors’ Fees
In 2014, Dassault Systèmes SA recorded a total of €185.5 million
of research and development expenses.
The amount of Statutory Auditors’ fees recorded in the income
statement for the year is as follows:
(in thousands)
Certification of the individual and consolidated financial statements
Other services
TOTAL STATUTORY AUDITORS’ FEES
12/31/2014
12/31/2013
€1,293
561
€1,854
€1,261
709
€1,970
DASSAULT SYSTÈMES ANNUAL REPORT 2014 133
4 Financial statements
Parent Company Financial Statements
Notes to the Balance Sheet
Note 10 Intangible Assets
(in thousands)
Goodwill
Patents, licenses and trademarks
TOTAL GROSS VALUE
Goodwill
Patents, licenses and trademarks
TOTAL AMORTIZATION AND PROVISIONS
Goodwill
Patents, licenses and trademarks
TOTAL NET VALUE
12/31/2013 Additions 2014 Disposals 2014
12/31/2014
€123,426
€179,058
€–
€302,484
101,567
224,993
(2,280)
(64,925)
(67,205)
121,146
36,642
2,757
181,815
(17,947)
(9,136)
(27,083)
161,111
(6,379)
€157,788
€154,732
(2,090)
(2,090)
–
2,044
2,044
–
(46)
€(46)
102,234
404,718
(20,227)
(72,017)
(92,244)
282,257
30,217
€312,474
The increase in goodwill derives from merger operations (transmissions universelles de patrimoine) in 2014 (see Note 1 Description
of Business and Key Events of the Year).
Note 11 Property and Equipment
(in thousands)
Machinery and equipment
Fixtures and fittings
Office furniture and equipment
TOTAL GROSS VALUE
Machinery and equipment
Fixtures and fittings
Office furniture and equipment
TOTAL DEPRECIATION
Machinery and equipment
Fixtures and fittings
Office furniture and equipment
TOTAL NET VALUE
12/31/2013 Additions 2014 Disposals 2014
12/31/2014
€68,166
€10,628
€(10,490)
€68,304
24,194
14,531
106,891
(52,485)
(9,089)
(9,039)
2,732
1,956
15,316
(10,089)
(2,469)
(1,169)
(70,613)
(13,727)
15,681
15,105
5,492
539
263
787
(103)
(331)
(10,924)
10,247
97
325
10,669
(243)
(6)
(6)
26,823
16,156
111,283
(52,327)
(11,461)
(9,883)
(73,671)
15,977
15,362
6,273
€36,278
€1,589
€(255 )
€37,612
134 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Parent Company Financial Statements
4
Note 12 Non-current Financial Assets
(in thousands)
Investments in subsidiaries
Loans and advances to subsidiaries
Treasury Shares
TOTAL GROSS VALUE
Provision for impairment
TOTAL PROVISION FOR IMPAIRMENT
Investments in subsidiaries
Loans and advances to subsidiaries
Treasury Shares
TOTAL NET VALUE
12/31/2013 Additions 2014 Disposals 2014
12/31/2014
€1,552,318
€332,795
€(159,316)
€1,725,797
237,909
27,592
686,551
112,404
(408,266)
(62,293)
516,194
77,703
1,817,819
1,131,750
(629,875)
2,319,694
(109,437)
(109,437)
1,442,881
237,909
27,592
(14,000)
(14,000)
318,795
686,551
112,404
5,802
5,802
(153,514)
(408,266)
(62,293)
(117,635)
(117,635)
1,608,162
516,194
77,703
€1,708,382
€1,117,750
€(624,073)
€2,202,059
4
The increase in investments in subsidiaries mainly relates to
the recapitalization of Dassault Systemes Americas Corp.,
Dassault Systemes Deutschland GmbH, and Dassault Systèmes
International SAS related to the acquisitions of Accelrys,
RTT, and Quintiq, respectively. Moreover, the decrease in
investments in subsidiaries reflects the cancellation of the
securities of these companies, following merger operations
(transmission universelle de patrimoine) (see Note 1
Description of Business and Key Events of the Year).
Notes 13 Receivables
Receivables are as follows:
(in thousands)
TRADE ACCOUNTS RECEIVABLE, NET
Trade accounts receivable and related items
Allowance for trade accounts receivable
OTHER CURRENT ASSETS
Current accounts receivable(1)
Income tax receivable
Intercompany credit notes
Value added tax
Foreign currency hedges
Capital transactions
Other
TOTAL RECEIVABLES
(1) See Note 18 Elements Concerning Related Companies.
Less than
one year
Due dates
over one year
€116,453
138,723
(22,270)
171,539
83,321
69,595
84
13,168
7
531
4,833
–
–
–
3,932
–
–
–
–
3,932
–
–
12/31/2014
12/31/2013
€116,453
€102,446
138,723
(22,270)
175,471
83,321
69,595
84
13,168
3,939
531
4,833
119,225
(16,779)
140,734
73,979
20,253
12,066
11,963
10,579
7,781
4,113
€287,992
€3,932
€291,924
€243,180
The €19.5 million increase in trade accounts receivable results from an increase in billing to third-party customers in the fourth
quarter of 2014 compared with the same period of 2013.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 135
4 Financial statements
Parent Company Financial Statements
Note 14 Treasury
Marketable Securities
At December 31, 2014, marketable securities amounted
to €947.4 million compared with €1,612.8 million at
December 31, 2013. Marketable securities were denominated
primarily in euros.
The decrease in marketable securities is attributable to the
funding of acquisitions by Dassault Systèmes.
An amount of €946.4 million of marketable securities are held
in monetary investments.
Treasury Shares
Share repurchases are intended to cover obligations resulting from performance share grants.
TREASURY SHARES AS OF JANUARY 1, 2014
Transfer of shares
Repurchase of treasury shares (2)
TREASURY SHARES AS OF DECEMBER 31, 2014
Number of
shares
authorized and
issued (1)
2,191,260
(888,750)
1,359,880
2,662,390
Average price (1)
(in euros)
Total
(in thousands)
€35.66
€31.52
€43.57
€41.08
€78,140
(28,015)
59,257
€109,382
(1) Restated to reflect the two-for-one split of the Dassault Systèmes share carried out on July 17, 2014 (see Note 1 Description of Business and Key Events of the Year).
(2) The Combined General Meetings of Shareholders of May 26, 2011, June 7, 2012, May 30, 2013 and May 26, 2014 authorized the Board of Directors to implement a l share
repurchase program not to exceed 10% of Dassault Systèmes SA’s share capital. In addition, these programs specify that Dassault Systèmes SA may not purchase shares at a price
exceeding €75 per share and that the aggregate amount may not exceed €500 million.
Note 15 Shareholders’ Equity
Share Capital
Changes in share capital during the year ended December 31, 2014 were as follows:
SHARES AS OF JANUARY 1, 2014
Shares issued pursuant to exercise of share subscription options
Capital increase (1)
Capital reduction (2)
SHARES AS OF JULY 16, 2014
SHARES AS OF JULY 17, 2014(3)
Shares issued pursuant to exercise of share subscription options
SHARES AS OF DECEMBER 31, 2014
(1) See “Dividend rights” below.
(2) Capital reduction due to the cancellation of securities as decided by the Board of Directors held on May 21, 2014.
(3) Two-for-one split of the Dassault Systèmes share (see Note 1 Description of Business and Key Events of the Year).
Number of
shares
authorized and
issued
126,932,985
867,629
802,310
(741,175)
127,861,749
255,423,498
640,579
256,364,077
Par value
(in euros)
Capital
(in euros)
1
1
1
1
1
0.50
0.50
0.50
126,932,985
867,629
802,310
(741,175)
127,861,749
127,861,749
320,290
128,182,039
136 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Shareholder base
On December 31, the share capital of Dassault Systèmes SA was held by:
(as a %)
Public
Groupe Industriel Marcel Dassault
Charles Edelstenne and beneficiaries (1)
Bernard Charlès
Treasury shares
TOTAL
On December 31, the voting rights in Dassault Systèmes SA were held by:
(in % of exercisable voting rights) (2)
Groupe Industriel Marcel Dassault
Public
Charles Edelstenne and beneficiaries (1)
Bernard Charlès
TOTAL
Financial statements
Parent Company Financial Statements
4
2014
49.8
41.1
6.1
1.1
1.9
100
2014
55.7
34.7
8.3
1.3
100
2013
50.6
41.1
6.1
0.9
1.3
100
2013
55.8
34.9
8.3
1.0
100
4
(1) At December 31, 2014, Mr. Edelstenne held 3,946,266 shares with all ownership rights and 3,296 shares through two family companies which he manages, representing a total
of 1.54% of the capital and 2.09% of the exercisable voting rights, as well as 11,613,382 shares with “usage” rights (usufruit). For the usage rights with respect to these
11,613,382 shares, representing 6.18 % of the exercisable voting rights, Mr. Edelstenne can only exercise the right to vote on decisions of the General Meeting concerning the
allocation of profits; the holders of the bare property rights (nue-propriété) exercise the right to vote for other resolutions in compliance with Article 11 of the by-laws.
(2) The total number of exercisable voting rights in the table above is the net number of voting rights (which does not include shares for which voting rights are suspended), or the
number of votes which may be exercised in a General Meeting of Shareholders.
Stock Option Plans
A summary of stock option activity is as follows:
OUTSTANDING AS OF JANUARY 1,
Number of options granted
Exercised
Forfeited
OUTSTANDING AS OF DECEMBER 31,
Exercisable
2014
2013
Total of shares*
Average price* Total of shares* Average price*
7,094,974
624,450
(2,375,837)
(56,176)
5,287,411
4,677,561
€21.06
9,376,838
€20.98
45.50
21.32
29.22
€23.73
20.90
–
(2,190,064)
(91,800)
7,094,974
4,782,974
–
20.75
21.02
€21.06
19.87
* Restated to reflect the two-for-one split of the Dassault Systèmes share carried out on July 17, 2014 (see Note 1 Description of Business and Key Events of the Year).
A summary of the remaining contractual life and the exercise price of options outstanding as of December 31, 2014 is presented
below:
SOP plan
2008-02
2010-01
2008-01
2014-01
OUTSTANDING AS OF DECEMBER 31, 2014
Total of shares*
Remaining
life (years)
Average price*
2,093,242
1,725,288
859,031
609,850
5,287,411
2.91
3.40
0.73
7.41
3.23
€19.50
23.50
19.08
45.50
€23.73
* Restated to reflect the two-for-one split of the Dassault Systèmes share carried out on July 17, 2014 (see Note 1 Description of Business and Key Events of the Year).
DASSAULT SYSTÈMES ANNUAL REPORT 2014 137
4 Financial statements
Parent Company Financial Statements
Movements in Shareholders’ Equity
Movements in shareholders’ equity for the year ended December 31, 2014 were as follows:
(in thousands)
Share capital
Share and contribution premiums
Legal reserve
Retained earnings
Income (loss) for the fiscal year
Regulated provisions
12/31/2013
Appropriation of
2013 earnings
€126,933
697,563
12,510
1,550,675
263,441
12,702
€802
70,330
183
159,827
(263,441)
–
Effect of
exercising
options
€1,188
49,457
–
–
–
–
Net income for
2014 fiscal year
–
–
–
–
183,005
Other
12/31/2014
€(741)
€128,182
(61,551)
–
–
–
755,799
12,693
1,710,502
183,005
12,493
–
(209)
SHAREHOLDERS’ EQUITY
€2,663,824
€(32,299)
€50,645
€183,005
€(62,501)
€2,802,674
Dividend rights
The Combined General Meeting of Shareholders held on
May 26, 2014 approved a dividend of €103.4 million,
based on the existing shares as at February 28, 2014. The
General Meeting approved offering shareholders the option
to receive payment of their dividend in the form of new
Dassault Systèmes shares. As a result, 802,310 new ordinary
shares were created. The cash dividend was paid in the total
amount of €32.3 million.
Note 16 Provisions for Contingencies and Losses
Movements of provisions for contingencies and losses were as follows:
(in thousands)
Provisions for performance shares
Provisions for exchange losses
Provisions for post-employment benefits
Other provisions for contingencies and losses
Provisions for jubilee awards
TOTAL PROVISIONS
12/31/2013
€32,191
27,981
15,221
6,180
3,924
Additions
€26,743
20,427
2,931
3,225
930
Utilization
€(28,015)
(27,981)
–
Reversal of
unused amounts
–
–
–
(4,364)
(1,274)
–
–
12/31/2014
€30,919
20,427
18,152
3,767
4,854
€85,497
€54,256
€(60,360)
€(1,274)
€78,119
Changes in provisions for contingencies and losses impacted captions of the income statement as follows:
(in thousands)
Operating income
Financial income and expense, net
Exceptional income/(loss)
TOTAL
Additions
Utilization
€9,443
20,427
24,386
€(21,066)
(27,981)
(11,313)
€54,256
€(60,360)
Reversal of
unused amounts
€(105)
–
(1,169)
€(1,274)
Provisions for post-employment benefits
Dassault Systèmes SA’s commitment in terms of post-
employment benefits was evaluated using the future rights
pro-rata method.
This method, which is based on an actuarial valuation of rights,
takes into account rights acquired by employees on the date
of their retirement, computed on the basis of the employees’
seniority and annual salary at the time of retirement. These
rights are acquired and paid to the employee when he/
she retires as a fixed amount. Provisions are made for post-
employment benefits acquired by employees during their
138 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Parent Company Financial Statements
4
career on the basis of actuarial assumptions and calculations
made using the corridor approach.
The projected benefit obligation at December 31, 2014
was determined using the prospective method, based on
the following assumptions: retirement between 60 and
65 years of age, discount rate of 2.10%, average increase
in salaries of 2.8% and a 2.10% expected return on plan. In
1998, Dassault Systèmes SA took out an insurance policy
with Sogecap, a life insurance company affiliated with the
Société Générale, intended to cover the retirement payment
commitments. Pursuant to this policy, Dassault Systèmes SA
has invested a total of €8.3 million. The amount of the
obligation at December 31, 2014 remaining to be recognized
according to the corridor method over 19 years is €9.9 million.
Note 17 Financial Liabilities
Financial liabilities are as follows:
(in thousands)
Bank loans and borrowings
Mandatory employee profit-sharing scheme
Other financial liabilities
TOTAL FINANCIAL LIABILITIES
(in thousands)
Bank loans and borrowings
Mandatory employee profit-sharing scheme
Other financial liabilities
TOTAL FINANCIAL LIABILITIES
12/31/2014
12/31/2013
€351,888
€350,268
20,339
4,735
20,436
2,735
€376,962
€373,439
4
Gross amount Less than 1 year
1 to 5 years
€351,888
20,339
4,735
€1,888
3,776
14
€350,000
16,563
4,721
€376,962
€5,678
€371,284
Note 18 Elements Concerning Related Companies
(in thousands)
Loans receivable
Trade accounts receivable and related items
Current accounts receivable
Accounts payable and related items
Other operating liabilities
Current accounts with credit balances
Finance income: dividends collected and net interest received
12/31/2014
12/31/2013
€514,616
€236,577
30,581
83,322
2,231
–
453,637
30,384
26,536
73,979
3,898
17,105
525,973
121,491
The increase in loans receivable and the decrease in current accounts payable primarily reflects the financing of acquisitions by
Dassault Systèmes SA subsidiaries in 2014.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 139
4 Financial statements
Parent Company Financial Statements
Note 19 Trade Payables
Trade payables are as follows:
(in thousands)
ACCOUNTS PAYABLE AND RELATED ITEMS
Group trade payables
Third-party trade payables
TAX AND SOCIAL SECURITY PAYABLES
Mandatory and contractual profit-sharing
Accrued vacation
Other employee expenses
Value added tax and other taxes and duties
OTHER OPERATING LIABILITIES
Current accounts payable(1)
Other liabilities
TOTAL PAYABLES
(1) See Note 18 Elements Concerning Related Companies.
Less than 1 year
1 to 5 years
12/31/2014
12/31/2013
€69,606
2,231
67,375
110,023
18,735
36,826
44,970
9,492
459,860
453,637
6,223
–
–
–
8,961
8,961
–
–
–
–
–
–
€69,606
€66,157
2,231
67,375
3,898
62,259
118,984
110,218
27,696
36,826
44 ,970
9,492
459,860
453,637
6,223
26,762
34,493
40,027
8,936
547,999
525,973
22,026
€639,489
€8,961
€648,450
€724,374
In accordance with Articles L. 441-6 and D. 441-4 of the French Commercial Code related to information regarding payment due
dates, at December 31, 2014, the balance of Dassault Systèmes SA’s trade payables to its suppliers amounted to €19.3 million
(2013: €11.9 million). Due dates are as follows:
Due within 30 days
Due within 60 days
TOTAL
Note 20 Unearned Revenue
12/31/2014
12/31/2013
49.9%
51.1%
100%
34.9%
65.1%
100%
Unearned revenue is composed primarily of deferred software, maintenance and support revenue relating to periods subsequent
to year end. Unearned revenue amounted to €40.4 million compared to €35.4 million in 2013.
140 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Parent Company Financial Statements
4
Note 21 Financial Commitments
Derivatives
At December 31, 2014 and 2013, the fair value of instruments used to manage currency and interest rate exposure was as follows:
(in thousands)
Interest rate swaps in euros (1)
Interest rate swaps in Japanese yen (2)
Interest rate swaps in Japanese yen (2)
Forward exchange contract Japanese yen/euros – sale (3)
Cross currency swaps Canadian dollars/euros (4)
Cross currency swaps Australian dollars/euros (4)
Forward exchange contract Japanese yen/U.S. dollars – sale (2)
Forward exchange contract Japanese yen/U.S. dollars – sale (2)
Other instruments (5)
Year ended December 31
2014
Nominal
amount
Fair value
2013
Nominal
amount
€350,000
€(12,145)
€350,000
9,984
9,984
38,163
73,412
72,064
5,507
5,507
37,789
(15)
15
2,438
1,863
1,548
946
(946)
(297)
30,058
30,058
2,229
70,370
69,787
–
–
27,258
(143)
Fair value
€(809)
(84)
84
929
4,972
4,678
–
–
4
(1) Term loan facility obtained by Dassault Systèmes SA in June 2013.
(2) Dassault Systèmes SA has entered into hedging agreements for its subsidiaries.
(3) Instruments entered into by the Company to hedge the foreign currency exchange risk of forecasted sales in Japanese yen.
(4) Dassault Systèmes SA has concluded hedging contracts with regards to loans made to subsidiaries to finance acquisitions; these instruments are not designated as hedging
instruments.
(5) Derivatives not designated as hedging instruments.
The fair market values of derivative
determined
pricing models.
financial
institutions
by
instruments were
option
using
At the end of 2014, foreign exchange contracts have
maturity dates of less than 12 months and interest rate swap
agreements have a maturity of approximately five years. Cross
currency swaps have maturity dates of less than three years.
Increases and Reductions in Future Income
Tax Payable
Increases and reductions in future income tax payable have
been evaluated on the basis of the standard corporate tax rate,
plus extraordinary contributions when applicable.
(in thousands)
Nature of temporary differences
12/31/2014
12/31/2013
SHORT TERM (38.00% TAX RATE FOR 2013 AND 2014)
€43,030
€38,474
Provision for mandatory profit-sharing
Depreciation of receivables
Provisions for Contingencies and losses
Other
LONG TERM (34.43% TAX RATE)
Provision for post-employment benefits
TOTAL TEMPORARY DIFFERENCES
Net reduction of the future corporate tax debt
(38.00% tax rate)
(34.43% tax rate)
17,921
22,270
2,537
302
18,151
18,151
15,512
16,779
5,038
1,145
15,221
15,221
€61,181
€53,695
€16,351
€6,249
€14,620
€5,241
DASSAULT SYSTÈMES ANNUAL REPORT 2014 141
4 Financial statements
Parent Company Financial Statements
Note 22 Other Commitments and Contingencies
Leases
stood
commitments
On December 31, 2014,
at
€294.1 million for real estate and equipment rentals including:
(i) €273.1 million relating to the lease for the headquarters
in Vélizy-Villacoublay (compared with €270.2 million as of
December 31, 2013); and (ii) €10.9 million (compared with
€13.1 million as of December 31, 2013) related to the lease
of the “Terre Europa” site, next to the headquarters, effective
as from July 2011.
It is not possible to determine with certainty the outcome
of the dispute in these matters. However, in the opinion of
management, after consultation with legal and tax counsel,
the resolution of such litigation and proceedings should
not have a material effect on the financial statements of
Dassault Systèmes SA.
Individual right to training for employees
in France
In February 2013, Dassault Systèmes SA committed to lease
an additional 13,000 square meters of office space and to
enter into a new lease for its headquarters facilities for a
non-cancelable initial term of 10 years which will take effect
during the first quarter of 2017 when construction is expected
to be completed. Future minimum rental payments until the
end of the lease amount to approximately €272.8 million in
the aggregate and have been included in the paragraph above.
French law provides permanent employees in French entities
with the right to receive individual training of at least 20 hours
per year (Individual Training Rights). Individual Training Rights
can be accumulated over six years and the related costs are
expensed as incurred.
As of December 31, 2014, accumulated Individual Training
Rights amounted to 257,229 hours, including 254,421 hours
that have not yet been requested by the employees.
Litigation and other proceedings
Dassault Systèmes SA is involved in litigation and other
proceedings, such as civil, commercial and tax proceedings,
incidental to normal operations. Dassault Systèmes SA is subject
to ongoing tax audits and tax reassessments. A number of
theses reassessments, in particular those related to acquisition
financing, are being challenged by Dassault Systèmes SA
which is strongly confident in the technical merits of its
positions and will continue to defend them with the relevant
tax authorities. In this context, Dassault Systèmes SA made a
€22.2 million payment to the French tax authorities in 2014
but disputed it with the relevant authorities.
Note 23 Additional Information
Events after the reporting period
Identity of the Consolidating Company
None.
Dassault Systèmes SA’s business is included in the consolidated
financial statements of Groupe Industriel Marcel Dassault SAS,
whose registered office is located at 9, R ond-P oint des
Champs-Élysées – Marcel Dassault, 75008 Paris, France.
142 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Parent Company Financial Statements
4
Note 24 Information Relating to Subsidiaries and Shareholdings
(in thousands) (1)
Location of
Headquarters
Gross book
value of
shares
Net book
value of
shares
% of
interest
Share
capital and
share
premiums
Reserves
and
retained
earnings
Net profit
or loss Revenue
Dividend
rights
received
Loans and
advances
Guarantees
and
sureties
€788,462
€788,462
100 €1,522,359 €245,089 €423,802
–
–
242,977
242,977
10
154
439,658
16,961
152,653
14,913
–
–
226,354
213,801
100
10,601
14,764
850
181,610
–
111,400
Dassault Systemes
Corp. (2)
Waltham –
USA
Dassault Systemes
Simulia Corp.
Johnston –
USA
Dassault Systemes
Deutschland GmbH
Stuttgart –
Germany
Dassault Systèmes
International SAS
Vélizy-
Villacoublay –
France
Dassault Systèmes
Israel Ltd
Kfar
Saba – Israel
Dassault Systemes
K.K.
Tokyo – Japan
Dassault Systèmes
Canada Inc.
Montreal –
Canada
183,041
137,041
100
108,924
495
711
41
64,883
5,801
100
28,918
(22,344)
6,446
24,585
43,742
43,742
100
29,952
4,288
10,319
280,869
36,673
36,673
100
35,907
12,174
3,506
26,892
Dassault Systèmes
Provence SAS
Netvibes France
SAS
Dassault Systemes
UK Ltd
3DVIA SAS
Aix en
Provence –
France
32,248
32,248
100
32,394
177
16,577
38,323
Paris – France
31,277
31,277
100
577
(5,410)
(4,052)
1,153
Coventry – UK
Paris – France
26,456
13,461
26,456
13,461
100
100
28,572
873
4,173
(206)
1,089
49,241
(1,614)
1,773
Dassault Systemes
AB
Goteborg –
Sweden
Dassault Systemes
India Pvt Ltd
Gurgaon –
India
9,540
9,540
100
11
4,255
906
38,066
8,823
8,823
100
4,129
7,983
931
36,795
6,260
6,260
100
2,795
(1,487)
(1,419)
732
5,228
5,228
100
791
424
(490)
1,167
4
–
–
–
–
–
–(3)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
129,981
–
–
73,412
–
4,200
17,699
–
–
–
–
–
–
–
2,576
2,576
100
3,000
1,172
4,127
58,072
3,000
Lainate – Italy
1,949
1,949
100
20
202
(125)
30,198
–
1,294
1,294
Not communicated
750
553
553
Not communicated
1,416
1,213
–
€1,725,797 €1,608,162
€1,809,977 €705,407 €478,525 €922,170 €19,329 €338,655
(1) The earnings of foreign subsidiaries are presented in the locally applicable GAAP for the 2013 financial year and have been converted using the 2014 average annual exchange
rates for the relevant currencies. The shareholders’ equity of foreign subsidiaries have been converted using the closing rates in effect at year-end 2014.
(2) American holding company owning 100% of Dassault Systemes SolidWorks Corp., and Dassault Systemes Holding LLC, the latter itself holding 90% of Dassault Systemes
Simulia Corp. and 100% of Dassault Systemes Americas Corp., Dassault Systèmes Russia Corp. and Spatial Corp.
(3) As regards the Japanese subsidiary Dassault Systemes KK, Dassault Systèmes SA is the guarantor for up to 14.5 billion Japanese yen through July 31, 2015 for the benefit of the
Bank of Tokyo-Mitsubishi and Société Générale, for the credit line granted by these banks. Dassault Systèmes SA has not granted any other significant guarantees or endorsements
to its subsidiaries.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 143
Vélizy-
Villacoublay –
France
Rennes –
France
Vélizy-
Villacoublay –
France
Simpoe SAS
Archivideo SA
Dassault Data
Services SAS
Dassault Systemes
Italia Srl
Other French
subsidiaries
Other foreign
subsidiaries
TOTAL
4 Financial statements
Parent Company Financial Statements
4.2.4 Selected financial and other information for
Dassault Systèmes SA over the last five years
(in euros)
Share capital
Share Capital
2010
2011
2012
2013
2014
121,332,605
123,092,729
125,096,778
126,932,985
128,182,039
Number of shares authorized and issued(2)
121,332,605
123,092,729
125,096,778
126,932,985
256,364,077
Statement of income data
Revenue
Result before income tax, profit sharing, amortization
and provisions
Result before income tax, profit sharing, amortization
and provisions and reversals of provisions
Income tax
Regulated employee profit-sharing
Optional employee profit-sharing
Net income
Data per share
Result after income tax and profit sharing and before
amortization and provisions
Basic net income per share
Dividend per share (2)
Personnel
Average headcount
742,259,080
850,023,294
990,705,543 1,064,558,462 1,125,687,175
365,948,323
415,780,289
386,581,931
435,033,094
359,636,561
339,981,856
341,652,678
367,577,134
413,314,821
304,131,981
33,005,838
46,812,886
52,457,635
68,216,039
45,164,304
11,058,164
13,192,985
16,266,653
15,512,132
17,921,044
10,501,560
14,165,501
13,601,995
18,421,890
17,921,044
219,126,831
264,795,422
254,846,867
263,440,594
183,005,154
2.35
1.81
0.54
2.17
2.15
0.70
2.28
2.04
0.80
2.45
2.08
0.83
0.87
0. 71
0.43 (1)
2,022
2,141
2,372
2,541
2,748
Personnel costs paid during the year
120,640,263
140,056,445
164,250,610
180,114,271
203,666,853
Social security contributions paid during the year
69,681,295
70,506,943
88,239,898
86,640,481
99,949,422
(1) To be proposed for approval at the General Meeting scheduled for May 28, 2015.
(2) Historical data prior to 2014 does not reflect the two-for-one stock split effected in July 2014.
144 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Parent Company Financial Statements
4
4.2.5 Report of the Statutory Auditors on the Parent Company
Financial Statements
This is a free translation into English of the Statutory Auditors’ report on the financial statements issued in French and it is
provided solely for the convenience of English-speaking users.
The Statutory Auditors’ report includes information specifically required by French law in such reports, whether modified or not.
This information is presented below the audit opinion on the financial statements and includes an explanatory paragraph discussing
the auditors’ assessments of certain significant accounting and auditing matters. These assessments were considered for the
purpose of issuing an audit opinion on the financial statements taken as a whole and not to provide separate assurance on
individual account balances, transactions or disclosures.
This report also includes information relating to the specific verification of information given in the management report and in the
documents addressed to the shareholders.
This report should be read in conjunction with and construed in accordance with French law and professional auditing standards
applicable in France.
To the Shareholders,
In compliance with the assignment entrusted to us by your Shareholders’ Meetings, we hereby report to you, for the year ended
December 31, 2014, on:
4
(cid:125) the audit of the accompanying financial statements of Dassault Systèmes;
(cid:125) the justification of our assessments;
(cid:125) the specific verifications and information required by law.
These financial statements have been approved by the Board of Directors. Our role is to express an opinion on these financial
statements based on our audit.
I. Opinio n on the financial statements
We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An
audit involves performing procedures, using sampling techniques or other methods of selection, to obtain audit evidence about the
amounts and disclosures in the financial statements. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made, as well as the overall presentation of the financial statements. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of
the Company as at December 31, 2014 and of the results of its operations for the year then ended in accordance with French
accounting principles.
II. Justi fication of our assessments
In accordance with the requirements of Article L. 823-9 of the French Commercial Code (Code de commerce) relating to the
justification of our assessments, we bring to your attention the following matters:
(cid:125) Note 2.1 to the financial statements sets out the accounting principles and methods used to account for revenue including
firstly new software licenses along with the related maintenance, and secondly services and other revenue. We verified the
appropriateness of the retained accounting principles and methods, their application and the information disclosed in the notes;
(cid:125) Note 2.3 to the financial statements summarizes the methods of recognition and valuation of intangible assets. We verified
that the values in use of the business assets (fonds de commerce) were consistent with their carrying value;
(cid:125) Note 2.4 to the financial statements summarizes the methods of recognition and valuation of financial fixed assets. We verified
that the values in use of the long-term equity interests were consistent with their carrying values.
These assessments were made as part of our audit of the financial statements taken as a whole, and therefore contributed to the
opinion we formed which is expressed in the first part of this report.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 145
4 Financial statements
Parent Company Financial Statements
III. Spec ific verifications and information
We have a lso performed, in accordance with professional standards applicable in France, the specific verifications required by
French law.
We have n o matters to report as to the fair presentation and the consistency with the financial statements of the information
given in the management report of the Board of Directors and in the documents addressed to shareholders with respect to the
financial position and the financial statements.
Concerning the information given in accordance with the requirements of Article L. 225-102-1 of the French Commercial Code
(Code de commerce) relating to remunerations and benefits received by the directors and any other commitments made in their
favour, we have verified its consistency with the financial statements, or with the underlying information used to prepare these
financial statements and, where applicable, with the information obtained by your Company from companies controlling your
Company or controlled by it. Based on this work, we attest the accuracy and fair presentation of this information.
In accord ance with French law, we have verified that the required information concerning the purchase of investments and
controlling interests and the identity of the shareholders and holders of voting rights has been properly disclosed in the
management report.
Neuilly-sur-Seine and Paris-La Défense, March 23, 2015
The Statutory Auditors
PRICEWATERHOUSECOOPERS AUDIT
French original signed by:
Pierre Marty
ERNST & YOUNG ET AUTRES
French original signed by:
Jean-François Ginies
146 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Parent Company Financial Statements
4
4.2.6 Special report of the Statutory Auditors on Regulated
Agreements and Commitments
This is a free translation into English of a report issued in French and it is provided solely for the convenience of English speaking
users. This report should be read in conjunction with, and construed in accordance with, French law and professional standards
applicable in France.
To the Shareholders,
In our capacity as Statutory Auditors of your Company, we hereby report on certain related party agreements and commitments.
We are required to inform you, on the basis of the information provided to us, of the terms and conditions of those agreements
and commitments indicated to us, or that we may have identified in the performance of our engagement. We are not required to
comment as to whether they are beneficial or appropriate or to ascertain the existence of any such agreements and commitments.
It is your responsibility, in accordance with Article R. 225-31 of the French Commercial Code (Code de commerce), to evaluate the
benefits resulting from these agreements and commitments prior to their approval.
In addition, we are required, where applicable, to inform you in accordance with Article R. 225-31 of the French Commercial Code
(Code de commerce) concerning the implementation, during the last financial year, of the agreements and commitments already
approved by the General Meeting of Shareholders.
We performed those procedures which we considered necessary to comply with professional guidance issued by the national
auditing body (Compagnie N ationale des Commissaires aux C omptes) relating to this type of engagement. These procedures
consisted in verifying that the information provided to us is consistent with the documentation from which it has been extracted.
4
Agreements and commitments submitted for approval by the General Meeting of Shareholders
In accordance with article L.225-40 of the French Commercial Code (Code de commerce), we have been advised of certain related
party agreements and commitments which received prior authorization from your Board of Directors.
With Mr Bernard Charlès, Directeur Général
Nature and purpose
Indemnity in the event of the removal of Mr Bernard Charlès from corporate office
Conditions
At its meeting on May 27 , 2014 , on the occasion of the renewal of Mr Bernard Charlès’ term of office as Directeur Général, the
Board of Directors authorized, upon the proposal of the Remuneration and Selection Committee, the renewal of the agreement
granting Mr Bernard Charlès a compensation in case of the termination of his functions as Directeur Général according to the
terms adopted by the Board of Directors at its meetings on May 27, 2010, March 28, 2008 and March 27, 2009.
At its meeting on May 26 , 2014 , the Board of Directors decided to make no change to the conditions, as defined by the Board
of Directors at its meeting on March 27, 2009, in which this compensation would be due in view of the recommendations of
the Remuneration and Selection Committee and in accordance with the recommendations integrated into the AFEP/MEDEF
Consolidated Corporate Governance Code (Code de gouvernement d’entreprise consolidé) of December 2008.
The amount of the indemnity due would be equivalent to a maximum of two years of remuneration of the Directeur Général and
would depend on meeting performance targets established for the calculation of his variable remuneration.
The amount paid would be calculated as a prorated percentage of the variable remuneration paid during the three years prior to
the departure in relation to the target variable remuneration for these same years.
Thus, the amount due would be calculated according to the following formula:
(cid:125) total gross remuneration (including variable remuneration but excluding benefits in kind and directors’ fees) due in respect of
his corporate office for the two years ended prior to the date of departure;
(cid:125) multiplied by the figure resulting from the division i) of the amount of the variable remuneration paid to the Directeur
Général during the three years ended prior to the date of the departure (numerator), by ii) the amount of the target variable
remuneration decided for each of these same years by the Board of Directors according to the achievement of the targets fixed
for the Company (denominator).
DASSAULT SYSTÈMES ANNUAL REPORT 2014 147
4 Financial statements
Parent Company Financial Statements
The indemnity may only be paid in the event of a change of control or strategy duly established by the Board of Directors that
results in a forced departure within the following twelve months. It could also be paid in a scenario of a forced departure without
being related to poor results of the Company or to mismanagement by the Directeur Général; the Board of Directors can then
decide to grant all or part of the termination compensation.
The indemnity will not be due in a situation where the Directeur Général leaves the Company on his own initiative to take up a
new position, or changes position within the Group, or if he is able to claim a pension within a short time period.
Besides, in the event of exceptional events that could seriously damage the group's image or income and have a significant
negative impact on the stock market share price of your Company, according to the assessment of the Board of Directors, or in
the event of misconduct independent of his functions and incompatible with the normal performance of his office as Directeur
Général, the Board of Directors may establish that the indemnity will not be due.
Agreements and commitments already approved by the General Meeting of Shareholders
In accordance with Article R. 225-30 of the French Commercial Code (Code de commerce), we have been advised that the
implementation of the following agreements and commitments, which were approved in prior years, continued during the
year.
In addition, we have been advised that the following agreements and commitments which were approved by the General Meeting
of Shareholders in prior years were not implemented during the year.
With the Board members of your Company, in connection with the insurance policy “Civil liability
of the directors and the corporate officers” signed with the company Insurance Allianz
a. Nature and purpose
Advance to the Board members of their expenses of possible legal defense instituted against them in the exercise of their mandate.
Conditions
In its meeting on July 24, 1996, the Board of Directors authorized the decision to have your Company advance their expenses
to a legal and compensations that the Board members might have if their personal civil liability would be questioned, in case
the insurance policy signed with the company CHARTIS Insurance (Allianz), would not cover these advances and financial
consequences.
b. Nature and purpose
Payment of the possible legal defense expenses of Board members taking place in the United Sates.
Conditions
In its meeting on September 23, 2003, the Board of Directors authorized the decision to have your Company pay the fees and
travel expenses that Board members of the Company and of its subsidiaries might have to meet to prepare their personal defense
before a civil, criminal or administrative jurisdiction of the United States if this defense were to be exercised within the scope of
an inquiry or investigations being carried out against your Company.
Payment of these expenses is ensured on the three-part condition that the Board members and senior executives concerned are
assisted by lawyers selected by the Company, that the Company remains i n control of its strategic choices in terms of procedure
and methods of defense and that the expenses incurred be reasonable.
Neuilly-sur-Seine and Paris-La Défense, March 23, 2015
The Statutory Auditors
PRICEWATERHOUSECOOPERS AUDIT
French original signed by:
Pierre Marty
ERNST & YOUNG ET AUTRES
French original signed by:
Jean-François Ginies
148 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Financial statements
Legal and Arbitration Proceedings
4
4.3 Legal and Arbitration Proceedings
In the ordinary course of business, the Company is involved
from time to time in litigation, tax audits or regulatory
inquiries. The Company is subject to ongoing tax audits
and tax reassessments in jurisdictions in which it has or
had operations. A number of these reassessments have
been contested and the Company is under discussion with
the relevant tax authorities. To the Company’s knowledge,
there is no outstanding, suspended or pending government
proceeding, litigation or arbitration, which has had during the
last twelve months preceding the publication of this 2014
Annual Report (Document de référence), or is likely to have,
a significant impact on the Company’s financial position or
results of operations.
For information purposes only, the Company notes that two
class action lawsuits were filed and consolidated in the Court
of Chancery in Delaware in February 2014, pursuant to the
tender offer made by Dassault Systèmes to acquire Accelrys,
a NASDAQ-listed U.S. company. In addition to claiming false
disclosure in connection with this acquisition, the lawsuits
alleged that the directors of Accelrys breached their fiduciary
duties to Accelrys’ stockholders in connection with this
acquisition and that the Company aided and abetted Accelrys’
directors in such breach. The lawsuits sought equitable
relief, including injunctions to prevent consummation of the
acquisition, damages and recovery of costs and attorneys’
and experts’ fees, among other remedies. The acquisition of
Accelrys was completed on April 29, 2014. On January 7,
2015, the Court entered an order approving the voluntary
dismissal without prejudice of all claims filed by the plaintiffs
in the two class action lawsuits. No compensation in any form
was paid or promised by the Company or its subsidiaries to
plaintiffs or plaintiffs’ counsel as part of the dismissal of the
lawsuits.
4
DASSAULT SYSTÈMES ANNUAL REPORT 2014 149
4 Financial statements
150 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
5
CORPORATE
GOVERNANCE
5.1 Report of the Chairman
on Corporate Governance
and Internal Control
5.2 Report of the Statutory Auditors
on Corporate Governance
and Internal Control
171
152
CONTENTS
5.1.1 Composition and Practices of the Board of Directors 152
5.1.2 The Executive Committee
5.1.3 Declarations Regarding the Administrative Bodies
and Senior Management
5.1.4 Principles Established by the Board of Directors
pertaining to Compensation of the Company’s
Executive Officers and directors
5.1.5 Application of the AFEP-MEDEF Code
162
163
163
166
5.1.6 Internal Control Procedures and Risk Management 167
5.1.7 Other information required by Article L. 225-37
of the French Commercial Code
170
5.3 Summary of the Compensation
and Benefits Due to Directors
172
5.3.1 Compensation of the Company’s Directors
(mandataires sociaux)
172
5.3.2 Interests of Executive Management
and Employees in the Company’s Share Capital
176
5.4 Transactions in the Company’s
Shares by the Management
of the Company
5.5 Statutory Auditors
181
186
DASSAULT SYSTÈMES ANNUAL REPORT 2014 151
5 Corporate governance
Report of the Chairman on Corporate Governance and Internal Control
5.1 Report of the Chairman on Corporate Governance
and Internal Control
Report of the Chairman of the Board of Directors
to the Combined General Meeting of May 28, 2015
Systèmes. It was reviewed by the Audit Committee and approved
by the Board of Directors at its meeting on March 20, 2015.
To the Shareholders of Dassault Systèmes,
The purpose of this report is to describe the composition
and practices of the Board of Directors of Dassault Systèmes
SA, the application thereto of the principle of balanced
representation of men and women, and the internal control
and risk management procedures established by the Company.
This report was drawn up in accordance with the French
Commercial Code and the regulations of the French Financial
Markets Authority (AMF), based on work carried out by the
finance, legal and internal audit departments of Dassault
Since its IPO (1996), Dassault Systèmes has sought to
implement the best international standards of corporate
governance. Dassault Systèmes currently adheres to most of
the recommendations of the AFEP-MEDEF Code (available
on the MEDEF website: www.medef.fr) and summarizes in
a table the reasons why it does not apply certain of these
recommendations (see paragraph 5.1.5 “Application of the
AFEP-MEDEF Code”).
5.1.1 Composition and Practices of the Board of Directors
5.1.1.1
Composition of the Board of Directors
The Board of Directors of Dassault Systèmes SA has nine
members, who are elected for a term of office of four years:
(cid:125) Charles Edelstenne (Chairman);
(cid:125) Bernard Charlès;
(cid:125) Jean-Pierre Chahid-Nouraï;
(cid:125) Nicole Dassault;
(cid:125) Serge Dassault (until his resignation on May 27, 2014);
(cid:125) Arnoud De Meyer;
(cid:125) Odile Desforges;
(cid:125) Marie-Hélène Habert (since July 23, 2014);
(cid:125) Toshiko Mori;
(cid:125) Thibault de Tersant.
With regard to the composition of its Board of Directors,
Dassault Systèmes SA pays particular attention
to
independence, diversity of background and the representation
of women, especially since a number of terms of office will
expire in 2015.
At present, 44% of the directors of Dassault Systèmes SA
are independent: Odile Desforges, Toshiko Mori, Jean-Pierre
Chahid-Nouraï and Arnoud De Meyer. This proportion exceeds
the recommendation of the AFEP-MEDEF Code for controlled
companies.
Dassault Systèmes SA has incorporated the definition of
independence contained in the AFEP-MEDEF Code into
the internal regulation of the Board of Directors, whereby a
director is independent when he or she has no relationship
whatsoever with Dassault Systèmes SA, the Group, the
Company or its management which might compromise his/
her free judgment.
At its meeting on March 20, 2015, the Board of Directors
reviewed – as it does each year – the independence criteria
recommended by the AFEP-MEDEF Code, particularly with
regard to the absence of a business relationship. As none of
the directors have a business relationship with the Group, the
Board of Directors did not have to express an opinion on the
materiality of any such relationship. The Board’s decisions are
based on recommendations provided by the Compensation
and Nomination Committee, after examining a questionnaire
completed by the relevant directors .
Dassault Systèmes SA is also keen to ensure that the Board
has a significant number of women members. As 44% of its
directors are women, Dassault Systèmes SA currently exceeds
the thresholds enshrined in law and recommended by the
AFEP-MEDEF Code.
152 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Corporate governance
Report of the Chairman on Corporate Governance and Internal Control
5
The Board of Directors does not have a member nominated by
the employees, as Dassault Systèmes does not fall within the
scope of the legal provisions in this area.
However, the Board does have an international dimension,
with a Belgian and a Japanese director accounting for 22% of
the members.
The average age of the directors was 65 at the date of this
Annual Report (Document de référence).
The above information is summarized in the table below.
COMPOSITION OF THE BOARD OF DIRECTORS OF DASSAULT SYSTÈMES SA
Term expires
Changes in 2014
Contribution to the
diversity of the Board’s
composition
Director
Charles Edelstenne
Bernard Charlès
Thibault de Tersant
Jean-Pierre Chahid-Nouraï (1)
Nicole Dassault (1)
Serge Dassault
Arnoud De Meyer (1)
Odile Desforges
Marie-Hélène Habert
Toshiko Mori (1)
Independence
X
X
X
X
Start of first
term of office
04/08/1993
04/08/1993
04/08/1993
04/15/2005
05/26/2011
06/07/2012
2018
2018
2018
2015
2015
2016
Re-appointment
Re-appointment
Re-appointment
Resignation (2)
04/15/2005
2015
05/30/2013
2017
07/23/2014
2016
Appointment (3)
05/26/2011
2015
5
Enhanced female
representation
Enhanced
international
representation
Enhanced female
representation
Enhanced female
representation
Enhanced female and
international
representation
(1) The renewal of the terms of office of these directors is to be proposed to the General Meeting of Shareholders of May 28, 2015.
(2) On May 27, 2014.
(3) Co-opted on July 23, 2014 to replace Serge Dassault, until the latter’s term expires. The ratification of her appointment is to be proposed to the General Meeting of May 28, 2015
(see paragraph 7.1 “Presentation of the Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015”).
DASSAULT SYSTÈMES ANNUAL REPORT 2014 153
5 Corporate governance
Report of the Chairman on Corporate Governance and Internal Control
The roles and duties performed by the Dassault Systèmes SA corporate officers in 2014 are indicated in the table below.
CHARLES EDELSTENNE – CHAIRMAN OF THE BOARD
Biography: Charles Edelstenne qualified as a Chartered
Accountant. He has spent his whole career with Dassault Aviation,
where he started working in 1960 as Head of the financial
studies department. In 1975 he became General Secretary then
Vice-Chairman responsible for economic and financial affairs in
1986. From 2000 to 2013, he was Dassault Aviation Chairman-
Chief Executive Officer. In January 2013, Charles Edelstenne was
appointed Chief Executive Officer of Groupe Industriel Marcel
Dassault. He was founder, Manager then President and Chief
Executive Officer of Dassault Systèmes and is currently Chairman
of its Board of Directors.
End of current term: General Meeting called to approve the financial
statements for the financial year ending December 31, 2017.
Date of first appointment: 04/08/1993
Dassault Systèmes shares owned at December 31, 2014:
15,562,944 (including a majority of beneficial ownership shares).
Age: 77
Nationality: French
Professional address: Groupe Industriel Marcel Dassault –
9 Rond-point des Champs Élysées – Marcel Dassault, 75008 Paris
– France
Other current positions and Directorships:
Inside Dassault Group, in France: Chief Executive Officer and
member of the Supervisory Board of Groupe Industriel Marcel
Dassault SAS (GIMD) (1), Honorary Chairman and Director of
Dassault Aviation SA (listed company, subsidiary of GIMD),
Director of Sogitec Industries SA,
Inside Dassault Group, outside France: Director of SABCA (listed
company, subsidiary of GIMD) (Belgium), Director of Dassault
Falcon Jet Corporation (United States)
Outside Dassault Group: Director of Thales and Carrefour (listed
companies), Honorary Chairman of Gifas (2), Manager of the
partnerships Arie, Arie 2, Nili and Nili 2
Other positions expired during the past five years:
Chairman of Gifas and Cidef (3)
Chairman and CEO of Dassault Aviation SA (listed company,
subsidiary of GIMD), Chairman of the Board of Dassault Falcon
Jet Corporation (until January 8, 2013) and Chairman of Dassault
International, Inc. (until April 29, 2013)
(1) GIMD is the main shareholder of Dassault Systèmes SA. (See paragraph 6.3.2 “Controlling Shareholder”).
(2) Groupement des Industries Françaises Aéronautiques et Spatiales.
(3) Conseil des Industries de Défense Françaises.
154 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Corporate governance
Report of the Chairman on Corporate Governance and Internal Control
5
BERNARD CHARLÈS – PRESIDENT AND CHIEF EXECUTIVE OFFICER
Biography: Bernard Charlès has been Chief Executive Officer
(Directeur Général) of Dassault Systèmes since 2002 when
Mr Edelstenne became solely the Chairman of the Company’s
Board. Since 1995, Mr Charlès has had executive functions which
he shared with Mr Edelstenne. Prior to holding this position,
Mr Charlès served as Director of the New Technology, Research
and Development and Strategy department from 1986 to 1988
and as President of Strategy, Research & Development from 1988
to 1995.
End of current term: General Meeting called to approve the
financial statements for the financial year ending December 31,
2017.
Date of first appointment: 04/08/1993
Dassault Systèmes shares owned at December 31, 2014:
2,751,624
Age: 57
Nationality: French
Professional address: Dassault Systèmes – 10 rue Marcel
Dassault, 78140 Vélizy-Villacoublay – France
Principal responsibility: President and Chief Executive Officer of
Dassault Systèmes SA
Other current positions and Directorships (all inside the Group,
outside France):
Chairman of the Board of Directors of Dassault Systemes Corp.,
Dassault Systemes SolidWorks Corp., Dassault Systemes Simulia
Corp., Biovia Corp. (United States), and Dassault Systemes Canada
Software Inc. doing business as Dassault Systemes Geovia Inc.
(Canada)
Other positions expired during the past five years (all inside the
Group, outside France):
Chairman of the Board of Directors of Dassault Systemes Delmia
Corp., Dassault Systemes Enovia Corp. and Chairman of the
Supervisory Board of RealTime Technology AG (Germany)
5
THIBAULT DE TERSANT – SENIOR EXECUTIVE VICE-PRESIDENT AND CHIEF FINANCIAL OFFICER
Biography: Thibault de Tersant has been Senior Executive Vice-
President and Chief Financial Officer of Dassault Systèmes since
2003. He joined Dassault Systèmes in 1988 as Executive Vice-
President and Chief Financial Officer. Prior to joining Dassault
Systèmes, Mr de Tersant served as a finance executive at Dassault
International. Mr de Tersant is also a member of the Board of
Directors of the DFCG (the French National Association of Chief
Financial Officers and Financial Controllers) and Temenos, a listed
Swiss company specialized in software solutions for the banking
industry.
End of current term: General Meeting called to approve the
financial statements for the financial year ending December 31,
2017.
Date of first appointment: 04/08/1993
Dassault Systèmes shares owned at December 31, 2014: 81,730
Age: 57
Nationality: French
Professional address: Dassault Systèmes – 10 rue Marcel
Dassault, 78140 Vélizy-Villacoublay – France
Main position: Senior Executive Vice-President and Chief
Financial Officer
Other current positions and Directorships:
Inside Dassault Systèmes Group, in France: President of Dassault
Systèmes International SAS
Inside Dassault Systèmes Group, outside France: Chairman
of the Board of Directors of Spatial Corp., Director of Dassault
Systèmes Corp., Dassault Systemes SolidWorks Corp., Dassault
Systemes Simulia Corp. (United States)
Outside Dassault Systèmes Group: Director of Temenos (listed
company) (Switzerland)
Other positions expired during the past five years:
Manager of Elsys, SPRL, Director of Dassault Systemes Delmia
Corp., Icem Ltd and of Dassault Systemes Enovia Corp. (United
States)
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JEAN-PIERRE CHAHID-NOURAÏ – INDEPENDENT DIRECTOR
Chairman and member of the Audit Committee
Chairman and member of the Compensation and Nomination
Committee
is an
Jean-Pierre Chahid-Nouraï
Biography:
independent
consultant. He was a Managing Director (Administrateur Délégué)
of Finanval Conseil from 1992 to 2007. Former member of the
Michelin management and Financial Manager, Mr Chahid-Nouraï
was also an investment banker at MM. Lazard Frères et Cie,
Banque Veuve Morin-Pons, Financière
Indosuez and S.G.
Warburg, as well as a consultant with McKinsey & Co. He has
also contemporaneously taught finance at ESSEC, the Centre de
Formation à l'Analyse Financière, INSEAD and CEDEP (Centre
Européen d'Éducation Permanente).
Age: 76
Nationality: French
Professional address: 56 rue de Boulainvilliers, 75016 Paris –
France
Main position: Director
End of current term: General Meeting called to approve the
financial statements for the financial year ended December 31,
2014.
Other current positions and Directorships:
Director of the Fondation Stanislas pour l’Éducation
Date of first appointment: 04/15/2005
Dassault Systèmes shares owned at December 31, 2014: 2,046
NICOLE DASSAULT – DIRECTOR
Age: 84
Nationality: French
Professional address: Groupe Industriel Marcel Dassault –
9 Rond-point des Champs Élysées – Marcel Dassault, 75008 Paris
– France
Main position: Member of the Supervisory Board (Conseil de
surveillance) of GIMD
Other current positions and Directorships:
Inside Dassault Group: Vice-Chairman and member of the
Supervisory Board (Conseil de surveillance) of Immobilière
Dassault SA, Chief Executive Officer (Directeur Général Délégué)
of Rond-Point Immobilier SAS, Director of Dassault Aviation
(a listed company), Dassault Medias SA, Groupe Figaro SAS
and Artcurial SA and founding member of the Serge Dassault
Foundation.
Outside Dassault Group: Director of Société des Amis du Louvre
and Société des Amis du Musée d’Orsay.
End of current term: General Meeting called to approve the
financial statements for the financial year ended December 31,
2014.
Date of first appointment: 05/26/2011
Dassault Systèmes shares owned at December 31, 2014: 0(1)
(1) Nicole Dassault is a shareholder of GIMD.
156 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
SERGE DASSAULT – DIRECTOR(1)
End of current term: General Meeting called to approve the
financial statements for the financial year ending December 31,
2015.
Date of first appointment: 06/07/2012
Dassault Systèmes shares owned at December 31, 2014: 196(2)
(1) Resigned on May 27, 2014.
(2) Serge Dassault is a shareholder of GIMD.
ARNOUD DE MEYER – INDEPENDENT DIRECTOR
Chairman of the Scientific Committee
Member of the Compensation and Nomination Committee
Biography: Arnoud De Meyer is President of the Singapore
Management University. Mr De Meyer is a specialist in the
management of innovation and has published numerous articles
and books on this subject. He was previously Director of Judge
Business School (University of Cambridge, U.K.) and Professor of
Technology Management at INSEAD and Deputy Dean of INSEAD
in France in charge of Administration and External Relations. He
has also taught at Waseda University and Keio Business School in
Japan and created the INSEAD Campus in Singapore.
End of current term: General Meeting called to approve the
financial statements for the financial year ended December 31,
2014.
Date of first appointment: 04/15/2005
Dassault Systèmes shares owned at December 31, 2014: 1,152
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Age: 89
Nationality: French
Professional address: Groupe Industriel Marcel Dassault – 9 Rond-
point des Champs Élysées – Marcel Dassault, 75008 Paris – France
Main position: President and member of the Supervisory Board
of GIMD
Other current position and Directorships:
Inside Dassault Group, in France: Honorary Chairman (Président
d'honneur) and Director (Administrateur) of Dassault Aviation
(a
listed company), President of GIFAS (Groupement des
Industries Françaises Aéronautiques et Spatiales), Chairman of the
Board and Chief Executive Officer (Président-Directeur Général)
of Dassault Media SA, Chairman and Director of Groupe Figaro
SAS, Société du Figaro SAS, Rond-Point Immobilier SAS, Rond-
Point Holding SAS, Chief Executive Officer (Directeur Général) of
Château Dassault SAS, member of the Strategic Committee of
Dassault Développement SAS, Manager (Gérant) of Société Civile
Immobilière de Maison Rouge, Rond-Point Investissement SARL
and SCI des Hautes Bruyères.
Inside Dassault Group, outside France: Director (Administrateur)
of Dassault Falcon Jet Corporation, Dassault International Inc. and
Chairman and Director of Dassault Belgique Aviation, Chairman
of Marcel Dassault Trading Corporation and of Serge Dassault
Trading Corporation.
Outside Dassault Group: Director of SITA
Other positions expired during the past five years:
Director of Société Financière Terramaris
5
Age: 60
Nationality: Belgian
Professional address: Singapore Management University –
81 Victoria Street, Singapore 188065 – Singapore
Main position: President of the Singapore Management
University
Other current position and Directorships:
Outside France: Director of Temasek Management Services
Pte. Ltd, Singapore International Chamber of Commerce, SMU
Ventures Pte. Ltd, member of the Board of Directors of Singapore
National Research Foundation.
Other positions expired during the past five years:
Director of Kylian Technology Management Pte. Ltd, Director
of SR&DM, Director of Option International NV Professor and
Director of the Judge Business School at the University of
Cambridge ( United Kingdom).
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ODILE DESFORGES – INDEPENDENT DIRECTOR
Member of the Audit Committee
Biography: Born in 1950 in Rouen (France), Ms Desforges
graduated from the École Centrale Paris in 1973. She began her
career at the Transport Research Institute, before joining Renault
in 1981 as Planner and then Product Engineer. In 1986, she joined
the purchasing department. She was Body Equipment Purchasing
General Manager for Renault/Volvo Purchasing Organization,
then for Renault. In 1999, she became Executive-Vice-President
of Renault-VI Mack Group, before becoming President of Volvo
Group’s 3P Business Unit.
In 2003, she was appointed Senior Vice-President, Purchasing,
and Chairwoman and Managing Director of Renault Nissan
Purchasing Organization. Between March 1, 2009 and July 1,
2012, she was Executive Vice-President, Engineering and Quality,
and a member of the Group Executive Committee.
End of current term: General Meeting called to approve the
financial statements for the financial year ending December 31,
2016.
Date of first appointment: 05/30/2013
Dassault Systèmes shares owned at December 31, 2014: 300
MARIE-HÉLÈNE HABERT – DIRECTOR ( SINCE JULY 23, 2014)
Biography: After a Master’s degree in Business Law and Taxation,
a business law practitioner diploma (Assas, 1988) and a Master’s
in Strategy and Marketing (Sciences Po, 1989), Marie-Hélène
Habert began her career at DDB Publicité in London as a media
planning consultant. She joined the Dassault Group in 1991 as
Deputy Director of Communications. Since 1998, she has been
Group Director of Communication and Patronage.
End of current term: General Meeting called to approve the
financial statements for the financial year ending December 31,
2015.
Date of first appointment: 07/23/2014
Dassault Systèmes shares owned at December 31, 2014: 500 (1)
(1) Marie-Hélène Habert is a shareholder of GIMD.
Age: 65
Nationality: French
Professional address: 3, rue Henri Heine, 75016 Paris – France
Main position: Director
Other current positions and Directorships:
In France: Director of Safran and Sequana (listed companies)
Outside France: Director of Johnson Matthey Plc (United
Kingdom)
Other positions expired during the past five years:
Director of RNBV, RNTBCI and Renault Espana SA
Age: 49
Nationality: French
Professional address: Groupe Industriel Marcel Dassault –
9 Rond-point des Champs Élysées – Marcel Dassault, 75008 Paris
– France
Main position: Director of Communication and Patronage,
Dassault Group.
Other current positions and Directorships:
Inside Dassault Group: Member of the Supervisory Board of
GIMD, Permanent representative of GIMD on the Supervisory
Board of Immobilière Dassault, member of the Board of Directors
of Dassault Aviation (a listed company), member of the Strategy
Committee of Dassault Développement, Director of the Serge
Dassault Foundation, Director of Artcurial and of Immobilière
Dassault (a listed company)
Outside Dassault Group: Director of Biomérieux (a
listed
company), General Manager of H Investissements, General
Manager of HDH and member of the Strategy Committee of HDF.
158 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
TOSHIKO MORI – INDEPENDENT DIRECTOR
Member of the Scientific Committee
Biography: Toshiko Mori is the Robert P. Hubbard Professor in
the Practice of Architecture at Harvard University’s Graduate
School of Design and was the Chairman of the department of
architecture from 2002 to 2008. She is principal of Toshiko Mori
Architect, and founder of VisionArc, a think-tank promoting global
dialogue for a sustainable future. Her firm’s recent work includes
performance spaces for the Brooklyn Children’s Museum and for
ART/New York, as well as the School of Environmental Science for
Brown University, a Master Plan for New York University, and a
laboratory facility for Novartis’ Cambridge Campus. She is also a
member of the World Economic Forum Global Agenda Council on
Design & Innovation, member of the G1 Summit (Japan), Master
Jury Member of the Aga Khan Prize and Master Jury Member of the
Holcim Award 2014 for North America. Lastly she is a partner of
Paracoustica, a non-for-profit organization which builds portable
concert halls for the benefit of disadvantaged populations to
foster an appreciation of music.
End of current term: General Meeting called to approve the
financial statements for the financial year ended December 31,
2014.
Date of first appointment: 05/26/2011
Dassault Systèmes shares owned at December 31, 2014: 600
5.1.1.2 Practices of the Board of Directors
Separation of the offices of Chairman and Chief
Executive Officer
Dassault Systèmes has separated the offices of Chairman of
the Board of Directors (Mr Edelstenne) and Chief Executive
Officer (Mr Charlès). In addition to the balance of powers that
this offers, it enables the Chairman and the Chief Executive
Officer to concentrate on their specific remits (described
below) within an experienced and harmonious management
team, (both roles were previously held by Mr Edelstenne).
The Chairman of the Board organizes and supervises the work
of the Board and reports thereon at the General Meeting.
He ensures the proper functioning of the Board and its
committees and their compliance with the best practices of
good corporate governance, for example, by making sure that
the directors are capable of fulfilling their duties. The Chief
Executive Officer keeps him regularly informed of significant
matters concerning the Company, and in particular its
strategy, organization and investment projects. The Chairman
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Age: 63
Nationality: Japanese
Professional address: Toshiko Mori Architect, 199 Lafayette
Street, New York NY 10012 – USA
Main Position: Member of Toshiko Mori Architect PLLC
5
Other current positions and Directorships:
Outside France: Robert P. Hubbard Professor in Harvard Graduate
School of Design, member of the American Institute of Architects
College of Fellows, member of the World Economic Forum Global
Agenda Council on Future of Cities, member of the Supervisory
Board of A + U Magazine, member of the G1 Summit (Japan),
Master Jury Member in Aga Khan Prize and member of the
Sydney Modern jury.
Other positions expired during the past five years:
President of World Economic Forum Global Agenda Council on
Design.
Member of the Board of Directors of Architecture for Humanity,
member of the World Economic Forum Global Agenda Council on
Design & Innovation.
also oversees maintaining quality relations with shareholders
in close coordination with measures taken in this area by the
Chief Executive Officer. All of these tasks of the Chairman of
the Board are directed toward serving the Company, and his
actions are taken into account in reviewing and determining
his compensation.
The Chief Executive Officer is vested by law with the most
comprehensive powers to represent Dassault Systèmes
in
SA, subject to the
paragraph 5.1.1.4 “Powers of the Chief Executive Officer”
below. He represents Dassault Systèmes SA in its dealings
with third parties.
limitations of powers
indicated
The Board of Directors has set up a number of special committees
to help it perform its tasks: the Audit Committee (established
in 1996), the Compensation and Nomination Committee
and the Scientific Committee (2005). The committees report
regularly to the Board as to the performance of their missions.
The composition of these committees and their practices are
described in paragraph 5.1.1.3 “Composition, Practices and
Activities of the Board C ommittees”.
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Main provisions of the Board’s internal regulation
The Board of Directors established its internal regulation
(amended on March 21, 2014) to reflect the recommendations
of the AFEP-MEDEF Code (June 2013). It defines the objectives,
and the rules governing the composition and operation of the
Board and its committees, and their interactions. The Audit
Committee has its own charter, which was also updated
recently (March 2015).
The internal regulation stipulates how often Board meetings
take place and how Board members may participate in them. It
also provides rules on the information and disclosure provided
to the Board members on a regular basis (e.g. information on
off-balance sheet commitments and the cash position) and on
when an event occurs that might have a material impact on
the Company’s prospects, outlook or on the implementation
of the Company’s strategy. The internal regulation imposes
limitations on the powers of the Chief Executive Officer (see
paragraph 5.1.1.4 “Powers of the Chief Executive Officer”).
The internal regulation requires that, each year, (i) the Board
reviews the independence of the directors, (ii) the non-
executive directors meet on one occasion without the other
directors to have a general discussion on the practices of the
Board of Directors, and if applicable, debate specific subjects,
and (iii) the Board discusses its practices. Every three years,
the Board should conduct a formal review.
With regard to the obligations applicable to directors,
the internal regulation provides a reminder of the legal
confidentiality requirements and reflects the ethical rules
set out in the AFEP-MEDEF Code, particularly in the area
of conflicts of interest. In terms of the number of positions
held in other companies, each director is required to inform
the Company of any other position held in another French or
foreign company, including in their committees. Moreover,
the executive officers (dirigeants mandataires sociaux) must
first obtain the approval from the Board prior to accepting a
new term of office in a listed company. The internal regulation
also requires them to hold, directly or indirectly, a relatively
significant number of Dassault Systèmes shares, and to comply
with the Group’s rules on the prevention of insider trading.
These rules prohibit directors from trading in any securities
issued by Dassault Systèmes if they are aware of any insider
information and during the trading blackout periods defined
by the said rules. Even outside of these blackout periods,
directors must obtain the Insider Committee’s prior approval
for any transactions involving the Company’s shares.
The Board of Directors’ activities in 2014
The Board of Directors met nine times in 2014, with an
attendance rate of 84%.
In addition to the deliberations on its agenda pursuant to the
law (notice of the General Meeting and approval of the annual
160 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
management report), the Board also discussed principally the
following issues:
(cid:125) the Company’s strategy
review of
strategic directions, review of partnership and acquisition
transactions);
(definition and
(cid:125) the accounts and the budget (approval of the 2013 annual
financial statements and consolidated financial statements,
the consolidated financial statements for the first half of
2014, and the review of quarterly results); the Board is kept
informed as to the Group’s financial position by reports
from the Audit Committee and presentations made at each
meeting by the Senior Executive Vice-President and Chief
Financial Officer;
(cid:125) the review of the assessment of the internal control system;
(cid:125) the two-for-one stock split of the Dassault Systèmes share
on July 17, 2014;
(cid:125) the proposal to transform Dassault Systèmes SA into
a European company; negotiations with the employee
representatives began in autumn 2014 and the decisions
relating to the change will be submitted to the General
Meeting of May 28, 2015 (see paragraph 7.2 “Draft
Resolutions Proposed by the Board of Directors to the
General Meeting of Shareholders on May 28, 2015”);
(cid:125) the compensation of directors and allocation of shares and
share subscription options;
(cid:125) the composition of the Board (review of the independence
of directors identified as such and of the significant nature
of any business relationships with the Group, and the co-
opting of a new director); and
(cid:125) the compliance of Dassault Systèmes SA with the rules and
recommendations on corporate governance, particularly
with respect to the Board’s composition and practices.
Directors’ training
In accordance with the AFEP-MEDEF Code, each director may
request, if he or she considers it necessary, additional training
relating to Dassault Systèmes’ specific features, businesses
and markets.
The Board’s review of its practices and performance
The Board of Directors is constantly seeking to improve its
practices. It has two ways of doing this:
(cid:125) it asks the non-executive directors for their comments on
the subject. The non-executive directors meet every year
to discuss the Board’s practices. In 2014, a presentation
was made to them, after which they were able to have a
discussion without the presence of the Dassault Systèmes
SA teams, before reporting on their discussion to the
Board. During this meeting, they also had access to the
presentation on the risks faced by the Group, which they
had requested;
(cid:125) it holds a debate at least once a year on its practices, and
conducts a formal review every three years, in accordance
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5
with its internal regulation and the AFEP-MEDEF Code. No
major issues were discovered during the last review, and no
specific action plans have been put in place as a result.
5.1.1.3
Composition, Practices and Activities
of the Board committees
Audit Committee
The Audit Committee is solely comprised of independent
directors: Odile Desforges and Jean-Pierre Chahid-Nouraï
(Chairman). They have been company directors and have
financial or accounting expertise.
The Audit Committee’s mission is to oversee matters related
to the preparation and the auditing of accounting and financial
information, in compliance with the applicable regulations
and its Charter. Without limiting the powers of the Board
of Directors, this Committee is, in particular, responsible
for overseeing the preparation process of the financial
information, the effectiveness of the internal control and risk
management systems, the audit by the Statutory Auditors
of the annual financial statements and consolidated financial
statements and the independence of the Statutory Auditors.
On all these matters, it reports its recommendations to the
Board of Directors.
The Audit Committee also oversees the relationship between
the Company and its Statutory Auditors and participates in
particular in their appointment or the renewal of their mandate,
or in their appointment for non-audit related mission.
Lastly, it approves the annual plan for internal audits and gives
its opinion on the department’s organization.
the Group’s
In the performance of its mission, the Committee is given
presentations by
financial management,
particularly regarding risks and, as the case may be, off-balance
sheet commitments, and during the audit of the financial
statements, a presentation from the Statutory Auditor on
the results of the statutory audit and the accounting options
selected. With regard to the efficiency of the internal control
and risk management systems, the Statutory Auditor informs
the Committee of its main findings and the Internal Audit
Director reports on the conclusions of his work to the Statutory
Auditor. In addition, the Committee may call on external
experts, having assessed their expertise and independence.
For reasons of organizational efficiency, meetings of the Audit
Committee take place on the same day as Board meetings.
However, as the documentation relating to the consolidated
and annual financial statements is sent out at least five
days before the Board approves the accounts, the members
of the Audit Committee have enough time to review the
documentation and to discuss it, if necessary, before the
Board meeting.
In 2014, the Audit Committee met seven times, including
three meetings at head office, which were attended by the
Senior Executive Vice-President and Chief Financial Officer,
the Company Finance Vice-President, the Consolidation
Director, the Internal Audit Director, the General Counsel
and the Statutory Auditors of the Company, with which
regular discussions were held without the management in
attendance. The meetings preceding the disclosure of the
quarterly results took place by conference call. The attendance
rate for meetings of the Audit Committee in 2014 was 100%.
At its meeting of March 20, 2015, the Board of Directors
amended the Audit Committee’s charter following a review
carried out in 2014, to clarify the role and duties of the
Committee in relation to the revised version of the AFEP-
MEDEF Code and the recommendations of the AMF, and to
formalize certain of the Committee’s governance practices (for
example, the possibility of participating by videoconference
and a review of the Audit Committee’s annual work schedule).
Compensation and Nomination Committee
The Compensation and Nomination Committee is comprised
solely of independent directors: Mr Chahid-Nouraï (Chairman)
and Mr De Meyer.
The main duties of this Committee are:
(cid:125) to propose to the Board of Directors the amounts for
compensation and benefits of the executive officers
(dirigeants mandataires sociaux), including the formulas and
the rules to apply for determining variable compensation,
and to verify the application of these rules;
(cid:125) to evaluate the overall amount and the allocation of the
directors’ fees;
(cid:125) to propose to the Board the nomination or renewal of
directors and examine the independence of those who are
so identified, based on the criteria set out in the AFEP-
MEDEF Code;
(cid:125) to examine the Company’s policy for nominating, and to
be informed of the compensation policy for the managers,
including non-executive directors;
(cid:125) to discuss the employee profit-sharing and incentive plan
comprised of grants of performance shares and share
subscription options; and
(cid:125) to propose to the Board of Directors solutions in case of
vacancy of the position of Chairman of the Board and of
Chief Executive Officer.
When the Compensation and Nomination Committee carries
out its nomination work, it liaises with the Chief Executive
Officer and the Chairman.
In relation to its duties, the Committee met four times in 2014,
with an attendance rate of 100%. During these meetings,
the Committee made recommendations to the Board on the
following subjects:
(cid:125) the independence of directors, which was in reviewed in
relation to the responses of each director to a questionnaire;
(cid:125) the co-opting of a director;
(cid:125) the amount and distribution of the fees allocated to
directors;
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(cid:125) the renewal of the terms of office of the Chairman and Chief
Executive Officer;
(cid:125) the compensation of executive officers
(dirigeants
mandataires sociaux);
(cid:125) the share plans and share subscription option plans for
Group directors and employees;
(cid:125) the changes with regard to the composition of the Executive
Committee and the structure and level of compensation of
non-executive directors.
On a general and ongoing basis, the Compensation and
Nomination Committee monitors the compliance of Dassault
Systèmes with the law and best practice in the area of corporate
governance, particularly with regard to the composition of the
Board.
Scientific Committee
Like the other Board committees, the Scientific Committee is
comprised solely of independent directors: Ms Toshiko Mori
and Mr Arnoud De Meyer (Chairman). It meets at least once a
year. The Committee reviews the main directions of research
and development, as well as the Company’s technological
achievements and makes recommendations on these matters.
The persons with principal responsibility for these matters
within Dassault Systèmes are invited to the Committee’s
meetings.
The Scientific Committee met three times in 2014, with an
attendance rate of 83%. At these meetings, it considered a
number of topics central to Dassault Systèmes strategy. In
particular, it covered the aim to bring the 3DEXPERIENCE
platform to new audiences: in addition to the traditional PLM
customers (engineers and manufacturers), the 3DEXPERIENCE
platform can be targeted at the academic community, with
education solutions, as well as scientific and marketing
customers, with the innovations of the BIOVIA and 3DEXCITE
brands. The Scientific Committee also discussed the disruptive
aspect of internet-connected devices and social networks and
their implications for business users and consumers.
5.1.1.4 Powers of the Chief Executive Officer
Pursuant to French law, the Chief Executive Officer represents
Dassault Systèmes SA in dealings with third parties within the
limits set by the corporate purpose of the Company and by
the powers reserved by law to the shareholders or the Board
of Directors.
However, under the Board’s
internal regulation, certain
decisions of the Chief Executive Officer are submitted to the
prior approval of the Board. This concerns, in particular, a
significant transaction outside the scope of the Company’s
strategy, or an acquisition or the disposal of an entity,
shareholding or asset (excluding internal transactions) or the
use of external funding (bank loan or capital market issue), if
the amount of the transaction exceeds a threshold set each
year by the Board. This threshold, which was set by the Board
on March 20, 2015, is € 500 million.
On March 20, 2015, the Board also renewed its authorization to
the Chief Executive Officer to grant guarantees, endorsements
or securities in the name of Dassault Systèmes SA up to an
aggregate amount of € 500 million.
5.1.2 The Executive Committee
The Executive Committee assists the Chief Executive Officer. The Committee comprises the heads of the main business areas and
functions of Dassault Systèmes:
Bernard Charlès (1)
Dominique Florack
Thibault de Tersant(2)
Bruno Latchague
Monica Menghini
Pascal Daloz
Sylvain Laurent
Laurent Blanchard
Laurence Barthès
Philippe Forestier
President & Chief Executive Officer
Senior Executive Vice President, Research and Development
Senior Executive Vice President, Chief Financial Officer
Senior Executive Vice President, Global Field Operations (Americas), Industry solutions and
Indirect channels
Executive Vice President, Chief Strategy Officer
Executive Vice President, Brands and Corporate Development
Executive Vice President, Global Field Operations (Asia), Worldwide Business Transformation
Executive Vice President, Global Field Operations (EMEAR)(3), Worldwide Alliances and Services
Executive Vice President, Chief People and Information Officer
Executive Vice President, Global Affairs and Communities
(1) Mr.. Bernard Charlès is also a director of Dassault Systèmes SA and an executive officer as defined by the AFEP-MEDEF Code.
(2) Mr. Thibault de Tersant is also a director of Dassault Systèmes SA.
(3) Europe Middle-East Africa Russia.
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5
5.1.3 Declarations Regarding the Administrative Bodies and Senior
Management
To Dassault Systèmes SA’s knowledge:
(cid:125) there is no family relationship between the Company’s
directors, or between a director and a member of the
Executive Committee (see paragraph 5.1.2 “The Executive
Committee” for the list of members) with the exception of
Mr Serge Dassault (a director until May 27, 2014), his wife
Ms Nicole Dassault and their daughter Ms Marie-Hélène
Habert (a director since July 23, 2014);
(cid:125) in the past five years, none of the directors or members of
the Group’s Executive Committee has been convicted of
fraud, been declared bankrupt or their property impounded
or liquidated, been subject to an official accusation and/
or penalty delivered by legal or regulatory authorities, or
been prohibited by a court from becoming a member of
an administrative, management or supervisory body of a
company, or from being involved in the management or
direction of the affairs of a company;
(cid:125) there are no potential conflicts of interest between the
duties to the Company of the members of the Board of
Directors and their private interests and/or other duties, and
no director or member of the Group’s Executive Committee
has been named to the Board or to an administrative,
management or supervisory body as a result of an
agreement between the Company’s main shareholders,
customers, suppliers or any other persons;
(cid:125) no director or member of the Group’s Executive Committee
is party to a service contract with Dassault Systèmes SA,
or one of its subsidiaries, which provides him or her with a
personal benefit; and
(cid:125) no loans or guaranties have been granted or established on
behalf of the directors or members of the Group’s Executive
Committee, and there are no assets used by the Company
which belong directly or indirectly to the directors, members
of the Group’s Executive Committee or their families.
5
5.1.4 Principles Established by the Board of Directors pertaining
to Compensation of the Company’s Executive Officers
and directors
Dassault Systèmes SA’s compensation policy is designed to
attract, motivate and retain highly qualified individuals, with
the aim of ensuring the success of Dassault Systèmes. This
success depends on the achievement of its objectives, in
particular, strategic, business and financial objectives, over
the medium and long term. In setting criteria for determining
compensation, Dassault Systèmes seeks to strike a balance
between short-, medium- and long-term financial objectives,
in order to take into account the creation of stockholder value
and recognize individual performance.
Since 2013, the AFEP-MEDEF Code has recommended
submitting the elements of the compensation due or allocated
to each executive officer during the year to the vote of
shareholders. The shareholders of Dassault Systèmes SA were
therefore invited to vote at the 2014 General Meeting on the
compensation with respect to the 2013 financial year of the
Chairman of the Board (6th resolution) and the Chief Executive
Officer (7th resolution). These resolutions were approved, by
97.22% and 84.92%, respectively.
The shareholders will be consulted again on the elements of
compensation for 2014 (see paragraph 7.1 “Presentation of
the Resolutions Proposed by the Board of Directors to the
General Meeting on May 28, 2015”).
The annual compensation of the Chairman of the Board is
a fixed amount. The compensation of each member of the
Executive Committee is comprised of a fixed portion and
a variable portion. The variable portion may represent a
significant part of the total compensation if the annual targets
are achieved or outperformed. The targets are reviewed every
year in order to be consistent with the Company’s strategic
orientations and include individual management targets.
Members of the Executive Committee within the French scope
except for the Chief Executive Officer, are also eligible for profit-
sharing payments in the same manner as other employees
of Dassault Systèmes SA, as described in paragraph 5.1.4.5
“Employee Profit-sharing”.
5.1.4.1
Compensation of Executive Officers
The annual target compensation with objectives achieved
for the Chief Executive Office is comprised of a fixed portion
for 50%, paid monthly, and a variable portion for 50%, paid
annually in relation to of the achievement of the performance
criteria previously set by the Board of Directors. The level of
achievement of the objectives determines the amount actually
paid for the variable compensation, which can result in a
payment below the target, or up to 140% above the target.
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In addition, the Chief Executive Officer receives benefits in-kind,
as indicated in paragraph 5.3 “Summary of Compensation and
Benefits Due to Directors”, which contains all the data with
respect to compensation of the executive officers.
The Board of Directors, during its meeting held on March 20,
2015, decided to fix the amount of the variable compensation
due to the Chief Executive Officer for 2014, paid in 2015, at €
1,269,600 , after review of the achievement of the performance
criteria set in 2014, which included the diluted net profit per
share on a non-IFRS consolidated basis (hereinafter referred
to as the “EPS”) for 2014 as announced by the Company, an
evaluation of the Company’s efficiency processes as reflected
by the non-IFRS operating margin, Dassault Systèmes’
competitive position as reflected by growth in total revenues
compared to its competitors, the product portfolio and the
implementation of the Company’s short, medium and long
term strategy, contributing to its future growth.
The five main criteria are equally weighted. The purely
quantitative nature of some of the criteria, together with the
above-mentioned distribution formula, sets a de facto limit on
the qualitative portion in the assessment of the performance
of the Chief Executive Officer. Nonetheless, Dassault Systèmes
does not consider it pertinent to disclose this limit. Moreover,
within the criteria with a qualitative component, the
measurement of performance is mainly based on quantifiable
targets, making it difficult to determine the exact weighting of
the purely qualitative portion.
During its meeting held on March 20, 2015, the Board of
Directors also set the performance criteria on which the
payment of the CEO’s variable compensation was dependent
for 2015, based on the same categories as the ones that applied
in 2014, as described in the previous paragraph. In order to
protect the Company’s competitive position, the Board of
Directors considered that it was not appropriate to reveal more
details about these performance criteria, which are subject to
discussion by the Compensation and Nomination Committee
and by the Board of Directors. These criteria are both internal
and external and relate to the annual performance of the
Group or to its multiannual (medium and long term) strategy.
In addition, they include a strong “Social and Environmental
Responsibility” dimension
in relation with the Group’s
business, each of Dassault Systèmes’ brands containing
a promise of sustainable development (see paragraphs
for Sustainability:
2.2.2.1
Apps and Solutions for sustainable development”, 2.1.5
“Acknowledging performance and rewarding contribution
to delivering the strategy” and 2.1.3.3 “Developing relations
with the social, regional and community environment” ).
“3DEXPERIENCE Platform
At its meeting on March 20, 2015, the Board of Directors set
the 2015 fixed compensation for the Chairman at €982,000
and the total 2015 annual target compensation with objectives
achieved for the Chief Executive Officer at €2,650,000 , half of
which will vary in relation to the achievement of objectives.
The Chairman of the Board and the Chief Executive Officer are
not beneficiaries of an additional retirement plan, nor are they
entitled to any indemnities under a non-competition clause.
The Chairman and Chief Executive Officer also receive
director’s fees (see paragraph 5.3 “Summary of Compensation
and Benefits Due to Directors”).
5.1.4.2
Indemnities Due in the Event of the
Imposed Departure (départ contraint)
of the Chief Executive Officer
In accordance with the French Commercial Code and the AFEP-
MEDEF Code, the principle and the amount of the indemnity
paid to the Chief Executive Officer upon the termination
of his functions are subject to conditions, in particular
performance conditions. Thus the indemnity would be due
in case of a change in control or strategy of the Company
duly acknowledged by the Board of Directors, which results
in an imposed departure (départ contraint) in the subsequent
12 months. The indemnity may also be paid if the imposed
departure is not linked to poor results of the Company or to
mismanagement by the Chief Executive Officer, the Board
of Directors being entitled to decide to pay all or part of the
indemnity. The Board decided to provide for this indemnity
payment, which is in addition to those recommended by the
AFEP-MEDEF Code, given the shareholder structure of the
Company and the length of service to the Company of the
Chief Executive Officer.
However, the indemnity would not be due in the event the
Chief Executive Officer would leave the Company on his
own initiative to take a new position elsewhere, or would be
assigned a new position within the Company, or if he would
receive retirement benefits shortly after leaving. Furthermore,
in the event of exceptional circumstances seriously damaging
the image or results of the Company and significantly
reducing, in the opinion of the Board, the market price of the
Company’s shares or in the event of misconduct other than
in connection with his corporate functions (faute séparable de
ses fonctions) and incompatible with the normal performance
of his mandate, the Board may decide that the indemnity
payment is not due.
Finally, the amount of the indemnity due to the Chief Executive
Officer in the event of the termination of his functions will
be equivalent to a maximum of two years of compensation
as Chief Executive Officer and will depend on satisfying the
performance conditions established for calculating his variable
compensation. The amount paid would be calculated pro rata
with respect to the percentage of variable compensation
which was paid during the three years preceding his departure
as compared to the targeted variable compensation for such
years. The amount due would be calculated by applying the
following formula:
(cid:125) the aggregate gross compensation (including variable
compensation but excluding compensation in kind and
directors’ fees) due in connection with his position for the
two years completed prior to the date of departure;
(cid:125) multiplied by the quotient of (i) the amount of variable
compensation actually paid during the three financial years
completed prior to the date of departure with regard to
their respective years of reference (numerator), divided by
(ii) the amount of target variable compensation determined
164 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
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5
for each of these years by the Board of Directors on the
basis of achievement of the objectives set for the Company
(denominator).
The indemnity is thus subject to performance conditions
related to achieving targets fixed for the variable compensation.
When the term of office of the Chief Executive Officer was
renewed, the Board of Directors, at its meeting on May 26,
2014, authorized, in accordance with the proposal of the
Compensation and Nomination Committee and pursuant
to Article L. 225-42-1 of the French Commercial Code, the
renewal of the agreement relating to the commitments made
by Dassault Systèmes SA in relation to these indemnities,
under the terms adopted by the Board at its meeting on
May 27, 2010. This agreement will be submitted to the General
Meeting of May 28, 2015 (see paragraph 7.1 “Presentation
of the Resolutions Proposed by the Board of Directors to the
General Meeting on May 28, 2015”).
5.1.4.3
Performance shares and Share
Subscription Options
The members of the Group’s Executive Committee are given
long-term incentives notably through grants of Dassault
Systèmes performance shares or share subscription options
to associate them with the development and performance
of the Company. In general, performance shares or share
subscription options may be granted to key employees of
the Company, and the number granted to each of them is
dependent on performance and level of responsibility.
The Board of Directors, on the recommendation of the
Compensation and Nomination Committee, decided to grant
150,000 shares to the Chief Executive Officer on February 21,
2014 (the “2014-B Shares”) (i.e., 300,000 shares following
the two-for-one stock split on July 17, 2014) as part of the
gradual process of associating him with the Company’s capital
that began several years ago, with the aim of recognizing
his entrepreneurial role during more than 30 years with the
Company and providing him with an equity interest comparable
to that of founders of companies in the same sector, and more
generally, of his peers in technology companies around the
world. In accordance with the recommendations of the AFEP-
MEDEF Code, the acquisition of these shares is subject to
the condition that the Chief Executive Officer remains within
the Company, and to the fulfillment each year during three
years of at least one of the following performance conditions:
the change in non-IFRS diluted earnings per share of the
Dassault Systèmes Group in relation to the one in 2014, or if
the Dassault Systèmes share outperforms the CAC 40 index.
This performance condition is identical to that stipulated
for the performance shares granted by the Board to certain
employees of the Group (the “2014-A Shares”).
In accordance with the law, at the time of each of the share
and option grants, the Board of Directors has set a lock-
up commitment for shares that may be held by the Chief
Executive Officer following the exercise of stock options or
the acquisition of the shares concerned. As such, the Chief
Executive Officer must maintain in registered form at least
15% of the total amount of shares he subscribes or acquires in
connection with stock options or shares granted to him since
2007, until he has left his current functions at the Company.
This percentage is calculated after deduction of the number of
shares which it would be necessary to sell to pay taxes, social
charges and expenses related to the sale of the total number
of shares vested.
In addition, upon the recommendation of the Compensation
the Board meeting of
and Nomination Committee,
February 21, 2014 set the number of shares which could
be granted to the executive officers (dirigeants mandataires
sociaux) at 35% of the overall amount approved at the General
Meeting of Shareholders of May 30, 2013, i.e. 879,007 shares
(i.e., 1,758,014 shares following the two-for-one stock split
on July 17, 2014). Thus, the 300,000 2014-B Shares allotted
to the Chief Executive Officer as part of the gradual process
of associating him with the Company share capital introduced
several years previously, represent 5.97% of the overall
amount, as decided by the General Meeting of May 30, 2013.
Pursuant to the AFEP-MEDEF Code, the Chief Executive
Officer of Dassault Systèmes has formally agreed until the
expiry of the legal lock-up period not to engage in any future
transactions guaranteeing him a capital gain from the sale of
performance shares and/or the exercise of share subscription
options. The Dassault Systèmes’ Insider Trading Rules already
imposed such restriction (further information on the blackout
periods on the sale of shares is found in section 5.1.1.2
“Practices of the Board of Directors—Main provisions of the
Board’s internal regulation”.)
The share grants noted above are in accordance with the law
of December 3, 2008, regarding remuneration from work.
Further information concerning share subscription options and
performance shares is provided in paragraph 5.3 “Summary
of Compensation and Benefits Due to Directors” of the 2014
Annual Report (Document de référence).
Moreover, at its meeting on March 20, 2015, the Board
reported that the performance conditions relating to the
2010-04 performance shares granted on September 7, 2012
to the Chief Executive Officer had been met, and that the
definitive number of shares acquired as a result was 14,000
( 28,000 shares following the two-for-one split of the Dassault
Systèmes share on July 17, 2014). Consequently, the Chief
Executive Officer will acquire the above-mentioned 2010-04
shares on September 7, 2015 provided that he remains in
office as of such date.
Aside from Dassault Systèmes SA, no other Group company
has granted shares to directors (mandataires sociaux).
In 2013, no performance shares and no shares subscription
options were granted.
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5.1.4.4 Directors’ Fees
The maximum annual amount of directors’ fees was set at
€350,000 by the General Meeting of May 26, 2014.
At its meeting on May 26, 2014, the Board of Directors
increased the amount of directors’ fees linked to the diligence
of the directors, in order to achieve a better balance between
the variable and fixed portions of the directors’ fees, in
accordance with the revised version of the AFEP-MEDEF Code.
Thus, in respect of the financial year ended on December 31,
2014, the amount of the directors’ fees granted to the Dassault
Systèmes SA directors is €298,657, including €151,657 in
respect of their positions (fixed portion) and €147,000 for
attending the meetings of the Board of Directors and its
committees (variable portion). For 2015, the variable portion
should be greater than the fixed portion taking into account
the number of Board meetings and assuming that all directors
attended.
The distribution of the fees among the directors for 2014 is
based on the following principles, set by the Board of Directors
in its meeting on May 26, 2014: €15,000 per director, an
additional €15,000 for the Chairman of the Board of Directors
and an extra €4,000 for the Chairman of the Audit Committee
(these amounts are paid pro rata of the actual period served in
the positions during the financial year); €2,000 per director
for physically attending a Board meeting (€1,200 previously);
€4,000 per member of the Audit Committee for physically
attending a meeting of this Committee (€2,400 previously);
€2,000 per member of the Compensation and Nomination
Committee or Scientific Committee for each meeting of these
committees they physically attend (€1,200 previously);
and €1,000 each per conference call or videoconference in
relation to a meeting of the Board of Directors or one of these
committees (€600 previously).
5.1.4.5
Employee profit-sharing
Finally the Company has profit-sharing plans for all employees.
The results of the financial year ended December 31, 2014,
which are subject to approval by the General Meeting
on May 28, 2015, should thus enable the distribution of
€17,921,048 in profit and to set aside a special profit-sharing
reserve (participation) of the same amount.
More than 90% of the employees of the French s ubsidiaries
held directly by Dassault Systèmes SA also benefit from
profit-sharing agreements. For more
information on
these agreements, see paragraph 2.1.5 “Acknowledging
and rewarding performance and the contribution to delivering
the strategy”.
5.1.5 Application of the AFEP-MEDEF Code
Dassault Systèmes refers to the recommendations of the
AFEP-MEDEF Code and reviews its corporate governance
practices on a regular basis in order to achieve continual
improvement in this area.
As permitted by such Code and the law, Dassault Systèmes SA
has not adopted all of the Code’s provisions, or has adopted
certain provisions in modified form, in view of its particular
situation or due to its compliance with other provisions of the
Code. These are summarized in the table below, together with
the reasons for their exclusion/modification.
166 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
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5
Recommendations of the AFEP-MEDEF Code
Explanation
Time period between the review of the financial
statements by the Audit Committee and the
approval by the Board of Directors
(Article 16.2.1)
Indemnity payment in the event of the departure
of the Chief Executive Officer only in the case of
an imposed departure or due to a change in
control or strategy
(Article 23.2.5)
Proportion of performance shares in executive
officer compensation
(Article 23.2.4)
Acquisition of shares by the executive officers
(dirigeants mandataires sociaux) benefitting from
grants of performance shares
(Article 23.2.4)
For reasons of organizational efficiency, meetings of the Audit Committee take place on the
same day as Board meetings. However, as the documentation relating to the consolidated
and annual financial statements is sent out at least five days before the Board approves the
accounts, the members of the Audit Committee have enough time to review the
documentation and to discuss it, if necessary, before the Board meeting.
Dassault Systèmes SA respects the principles of the AFEP-MEDEF Code in this area and will
not pay an indemnity in the event of poor Company results or mismanagement by the
Chief Executive O fficer. It nevertheless retains three cases for payment, one of which is not
explicitly provided for by such Code, in light of the Company’s shareholder base and the
long term of service of Bernard Charlès in the Company. It applies in the event of an
imposed departure (départ contraint) if the departure is not related to poor results of the
Company or mismanagement on the part of the Chief Executive Officer. In such case, the
Board could decide to pay all or a portion of the departure indemnity.
A significant portion of the shares granted to the Chief Executive Officer is done as part of
the plan adopted several years ago to progressively associate with the Company’s capital,
with the goal of recognizing his entrepreneurial role during more than 30 years with the
Company and to provide him an equity interest comparable to that of founders of
companies in the same sector, and more generally, of his peers in technology companies
around the world.
Dassault Systèmes SA believes that the lock-up commitment of the Chief Executive Officer of
15% of the shares which may be acquired as a result of grants, until he terminates his
functions, represents a mechanism with an effect equivalent to the recommendation in the
AFEP-MEDEF Code to subject the performance shares granted to executive officers to the
purchase of a fixed number of shares once such performance shares become available.
5
5.1.6
Internal Control Procedures and Risk Management
Because Dassault Systèmes SA was listed on the stock market
in the United States until the end of 2008, Dassault Systèmes
defined and implemented an internal control procedure based
mainly on the COSO (Committee of Sponsoring Organization
of the Treadway Commission) framework, as well as on the
AMF’s suggested reference framework regarding internal
control updated on July 22, 2010.
The Chairman’s report on internal control procedures applies
to Dassault Systèmes SA and its consolidated subsidiaries.
(cid:125) ensure the reliability, quality and availability of financial data
(an objective inspired by the COSO and AMF frameworks);
(cid:125) ensure that operations comply with legislation in effect and
the Company’s internal procedures (an objective inspired by
the COSO and AMF frameworks);
(cid:125) guarantee the security of assets, particularly intellectual
property, the human and financial resources and the
image of the Company (an objective inspired by the AMF
framework); and
5.1.6.1 Definition and objectives of internal
(cid:125) prevent risks of error or fraud.
control
According to the COSO accounting basis, internal control is
a process implemented by the Board of Directors, managers
and employees, aimed at providing a reasonable guarantee
with regard to achieving the following objectives: performing
and optimizing operations, the reliability of financial and
accounting information, and compliance with the laws and
regulations in force.
The internal control procedures within the Company, whether
at the level of Dassault Systèmes SA or its subsidiaries, are
designed to:
(cid:125) improve the performance and efficiency of operations
through optimized use of available resources (an objective
inspired by the COSO framework);
5.1.6.2
Internal Control Participants
and Organization
All corporate governance bodies participate
implementation of the internal control processes.
in
the
The Board of Directors, concerned with the issue of internal
control, created in 1996 an Audit Committee, with the
mission described above (see paragraph 5.1.1.3 “Composition,
Practices and Activities of the Board C ommittees”).
DASSAULT SYSTÈMES ANNUAL REPORT 2014 167
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In parallel, the Company’s management has established the
following bodies:
5.1.6.3
Internal Control and Risk
Management Procedures
(cid:125) an Insider Committee responsible for setting and applying
the rules aimed at preventing insider trading. In particular,
this Committee informs all interested parties (employees,
directors, consultants, etc.) of the periods in which they
are prohibited from buying or selling Dassault Systèmes
securities. These blackout periods are longer than those
recommended by the AMF. In addition, as they have regular
access to privileged and insider information in relation to
their roles, the Group managers must obtain the Insider
Committee’s prior approval for any transactions involving
the Company’s securities (as defined in the Group’s
Insider Trading Rules). The Company applies the rules and
recommendations of the AMF regarding the prevention of
insider trading on a general basis;
(cid:125) an internal audit department reporting to the Senior
Executive Vice-President and Chief Financial Officer and
to the Audit Committee, one of its main missions is to
evaluate the relevance of Dassault Systèmes’ internal
control processes, to alert the management and the Audit
Committee regarding possible deficiencies or risks, and
to propose measures that will limit the risks and improve
the efficiency of operations. In 2014, and in line with the
work conducted in the previous years, the internal audit
department had the responsibility for assessing, on behalf
of the management, the internal control mechanisms
related to financial reporting;
(cid:125) an “Ethics & Compliance” department reporting to the
Chief Executive Officer, responsible for ensuring the
implementation and respect of the Code of Business
Conduct, as well as the Company’s specific policies,
recommendations and procedures regarding ethics and
compliance. This department is supported by an Ethics
Committee which meets every month and investigates any
alleged non-conformities brought to its knowledge.
The internal control organization is also based on the principle
of giving responsibility to each of the departments and
subsidiaries of the Company in its respective area of expertise,
and on delegations of powers to certain members of the
Executive Committee of the Company.
Moreover, the subsidiaries’ local chief executive and financial
officers are responsible for preparing the subsidiaries’ financial
statements which are included in the Company’s consolidated
financial statements, and the annual financial statements and
management reports for each of their respective subsidiaries,
whether the accounts are prepared by their own financial
teams or by shared internal financial and accounting services
centers, particularly in the United States and France.
The Company’s financial planning and analysis department
is responsible for directing the financial objectives of the
Company in accordance with budget monitoring procedures
and, in this respect, performs specific controls and analyses
of the quarterly accounts. It is also responsible for identifying,
analyzing and warning of any differences from the previous
year, the previous quarter and the Company’s budget
objectives, which are subject to a quarterly update.
The internal control mechanisms developed by the Company
promote internal control in the following areas:
(cid:125) control report: The professional ethics of the Company are
set forth in the Code of Business Conduct, which describes
the manner in which Dassault Systèmes expects its business
to be conducted and which may serve as a reference tool
for all Group employees to help guide their behavior and
their interactions in their professional work. The Code
of Business Conduct, which applies to all employees of
Dassault Systèmes and is available on the Group’s internet
site and online community platform, addresses, in particular
(i) compliance with regulations applicable to the Company’s
business, (ii) individual interactions within the Company
and with its ecosystem, and (iii) protecting the Company’s
assets (in particular, the Company’s intellectual property
and that of its clients and partners). The Code also includes
rules governing conflicts of interest, insider trading and
financial reporting.
(cid:125) risk analysis: The main risks which may impact the
performance of the Company are identified, assessed and
regularly reviewed by the management of the Company.
These risks are described in paragraphs 1.6.1 “Risks Related
to the Company’s Business”. This paragraph specifies the
measures taken by the Group to manage or limit these risks
whenever possible.
Operational risks are essentially managed by subsidiaries.
Risks in the area of IP protection, ethics and financial risks
are specifically monitored by Dassault Systèmes SA as well
as locally monitored.
(cid:125) protection and monitoring activities:
1) protecting its intellectual property is an on-going
concern for the Group. This protection is ensured by
implementing and monitoring corporate processes
designed to verify the Company’s rights before it
markets its software products.
The Company also protects its inventions through
a reasonable and well-considered approach to filing
patents in several jurisdictions. The Company’s principal
brands are also registered in a large number of countries.
Moreover, the Group is continuing to extend its program
designed to fight against infringement concerning
its products,
2) information systems security, which
is critical to
ensuring the protection of the source codes for the
Company’s applications, is continually evaluated, tested
and strengthened in the areas of network access or
performance, anti-virus protection, and the physical
security of servers and other
information system
facilities,
3) the internal control policies related to the main processes
within the Company (information technology security,
sales administration, human resources, protection of
intellectual property, closing and publication of financial
168 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
statements, treasury management, client credit risk
management) are formalized and updated at the level of
both Dassault Systèmes SA and its main subsidiaries or
the related shared services centers,
4) key control points making it possible to prevent or
detect risks impacting the financial information in the
significant entities of the Company are documented,
5) tests are performed annually on these key control points
to evaluate their effectiveness,
6) the operational entities implement action plans with the
goal of continuous improvement.
(cid:125) monitoring: The Company has deployed processes
to monitor, review and analyze on a regular basis its
performance at the level of its main entities, brands,
distribution channels and geographical areas (governance,
budget reviews, activity reviews). In addition, quarterly
communication meetings are also held to ensure a better
dissemination of the Group’s strategy to all its managers
and discussions facilitating its implementation.
(cid:125) audit missions: In 2014, the internal audit department
carried out different missions within the Company’s
subsidiaries to verify compliance of the local internal control
procedures with the Company objectives. These missions,
authorized by the Audit Committee, result in the issuance of
recommendations to the local management teams and the
implementation of action plans when deemed necessary
to reinforce the audited processes and organizations.
The internal audit department carries out a review of the
implementation of these plans.
In addition, the Company has put in place internal preventative
measures to continue operations and limit the impact of a
significant loss in the event of major damage. As a result,
several secured computer systems protect source codes and all
electronic data stored on the servers, work stations and laptop
computers used in the different entities of the Company. The
computer protection systems are maintained in different sites.
5.1.6.4
Internal Control Procedures Relating
to the Preparation and Treatment of
Financial and Accounting Information
With respect to the internal control processes related to the
preparation of financial and accounting information, the
Company’s focus has been to:
(cid:125) implement a quarterly control system to update budget
objectives and identify and analyze any variation from the
objectives set by the financial department of the Company
and from the previous quarter and financial year.
Thus, each of the subsidiaries prepares a detailed and
documented presentation of its sales activity for the past
quarter and the year, and performs a comparative analysis
of its financial results (revenues and costs) in comparison
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5
with the budget targets of the current year and compared
to the same quarter for the previous year.
Budget projections are reviewed, analyzed and updated
each quarter by the teams of the f inancial department
to take into account all changes in the market and the
economic environment, particularly as regards exchange
rates, and to present realistic objectives to shareholders and
financial markets.
(cid:125) improve the reliability of
its consolidation tools and
processes
in order to establish and publish required
financial information every quarter as soon as possible. The
consolidation procedure as defined by Dassault Systèmes SA
is based on:
1) giving responsibility to the chief financial officers in the
subsidiaries, who are required to certify the quarterly
statements transmitted to Dassault Systèmes SA and to
provide detailed business reviews and analyses before
the accounts are consolidated,
2) the use of consolidation tools that make data
transmission and processing secure and allow the
elimination of intragroup transactions,
3) standardization of processes and information systems,
particularly with respect to centralizing and recording
most of the transactions at shared services centers,
4) the implementation of an annual process to monitor off-
balance sheet commitments, related-party or regulated
agreements (conventions réglementées),
5) a detailed review by the Group’s financial division of
the quarterly accounts of Dassault Systèmes SA and its
subsidiaries,
6) the detailed analysis by the Company’s accounting
department of all the software license and/or services
transactions with a significant impact on the financial
statements in order to validate the accounting process.
(cid:125) systematize the processes by which the Audit Committee
and the Board of Directors review financial information prior
to publication.
5
(cid:125) structure
its
financial
communications
to ensure
simultaneous and equivalent publication of information
on its principal markets of financial results or any other
information that could have an impact on the price of
its shares.
5.1.6.5
Evaluation of Internal Control
Since its voluntary delisting from the NASDAQ in October 2008,
Dassault Systèmes SA is no longer subject to the requirements
of the U.S. Sarbanes-Oxley Act with regard to the assessment
of its internal control procedures. The Company therefore
evaluates the internal control procedures applicable to its
in accordance with
principal processes and subsidiaries
European regulations.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 169
5 Corporate governance
Report of the Chairman on Corporate Governance and Internal Control
As the Company management aims to maintain a high level
of internal control within the Company, detailed assessment
work was again performed in 2014, as part of the process of
achieving continuous improvement and for the purpose of
preparing targeted action plans and audits. In this respect,
the scope of Group entities subjected to an internal control
evaluation continued to be expanded, via self-evaluation
questionnaires, to entities that had previously been considered
immaterial and newly acquired companies. In addition, Internal
Control’s efficiency is assessed by PricewaterhouseCoopers.
5.1.6.6
Limitations on Internal Control
The internal control system cannot provide an absolute
guarantee that the Company’s objectives in this area will be
achieved. Inherent limitations apply to all internal control
systems, related in particular to uncertainties in the external
environment, the exercise of
judgments, or
dysfunctions which may occur as a result of human failure or
simple error.
individual
5.1.7 Other information required by Article L. 225-37 of the French
Commercial Code
5.1.7.1
Specific Modalities Related
to Shareholders’ Participation
in the Meeting of Shareholders
Shareholders participate in the Meetings of Shareholders
of the Company according to provisions specified by law
and by the Company’s by-laws (Articles 24 to 33). Thus,
every shareholder has the right to participate in Meetings
of Shareholders and deliberations either personally or via a
proxy, regardless of the number of shares held, according to
conditions specified by Article 27 of the by-laws of Dassault
Systèmes (see paragraph 6.1.2 “Memorandum and Specific
By-Laws Provisions”).
In the case of the separation of the ownership of the shares,
the voting right belongs to the bare owner (nu-propriétaire),
except for decisions relating to the allocation of profits, where
it belongs to the beneficial owner (usufruitier).
5.1.7.2 Mention of the publication
of information provided for
by Article L. 225-100-3 of the French
Commercial Code
The information required by Article L. 225-100-3 of the
French Commercial Code is indicated in paragraphs 6.3
“Information about the Shareholders” (concerning control
of GIMD), 6.2.4 “Delegations and Authorizations Granted to
the Board of Directors by the General Meetings” (concerning
share issues), 6.2.5 “Stock Repurchase Programs” (concerning
acquisition by Dassault Systèmes SA of its treasury shares),
6.1.2.2 “General Meetings of Shareholders” (concerning the
conditions for exercising voting rights) and 5.1.4.2 “Indemnity
Due in the Imposed Departure (départ contraint) of the Chief
Executive Officer” in this 2014 Annual Report (Document de
référence) which is also a part of the annual management
report issued by the Board of Directors.
The 2014 Annual Report (Document de référence) is available
on the AMF website (www.amf-france.org) and on the
Dassault Systèmes website (www.3ds.com). A press release is
issued to announce when the Annual Report (Document de
référence) becomes available.
Charles Edelstenne
Chairman of the Board
170 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Corporate governance
Report of the Statutory Auditors on Corporate Governance and Internal Control
5
5.2 Report of the Statutory Auditors on Corporate
Governance and Internal Control
This is a free translation into English of the Statutory Auditors’ report issued in the French language and is provided solely for
the convenience of English speaking readers. This report should be read in conjunction with, and construed in accordance with,
French law and professional auditing standards applicable in France.
To the Shareholders,
In our capacity as Statutory Auditors of Dassault Systèmes SA, and in accordance with Article L. 225-235 of the French Commercial
Code (Code de commerce), we hereby report to you on the report prepared by the Chairman of your company in accordance with
Article L. 225-37 of the French Commercial Code for the year ended 12/31/2014.
It is the Chairman’s responsibility to prepare, and submit to the Board of Directors for approval, a report describing the internal
control and risk management procedures implemented by the Company and providing the other information required by Article
L. 225-37 of the French Commercial Code in particular relating to corporate governance.
It is our responsibility:
(cid:125) to report to you on the information set out in the Chairman’s report on internal control and risk management procedures
relating to the preparation and processing of financial and accounting information; and
5
(cid:125) to attest that the report sets out the other information required by Article L. 225-37 of the French Commercial Code, it being
specified that it is not our responsibility to assess the fairness of this information.
We conducted our work in accordance with professional standards applicable in France.
Information concerning the internal control and risk management procedures relating
to the preparation and processing of financial and accounting information
The professional standards require that we perform procedures to assess the fairness of the information on internal control and
risk management procedures relating to the preparation and processing of financial and accounting information set out in the
Chairman’s report. These procedures mainly consisted of:
(cid:125) obtaining an understanding of the internal control and risk management procedures relating to the preparation and processing
of financial and accounting information on which the information presented in the Chairman’s report is based, and of the
existing documentation;
(cid:125) obtaining an understanding of the work performed to support the information given in the report and of the existing
documentation;
(cid:125) determining if any material weaknesses in the internal control procedures relating to the preparation and processing of financial
and accounting information that we may have identified in the course of our work are properly described in the Chairman’s
report.
On the basis of our work, we have no matters to report on the information given on internal control and risk management
procedures relating to the preparation and processing of financial and accounting information, set out in the Chairman of the
Board’s report, prepared in accordance with Article L. 225-37 of the French Commercial Code.
Other information
We attest that the Chairman’s report sets out the other information required by Article L. 225-37 of the French Commercial Code.
Neuilly-sur-Seine and Paris-La Défense, March 23, 2015
The Statutory Auditors
PRICEWATERHOUSECOOPERS AUDIT
French original signed by:
Pierre Marty
ERNST & YOUNG ET AUTRES
French original signed by:
Jean-François Ginies
DASSAULT SYSTÈMES ANNUAL REPORT 2014 171
5 Corporate governance
Summary of the Compensation and Benefi ts Due to Directors
5.3 Summary of the Compensation and Benefits Due
to Directors
5.3.1 Compensation of the Company’s Directors (mandataires sociaux)
The tables below provide a summary, in accordance with the recommendations of the AMF and the AFEP-MEDEF Code, of
the compensation and benefits paid to the directors of Dassault Systèmes SA, pursuant to Article L. 225-102-1 of the French
Commercial Code (see also paragraphs 5.1.4 “Principles established by the Board of Directors pertaining to compensation of the
Executive Officers and directors” and 5.3.2.1. “Dassault Systèmes Share Subscription Options”).
TABLE 1: SUMMARY OF THE COMPENSATION, OPTIONS AND SHARES AWARDED TO EACH EXECUTIVE OFFICER
(in euros)
Charles Edelstenne, Chairman of the Board of Directors
Compensation due for the year (detailed in Table 2)
Value of the variable multi-year compensation granted during the year
Value of the stock options awarded during the year (detailed in Table 4)
Value of the performance share grants awarded during the year (detailed in Table 6)
Bernard Charlès, President and Chief Executive Officer
Compensation due for the year (detailed in Table 2)
Value of the variable multi-year compensation granted during the year
Value of the stock options awarded during the year (detailed in Table 4)
Value of the performance share grants awarded during the year (detailed in Table 6)
2014
2013
1,024,000
987,500
–
–
–
–
–
–
2,365,534
2,235,684
–
–
–
–
–
VALUE OF THE SHARES GRANTED TO THE CHIEF EXECUTIVE OFFICER AS PART OF THE PLAN TO PROGRESSIVELY
ASSOCIATE HIM WITH THE COMPANY’S CAPITAL
(in euros)
Bernard Charlès, Chief Executive Officer
2014
2013
Value of the shares granted as part of as part of the plan to progressively associate him with the Company’s
capital (see table 6) (1)(2)
5,620,500
None
(1) i.e., 150,000 2014-B Shares granted in 2014, as part of the gradual process of associating him with the Company’s capital that began several years ago, with the aim of
recognizing his entrepreneurial role during more than thirty years with the Company and providing him with an equity interest comparable to that of founders of companies in the
same sector, and more generally, of his peers in technology companies around the world, with a unit value of €37.47 in accordance with the IFRS 2 method chosen for consolidated
financial statements.
(2) Following the two-for-one split of the Dassault Systèmes share on July 17, 2014, these 150,000 shares were multiplied by two to increase them to 300,000.
172 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Corporate governance
Summary of the Compensation and Benefi ts Due to Directors
5
TABLE 2: SUMMARY OF THE COMPENSATION OF EACH EXECUTIVE OFFICER
Gross compensation before tax of the executive officers (dirigeants mandataires sociaux) is set forth in the table below.
(in euros)
Charles Edelstenne, Chairman of the Board
Fixed compensation (1)
Annual variable compensation
Multi-year variable compensation
Extraordinary compensation
Directors’ fees (2)
Benefits (3)
TOTAL
Bernard Charlès, President and Chief Executive Officer
Fixed Compensation
Annual variable compensation (4)
Multi-year variable compensation
Extraordinary compensation
Directors’ fees
Benefits (8)
TOTAL
2014
2013
Amount due in
respect of year
Amount paid
in 2014
Amount due in
respect of year
Amount paid
in 2013
982,000
982,000
951,500
951,500
–
–
–
42,000
–
–
–
–
36,000
–
1,024,000
1,018,000
–
–
–
36,000
–
987,500
–
–
–
36,600
–
988,100
1,058,000
1,058,000
1,025,000
1,025,000
1,269,600 (5)
1,178,750 (6)
1,178,750 (6)
1,141,950 (7)
–
–
27,000
10,934
–
–
21,000
10,934
–
–
21,000
10,934
–
–
21,600
10,934
2,365,534
2,268,684
2,235,684
2,199,484
5
(1) GIMD paid Mr Charles Edelstenne, as GIMD’s Chief Executive Officer, gross fixed compensation of €800,000 in 2014 and €196,115 in 2013.
(2) GIMD paid Mr Charles Edelstenne €22,719 in 2014 and €21,000 in 2013 directors’ fees for his term as a member of GIMD’s Supervisory Board .
(3) GIMD granted benefits in kind related to the use of a car for Mr Charles Edelstenne in an amount of €10,063 in 2014 and €9,030 in 2013.
(4) The rules governing the determination of variable compensation of the Chief Executive Officer are described in paragraph 5.1.4 “Principles Established by the Board of Directors to
Determine the Compensation of the Company’s Executive Officers and members of the Group’s Executive Committee”.
(5) Variable portion due for 2014 and paid in 2015.
(6) Variable portion due for 2013 and paid in 2014.
(7) Variable portion due for 2012 and paid in 2013.
(8) These benefits are related to the use of a car provided by Dassault Systèmes SA.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 173
5 Corporate governance
Summary of the Compensation and Benefi ts Due to Directors
TABLE 3: DIRECTORS’ FEES AND OTHER COMPENSATION RECEIVED BY THE NON-EXECUTIVE DIRECTORS
The directors do not receive any compensation other than the fees set forth in the table below, except for Charles Edelstenne and
Bernard Charlès, whose compensation is set forth in Table 2 above, and Thibault de Tersant, Senior Executive Vice-President and
Chief Financial Officer, whose compensation is set forth in Note 1 to the table below.
(in euros)
NON-EXECUTIVE DIRECTORS
Thibault de Tersant (1)
Jean-Pierre Chahid-Nouraï
Nicole Dassault (2)
Serge Dassault (3)
Arnoud De Meyer
Odile Desforges (4)
Bernard Dufau (5)
Marie-Hélène Habert (6)
André Kudelski (6)
Toshiko Mori
TOTAL
(1) The overall compensation received by Thibault de Tersant in 2013 and 2014 is set out below:
Thibault de Tersant, Director, Senior Executive Vice-President and Chief Financial Officer
Fixed Compensation
Annual variable compensation
Multi-year variable compensation
Extraordinary compensation
Directors’ fees
Benefits (c)
TOTAL SHARES
Directors’ fees paid
in 2014 for 2013
Directors’ fees paid
in 2013 for 2012
21,000
32,956
16,200
18,600
24,600
14,835
17,408
–
15,164
24,600
185,363
21,600
31,200
21,000
10,947
21,600
–
38,200
–
34,200
24,000
202,747
Compensation paid
in 2014
Compensation paid
in 2013
450,000
24 0,000 (a)
–
281
21,000
9,838€
721,119
410,000
210,000 (b)
–
1,492
21,600
6,812
649,904
(a)
(b)
(c)
Variable portion due for 2013. In 2014, Thibault de Tersant also received € 33,606 under the Company’s French profit sharing plans.
Variable portion due for 2012. In 2013, Thibault de Tersant also received €31,883 under the Company’s French profit sharing plans.
These benefits are related to the use of a car provided by Dassault Systèmes SA.
(2) GIMD paid Nicole Dassault €19,035 in directors’ fees in 2013 and €25,666 in 2013, in connection with her role as a member of the Supervisory Board of GIMD.
(3) GIMD paid Serge Dassault directors’ fees of €26,403 in 2014 and €25,666 in 2013, in connection with his role as a member of the Supervisory Board of GIMD, and €600,000 in
2013 and in 2014 in connection with his role as President of GIMD. GIMD also granted benefits in kind related to the use of a car to Mr Dassault in an amount of €16,024 in 2014
and €3,153 in 2013.
(4) Odile Desforges was named director by the General Meeting of May 30, 2013; she therefore did not receive any directors’ fees in 2013 in respect of 2012.
(5) The term of office as directors of Bernard Dufau and André Kudelski ended at the General Meeting of May 30, 2013.
(6) Marie-Hélène Habert was co-opted as a director by the Board of Directors on July 23, 2014; she therefore did not receive any directors’ fees in 2013 in respect of 2012, nor in 2014
in respect of 2013. In 2014, GIMD paid Marie-Hélène Habert €26,403 in directors’ fees as a member of GIMD’s Supervisory Board, €334,584 in compensation as the Dassault
Group Director of Communication and Patronage, €5,140 related to professional disbursements and granted her benefits in kind related to the use of a car in an amount of €3,803.
Other elements relating to the compensation of the directors are described in paragraph 5.1.4.4 “Directors’ Fees”.
TABLE 4: SUBSCRIPTION OR PURCHASE OPTIONS GRANTED IN 2014 TO EACH EXECUTIVE OFFICER
BY THE ISSUER AND BY ANY OF THE GROUP COMPANIES
(in euros)
Charles Edelstenne
TOTAL
Bernard Charlès
TOTAL
No. and date of
the plan
Type of options
(purchase or
subscription)
Value of the
options *
Number of options
granted in 2014
Exercise price
Exercise period
Not used
Not used
* Depending on the method used for the consolidated financial statements.
174 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Corporate governance
Summary of the Compensation and Benefi ts Due to Directors
5
TABLE 5: SUBSCRIPTION OR PURCHASE OPTIONS EXERCISED DURING 2014 BY EACH EXECUTIVE OFFICER
(in euros)
Charles Edelstenne
TOTAL
Bernard Charlès
TOTAL
No. and date of the plan
Number of options
exercised in 2014 *
Exercise price
2006-02 – 06/06/2007
None
30,000
30,000
47.50
* As from July 17, 2014 (the date of the two-for-one split of the Dassault Systèmes share), each option entitles the holder to two Dassault Systèmes shares of a par value of €0.50 each.
Mr Bernard Charlès generally reinvests the gains realized through the exercise of subscription stock options in shares of Dassault
Systèmes SA, after accounting for taxes, social charges and transaction fees. In 2014, Mr Bernard Charlès did not sell any Dassault
Systèmes shares.
TABLE 6: SHARES GRANTED IN 2014 TO EACH EXECUTIVE OFFICER BY THE ISSUER AND BY ANY OF THE
GROUP COMPANIES
No. and date of
the plan
Number of performance
shares granted in 2014
Value of the
shares (1)
(in euros)
Date of
acquisition
Date of
availability
Performance
conditions
Charles Edelstenne
Bernard Charlès
TOTAL
2014-B
– 02/21/2014
None
150,000 (2)
5,620,500
02/21/2018
02/21/2018
Yes
5
150,000
(1) Value based on the method chosen for the consolidated financial statements. The value retained for each granted share amounts to €37 .47 in accordance with the IFRS 2 method
chosen for consolidated financial statements.
(2) Following the two-for-one split of the Dassault Systèmes share on July 17, 2014, these 150,000 shares were multiplied by two to increase them to 300,000.
TABLE 7: SHARES THAT HAVE BECOME AVAILABLE DURING 2014 FOR EACH EXECUTIVE OFFICER
Charles Edelstenne
Bernard Charlès
TOTAL
No. and date of the plan
Number of shares
authorized and issued that
became available in 2014
Vesting conditions (3)
05/27/2010
None
150,000 (1)(2)
150,000
(1) The 150,000 shares which became available in 2014 were granted to the Chief Executive Officer as part of the plan, adopted several years ago, to progressively associate him with
the Company’s capital. It should be noted that, by law, a part of these shares is subject to a holding period (see paragraph 5.1.4.3 “Performance Shares and Share Subscription
Options”).
(2) Following the two-for-one split of the Dassault Systèmes share on July 17, 2014, these 150,000 shares were multiplied by two to increase them to 300,000.
(3) The Board of Directors did not set any quantity of shares to be vested at the date of the availability of the shares granted. See also explanation at paragraph 5.1.5 “Application of
AFEP-MEDEF Code”.
TABLE 8: GRANTS OF SHARE SUBSCRIPTION OR PURCHASE OPTIONS
See paragraph 5.3.2.1 “Dassault Systèmes Subscription Options” below.
TABLE 9: SHARE SUBSCRIPTION OPTIONS GRANTED TO THE TOP TEN EMPLOYEES WHO ARE NOT EXECUTIVE
OFFICERS AND WHO RECEIVED THE MOST SHARE SUBSCRIPTION OPTIONS, AND OPTIONS EXERCISED
BY THESE EMPLOYEES
See paragraph 5.3.2.1 “Dassault Systèmes Subscription Options” below.
TABLE 10: HISTORY OF THE PERFORMANCE SHARES GRANTED
See paragraphs 5.3.2.2 “Performance shares” below.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 175
5 Corporate governance
Summary of the Compensation and Benefi ts Due to Directors
TABLE 11: FOLLOW-UP OF THE AFEP-MEDEF’S RECOMMENDATIONS
As indicated in the table below, Dassault Systèmes SA complies with the main recommendations of the AFEP-MEDEF Code
regarding compensation and benefits granted to executive officers (dirigeants mandataires sociaux).
Employment
agreement
Additional
retirement plan
Indemnities or benefits due
or which may become due in
the event of termination of
or change in present
functions
Indemnities related to
a non-competition
clause
Executive officers
Charles Edelstenne
Chairman of the Board
Director since (1st appointment): 04/08/1993
Term: until the annual General Meeting to be
held in 2018
Bernard Charlès
Chief Executive Officer
Director since (1st appointment): 04/08/1993
Term: until the annual General Meeting to be
held in 2018
Yes
No
X
X
Yes
No
X
Yes
Yes
No
X
X
X
No
X
X
When the term of office of the Chief Executive Officer was
renewed, the Board of Directors, at its meeting on May 26,
2014, authorized, in accordance with the proposal of the
Compensation and Nomination Committee and pursuant
to Article L. 225-42-1 of the French Commercial Code, the
renewal of the agreement relating to the commitments made
by Dassault Systèmes SA in relation to the indemnities which
would be due upon the termination of his functions as Chief
Executive Officer, under the terms adopted by the Board at
its meeting on May 27, 2010. The conditions for payment
and the amount of the indemnities owed are described in
paragraph 5.1.4.2 “Indemnities Due in the Event of the
Imposed Departure (départ contraint) of the Chief Executive
Officer”.
is no specific additional
There
retirement plan (régime
complémentaire de retraite) for the executive officers. The
companies controlled by Dassault Systèmes SA have not paid
any compensation or granted any other benefits to the executive
officers (dirigeants mandataires sociaux) mentioned above.
5.3.2
Interests of Executive Management and Employees
in the Company’s Share Capital
5.3.2.1 Dassault Systèmes Share Subscription
Options
As of December 31, 2014, there were four active shares
subscription options plans for the benefit of certain Company
managers and employees. One share subscription options plan
expired during 2014. The exercise price of stock options granted
pursuant to all the plans was fixed without a discount in relation
to the market value of the Dassault Systèmes SA shares on the
date of grant of the stock options, with the exception of the
2008-01 plan, for which a discount of 3% was applied.
The General Meeting of Shareholders on May 30, 2013
authorized the Board of Directors to grant options to subscribe
or to purchase Company shares for a period of 38 months,
provided that the total of all outstanding stock options does not
give a right to more than 5% of Dassault Systèmes SA’s share
capital. At its meeting on May 26, 2014, the Board of Directors
used this authorization to allocate 312,225 share subscription
options (the “2014-01 Options”) to 122 beneficiaries, the
exercise of which is subject to a performance condition.
The new shares created by the exercise of options between
January 1 and the date of the annual General Meeting of
Shareholders deciding on the allocation of profit related to the
most recently completed financial year are entitled to receive
the dividend distributed with respect to that year. As a result,
the new shares are traded on the same line as the previously
existing shares.
On the other hand, the new shares created as of the day after
the General Meeting of Shareholders do not have a right to
receive this dividend. Those shares are temporarily quoted
on a second trading line until the date the shares trade ex-
dividend (i.e. without the right to receive the dividend to be
distributed on Dassault Systèmes shares).
The following table provides certain information on the
Company’s stock options plans in effect during 2014.
176 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Corporate governance
Summary of the Compensation and Benefi ts Due to Directors
5
GRANTS OF SUBSCRIPTION OR PURCHASE OPTIONS
(Corresponding to Table 8 of the AMF Position-Recommendation no. 2009-16)
Stock option plan
General Meeting
Board of Directors
Total Number of shares to be
subscribed pursuant to Options
exercise before 2-for-1 split
(cid:125) by directors
2006-02
2008-01
2008-02
2010-01
2014-01
Total shares
06/08/2005 05/22/2008 05/22/2008 05/27/2010
05/30/2013
06/06/2007 09/25/2008 11/27/2009 05/27/2010
05/26/2014
Total after
2-for-1
split(1)
1,325,900
1,436,600
1,851,500
1,240,000
312,225
6,166,225 12,332,450
(mandataires sociaux)
150,000
150,000
170,000
110,000
–
50,000
100,000
–
50,000
100,000
–
50,000 (2)
120,000
–
50,000 (2)
60,000
–
–
–
–
580,000 1,160,000
-
-
200,000
380,000
400,000
760,000
Charles Edelstenne
Bernard Charlès
Thibault de Tersant
Starting point for exercising
the options
Expiry date
Exercise price in euro
(before 2-for-1 split) (3)
Modalities of exercise
Cumulative n umber of shares
subscribed pursuant to options
exercised as of 12/31/2014
Cumulative n umber of options
canceled or null and void
as of 12/31/2014
Number of shares subscribed
pursuant to options exercised
between 01/01/2015 and
02/28/2015
Number of options canceled
or null and void between
01/01/15 and 02/28/2015
Number of options outstanding
as of 02/28/2015
Number of shares subscribed
pursuant to options exercised
as of 02/28/2015
06/07/2010 09/25/2009 11/27/2013 05/27/2014
02/21/2016
06/05/2014 09/24/2015 11/26/2017 05/26/2018
05/25/2022
47.50 (3)
38.15 (3)
39.00 (3)
47.00 (3)
91.00 (3)
(4)
5
1, 175, 033
869, 502.5
649, 879
274, 256
- 2, 968, 671 5, 937, 341
150, 867
137, 582
155, 000
429,515.5
1,046,621
103,100
862,644
22,300
568,849 1,137,698
289,925 2,628,705,5 5,257,411
-
-
-
-
73,557.5
91,538
70,515
-
235,611
471,221
-
-
-
4,000
-
-
355,958
955,083
792,129
285,925
2,103,170 4,206,340
-
943,060
741,417
344,771
- 2,029,248 4,058,496
(1) The figures in this column reflect the two-for-one split of the Dassault Systèmes share effective on July 17, 2014 and the correlative multiplication of the number of shares by two .
(2) The options granted to the Chief Executive Officer are subject to performance conditions related to his variable compensation actually paid out over three years.
(3) Since the two-for-one split of the Dassault Systèmes share effective on July 17, 2014, each of these options entitles the holder to two new Dassault Systèmes shares of a par value
of €0.50 each.
(4) The 2014-01 options are exercisable by one-third tranches as from February 21, 2016, February 21, 2017 and February 21, 2018, respectively, provided that the beneficiary
remains with the Company and fulfills the performance conditions.
For information regarding the dilutive effect on share capital
by the exercise of options, see also paragraph 6.2.1 “Share
Capital at February 28, 2015”.
At December 31, 2014, the only Company directors
(mandataires sociaux) owning such share subscription options
were Bernard Charlès and Thibault de Tersant.
For information regarding the equity interests in Dassault
Systèmes SA of the directors (mandataires sociaux), see
paragraphs 5.1.1 “Composition and Practices of the Board of
Directors” and 6.3 “Information about the Shareholders” in
this Annual Report (Document de référence).
DASSAULT SYSTÈMES ANNUAL REPORT 2014 177
5 Corporate governance
Summary of the Compensation and Benefi ts Due to Directors
SUBSCRIPTION AND PURCHASE OPTIONS OF THE TOP TEN EMPLOYEES WHO ARE NOT EXECUTIVE OFFICERS
AND THE OPTIONS THEY EXERCISED DURING 2014
(Corresponding to Table 9 of the AMF Position-Recommendation no. 2009-16)
The following table sets forth, on a global basis, the total number and weighted average exercise price of shares subscribed by
the ten Company employees who exercised the largest number of Company stock options during 2013 and who are not directors
of the Company.
Total
number of
options *
Average
weighted price
per option
Plan no.
2006-01
Plan no.
2006-02
Plan no.
2008-01
Plan no.
2008-02
Plan no.
2014-01
Stock options granted in 2014 to the ten
employees who received the largest number
of stock options
Stock options exercised in 2014 by the ten
employees who exercised the largest
number of stock options
259,000
33.17
–
–
–
–
259,000
403,500
42,88
66,000
10,000
201,000
126,500
–
*
Following the two-for-one split of the Dassault Systèmes share on July 17, 2014, each option entitles the holder to two Dassault Systèmes shares.
5.3.2.2
Performance shares
The General Meeting of Shareholders of May 30, 2013,
authorized the Board of Directors to grant Dassault
Systèmes SA shares during a 38-month period, representing
up to 2% of Dassault Systèmes SA’s capital at the date of
the General Meeting (i.e. up to 2,511,449 shares, that is
5,022,998 shares after the two-for-one split of the Dassault
Systèmes share effective on July 17, 2014).
The Board meeting of February 21, 2014 used this
authorization to grant 529,940 performance shares (this
number was multiplied by two to increase it to 1,059,880
performance shares following the aforementioned two-
for-one split) under a plan called “2014-A” in favor of 917
beneficiaries, and 150,000 “2014-B” shares (this number
was multiplied by two to increase it to 300,000 following
the aforementioned two-for-one split) in favor of the Chief
Executive Officer (see paragraph 5.1.4.3 “Performance Shares
and Share Subscription Options”).
The following tables provide certain information on the
Company’s performance shares plans in effect during 2014.
178 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Corporate governance
Summary of the Compensation and Benefi ts Due to Directors
5
HISTORY OF PERFORMANCE SHARES GRANTED
(Corresponding to Table 10 of the AMF Position- Recommendation no. 2009-16)
Following the two-for-one split of the Dassault Systèmes share on July 17, 2014, the number of granted shares that are being
vested or that have been vested and are currently locked-in were multiplied by two.
Plan Number
General Meeting
2010-02 Plan
– France
2010-02 Plan
– International
2010-04 Plan
– France
2010-04 Plan
– International
2014-A
Totals after
2-for-1 split(1)
Total
05/27/2010
05/27/2010
05/27/2010
05/27/2010
05/30/2013
Date of the Board meeting
09/29/2011
09/29/2011
09/07/2012
09/07/2012
02/21/2014
Total number of shares
granted, including the
number granted to:
(cid:125) to directors
(mandataires sociaux)
Charles Edelstenne
Bernard Charlès
Thibault de Tersant
348,000 (2)
58,400 (2)
366,575 (2)
172,655 (2)
529,940
1,475,570
2,951,140
31,000
–
14,000 (3 )
17,000
–
–
–
31,000
–
14,000 (3 )
17,000
–
–
–
–
20,000
82,000
164,000
–
–
20,000
–
28,000 (3)
54,000
–
56,000 (3)
108,000
Vesting date of shares
09/29/2014
09/29/2015
09/07/2015
09/07/2016
02/21/2018
Date of end of holding period
09/29/2016
none
09/07/2017
none
none
Performance conditions
See Note (4)
See Note (4)
See Note (5)
See Note (5)
See Note (6)
Number of shares vested
as at 03/20/2015
Total number of shares
cancelled or lapsed
as at 12/31/2014
Performance shares
remaining at the end
of financial year
Performance shares
remaining at the end of
financial year after 2-for-1
split of the par value (1)
294,000
–
375
–
–
294,375
588,750
16,500
17,450
15,625
28,000
9,200
86,775
173,550
-
-
78,450
350,575
144,655
520,740
1,094,420
2,188,840
156,900
701,150
289,310
1,041,480
2,188,840
(1) The figures in this column or this line reflect the two-for-one split of the Dassault Systèmes share par value on July 17, 2014 and the correlative multiplication of the number of
shares by two .
(2) In the event of international mobility, the beneficiaries of the France Plan may be transferred under certain conditions to the International Plan and vice versa during the vesting
period. Therefore, the total number of vested shares under the France or International Plans may differ from the number of shares originally granted under these plans.
(3) The shares granted to the Chief Executive Officer are subject to an additional performance condition in relation to his variable compensation actually paid with respect to three
financial years set forth in the regulations of the plan in question, the amount of which is itself dependent on achieving performance criteria previously established by the Board
of Directors of Dassault Systèmes SA.
(4) The 2010-02 Shares will be fully vested at the end of the vesting period applicable to the beneficiary, provided the beneficiary remains with the Company and satisfaction of a
performance condition, which is measured according to the non-IFRS diluted earnings per share actually realized compared to the high end of the range set for Dassault Systèmes’
EPS objective as published for each of the 2011, 2012 and 2013 financial years.
(5) The 2010-04 Shares will be fully vested at the end of the vesting period applicable to the beneficiary, provided the beneficiary remains with the Company and satisfaction of a
performance condition, which is measured according to the non-IFRS diluted earnings per share actually realized compared to the high end of the range set for Dassault Systèmes’
EPS objective as published for each of the 2012, 2013 and 2014 financial years.
(6) The 2014-A Shares will be fully vested at the end of the vesting period, provided the beneficiary remains with the Company and fulfils each year over a three-year period at least
one of the following performance conditions: the increase in non-IFRS diluted earnings per share of the Dassault Systèmes Group in relation to the one in 2014 or if the Dassault
Systèmes share outperforms the CAC 40 index .
5
DASSAULT SYSTÈMES ANNUAL REPORT 2014 179
5 Corporate governance
Summary of the Compensation and Benefi ts Due to Directors
HISTORY OF THE SHARES GRANTS TO THE CHIEF EXECUTIVE OFFICER IN RESPECT OF THE GRADUAL PROCESS OF
ASSOCIATING THE CHIEF EXECUTIVE OFFICER WITH THE COMPANY SHARE CAPITAL
(See also paragraph 5.1.4.3 “Performance Shares and Share Subscription Options”)
Following the two-for-one split of the Dassault Systèmes share on July 17, 2014, the number of granted shares that are being
vested or that have been vested and are currently locked-in were multiplied by two.
Plan Details
General Meeting
2009
2010
2010-03
2010-05
2014-B
06/06/2007
05/27/2010
05/27/2010
05/27/2010
05/30/2013
Date of the Board meeting
11/27/2009
05/27/2010
09/29/2011
09/07/2012
02/21/2014
Total number of shares granted to Bernard Charlès
(before 2-for-1 split of the par value)
Vesting date of shares
Date of end of holding period (1)
Performance conditions
150,000
150,000
150,000
150,000
150,000
11/27/2011
05/27/2012
09/29/2013
09/07/2014
02/21/2018
11/27/2013
05/27/2014
09/29/2015
09/07/2016
02/21/2018
See Note (2)
See Note (3)
See Note (4)
See Note (5)
See Note (6)
Number of shares vested as at 03/20/2015
150,000
150,000
150,000
150,000
–
Number of shares vested as at 03/20/2015 after the
2-for1 split of the par value (7)
300,000
300,000
300,000
300,000
(1) Non applicable to the shares subject to the legal lock-up commitment set by the Board of Directors (see paragraph 5.1.4.3 “Performance Shares and Shares Subscription Options”).
(2) Performance condition related to variable compensation actually paid to the Chief Executive Officer with respect to the 2009 and 2010 financial years, the amount of which is itself
dependent on achieving performance criteria previously established by the Board.
(3) Performance condition related to variable compensation actually paid to the Chief Executive Officer with respect to the 2010 and 2011 financial years, the amount of which is itself
dependent on achieving performance criteria previously established by the Board.
(4) Performance condition related to variable compensation actually paid to the Chief Executive Officer with respect to the 2011 and 2012 financial years, the amount of which is itself
dependent on achieving performance criteria previously established by the Board.
(5) Performance condition related to variable compensation actually paid to the Chief Executive Officer with respect to the 2012 and 2013 financial years, the amount of which is itself
dependent on achieving performance criteria previously established by the Board.
(6) The same performance condition as that stipulated for the 2014-A performance shares granted by the Board on the same day to certain employees of the Group (see paragraph 5.1.4.3
“Performance Shares and Share Subscription Options”).
(7) The figures in this line reflect the two-for-one split of the Dassault Systèmes share par value on July 17, 2014 and the correlative multiplication of the number of shares by two .
180 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Corporate governance
Transactions in the Company’s Shares by the Management of the Company
5
5.4 Transactions in the Company’s Shares
by the Management of the Company
Pursuant to Article 223-26 of the AMF’s General Regulations, the table below shows transactions involving securities issued by
Dassault Systèmes SA carried out by directors or executive officers of the Company, or by persons related to them (according to
Article R. 621-43-1 of the French Monetary and Financial Code).
Date
and place
Directors and Executive Officers
Nature of the transaction
Unit price
(in euros)
Gross amount
(in euros)
02/11/2014
Over the counter market
Physical person associated
with Serge Dassault
02/11/2014
Over the counter market
Physical person associated
with Serge Dassault
Sale of other types of financial instruments
4.44
88,888.00
Acquisition other types of financial instruments
3.40
68,000.00
02/12/2014
Euronext Paris
02/12/2014
Euronext Paris
02/12/2014
Euronext Paris
02/12/2014
Euronext Paris
Thibault de Tersant
E xercise of share subscription options
47.50
237,500.00
Thibault de Tersant
Sale of shares
82.40
411,998.91
Thibault de Tersant
E xercise of share subscription options
38.15
572,250.00
5
Thibault de Tersant
Sale of shares
82.46 1,236,831.38
02/14/2014
Over the counter market
Physical person associated
with Serge Dassault
02/14/2014
Over the counter market
Physical person associated
with Serge Dassault
02/18/2014
Over the counter market
Physical person associated
with Serge Dassault
02/21/2014
Over the counter market
Physical person associated
with Serge Dassault
02/21/2014
Over the counter market
Physical person associated
with Serge Dassault
02/21/2014
Over the counter market
Physical person associated
with Serge Dassault
02/25/2014
Over the counter market
Physical person associated
with Serge Dassault
02/25/2014
Over the counter market
Physical person associated
with Serge Dassault
02/25/2014
Over the counter market
Physical person associated
with Serge Dassault
02/25/2014
Over the counter market
Physical person associated
with Serge Dassault
02/25/2014
Over the counter market
Physical person associated
with Serge Dassault
02/28/2014
Over the counter market
Physical person associated
with Serge Dassault
02/28/2014
Over the counter market
Physical person associated
with Serge Dassault
02/28/2014
Over the counter market
Physical person associated
with Serge Dassault
02/28/2014
Over the counter market
Physical person associated
with Serge Dassault
02/28/2014
Over the counter market
Physical person associated
with Serge Dassault
Acquisition other types of financial instruments
8.50
340,000.00
Sale of other types of financial instruments
7.08
283,200.00
Acquisition other types of financial instruments
8.10
324,000.00
Sale of other types of financial instruments
4.52
90,480.00
Sale of other types of financial instruments
6.08
243,080.00
Acquisition other types of financial instruments
8.34
333,440.00
Acquisition other types of financial instruments
2.00
40,000.00
Share subscription
84.54 3,381,600.00
Acquisition other types of financial instruments
9.46
378,400.00
Sale of other types of financial instruments
2.96
59,280.00
Sale of other types of financial instruments
3.03
60,680.00
Acquisition other types of financial instruments
2.07
82,800.00
Sale of other types of financial instruments
2.95
117,920.00
Sale of other types of financial instruments
1.92
38,340.00
Acquisition other types of financial instruments
9.87
394,800.00
Acquisition of shares
83. 28
3,331,200
DASSAULT SYSTÈMES ANNUAL REPORT 2014 181
5 Corporate governance
Transactions in the Company’s Shares by the Management of the Company
Date
and place
Directors and Executive Officers
Nature of the transaction
Unit price
(in euros)
Gross amount
(in euros)
03/03/2014
Over the counter market
Physical person associated
with Serge Dassault
03/03/2014
Over the counter market
Physical person associated
with Serge Dassault
03/03/2014
Over the counter market
Physical person associated
with Serge Dassault
03/03/2014
Over the counter market
Physical person associated
with Serge Dassault
03/05/2014
Over the counter market
Physical person associated
with Serge Dassault
03/05/2014
Over the counter market
Physical person associated
with Serge Dassault
03/05/2014
Over the counter market
Physical person associated
with Serge Dassault
03/05/2014
Over the counter market
Physical person associated
with Serge Dassault
03/07/2014
Over the counter market
Physical person associated
with Serge Dassault
03/07/2014
Over the counter market
Physical person associated
with Serge Dassault
03/11/2014
Over the counter market
Physical person associated
with Serge Dassault
03/11/2014
Over the counter market
Physical person associated
with Serge Dassault
03/11/2014
Over the counter market
Physical person associated
with Serge Dassault
03/13/2014
Over the counter market
Physical person associated
with Serge Dassault
03/14/2014
Over the counter market
Physical person associated
with Serge Dassault
03/14/2014
Over the counter market
Physical person associated
with Serge Dassault
03/14/2014
Over the counter market
Physical person associated
with Serge Dassault
03/14/2014
Over the counter market
Physical person associated
with Serge Dassault
Sale of other types of financial instruments
9.87
394,720.00
Sale of other types of financial instruments
3.75
75,020.00
Acquisition other types of financial instruments
3.74
74,812.00
Acquisition other types of financial instruments
9.74
389,624.00
Sale of other types of financial instruments
10.01
400,360.00
Sale of other types of financial instruments
2.79
55,740.00
Acquisition other types of financial instruments
10.69
427,680.00
Acquisition other types of financial instruments
0.69
13,840.00
Sale of other types of financial instruments
8.85
353,800.00
Acquisition other types of financial instruments
9.56
382,400.00
Sale of other types of financial instruments
2.91
58,240.00
Sale of other types of financial instruments
6.57
262,840.00
Acquisition other types of financial instruments
8.03
321,080.00
Sale of other types of financial instruments
2.51
50,260.00
Acquisition other types of financial instruments
6.46
258,520.00
Acquisition other types of financial instruments
0.13
5,120.00
Sale of other types of financial instruments
5.49
219,760.00
Sale of other types of financial instruments
3.29
131,640.00
04/29/2014
Euronext Paris
04/29/2014
Euronext Paris
Bernard Charlès
E xercise of share subscription options
47.50 1,425,000.00
Thibault de Tersant
E xercise of share subscription options
38.15
144,970.00
04/30/2014
Over the counter market
Physical person associated
with Serge Dassault
04/30/2014
Over the counter market
Physical person associated
with Serge Dassault
04/30/2014
Over the counter market
Physical person associated
with Serge Dassault
Sale of other types of financial instruments
2.11
42,240.00
Sale of other types of financial instruments
3.21
128,240.00
Acquisition other types of financial instruments
2.40
95,840.00
04/30/2014
Euronext Paris
04/30/2014
Euronext Paris
04/30/2014
Euronext Paris
04/30/2014
Euronext Paris
Thibault de Tersant
E xercise of share subscription options
47.50
237,500.00
Thibault de Tersant
E xercise of share subscription options
38.15
572,250.00
Thibault de Tersant
Sale of shares
Thibault de Tersant
Sale of shares
87.74
438,697.60
87.56 1,313,369.41
182 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Corporate governance
Transactions in the Company’s Shares by the Management of the Company
5
Date
and place
05/02/2014
Euronext Paris
05/02/2014
Euronext Paris
Directors and Executive Officers
Nature of the transaction
Unit price
(in euros)
Gross amount
(in euros)
Philippe Forestier
E xercise of share subscription options
38.15
381,500.00
Philippe Forestier
Sale of shares
88.58
885,821.98
05/05/2014
Over the counter market
Physical person associated
with Serge Dassault
05/07/2014
Over the counter market
Physical person associated
with Serge Dassault
05/07/2014
Over the counter market
Physical person associated
with Serge Dassault
05/07/2014
Over the counter market
Physical person associated
with Serge Dassault
05/12/2014
Over the counter market
Physical person associated
with Serge Dassault
05/12/2014
Over the counter market
Physical person associated
with Serge Dassault
Sale of other types of financial instruments
1.71
34,160.00
Acquisition other types of financial instruments
0.87
34,680.00
Sale of other types of financial instruments
1.46
29,260.00
Sale of other types of financial instruments
2.09
83,640.00
Sale of other types of financial instruments
1.59
31,880.00
Sale of other types of financial instruments
1.30
25,940.00
05/14/2014
Euronext Paris
05/14/2014
Euronext Paris
Bruno Latchague
E xercise of share subscription options
39.00
550,836.00
Bruno Latchague
Sale of shares
90.50 1,278,222.00
5
05/14/2014
Over the counter market
Physical person associated
with Serge Dassault
05/14/2014
Over the counter market
Physical person associated
with Serge Dassault
05/16/2014
Over the counter market
Physical person associated
with Serge Dassault
05/16/2014
Over the counter market
Physical person associated
with Serge Dassault
05/16/2014
Over the counter market
Physical person associated
with Serge Dassault
Sale of other types of financial instruments
1.26
25,200.00
Sale of other types of financial instruments
1.64
32,800.00
Sale of other types of financial instruments
1.70
50,880.00
Sale of other types of financial instruments
1.65
49,470.00
Sale of other types of financial instruments
1.12
33,540.00
05/20/2014
Euronext Paris
05/20/2014
Euronext Paris
Bruno Latchague
E xercise of share subscription options
39.00
660,933.00
Bruno Latchague
Sale of shares
90.51 1,533,878.44
05/20/2014
Over the counter market
Physical person associated
with Serge Dassault
05/20/2014
Over the counter market
Physical person associated
with Serge Dassault
05/20/2014
Over the counter market
Physical person associated
with Serge Dassault
Acquisition other types of financial instruments
1.73
69,200.00
Sale of other types of financial instruments
3.40
136,000.00
Sale of other types of financial instruments
1.83
36,600.00
05/21/2014
Euronext Paris
05/21/2014
Euronext Paris
05/22/2014
Euronext Paris
05/22/2014
Euronext Paris
Bruno Latchague
E xercise of share subscription options
39.00
465,231.00
Bruno Latchague
Sale of shares
90.54 1,080,081.87
Bruno Latchague
E xercise of share subscription options
39.00 1,053,000.00
Bruno Latchague
Sale of shares
90.73 2,449,697.53
05/23/2014
Over the counter market
Physical person associated
with Serge Dassault
05/23/2014
Over the counter market
Physical person associated
with Serge Dassault
05/23/2014
Over the counter market
Physical person associated
with Serge Dassault
Acquisition other types of financial instruments
2.35
93,840.00
Sale of other types of financial instruments
3.28
131,120.00
Sale of other types of financial instruments
2.01
40,200.00
DASSAULT SYSTÈMES ANNUAL REPORT 2014 183
5 Corporate governance
Transactions in the Company’s Shares by the Management of the Company
Date
and place
05/27/2014
Euronext Paris
05/27/2014
Euronext Paris
Directors and Executive Officers
Nature of the transaction
Unit price
(in euros)
Gross amount
(in euros)
Pascal Daloz
E xercise of share subscription options
47.50 1,900,000.00
Pascal Daloz
Sale of shares
91.00 3,640,000.00
06/03/2014
Over the counter market
Physical person associated
with Serge Dassault
06/03/2014
Over the counter market
Physical person associated
with Serge Dassault
Sale of other types of financial instruments
1.74
69,440.00
Sale of other types of financial instruments
1.70
68,040.00
06/03/2014
Euronext Paris
06/03/2014
Euronext Paris
06/04/2014
Euronext Paris
06/04/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
06/25/2014
Euronext Paris
07/29/2014
Euronext Paris
07/29/2014
Euronext Paris
Thibault de Tersant
E xercise of share subscription options
38.15
381,500.00
Thibault de Tersant
Sale of shares
93.24
932,370.82
Sylvain Laurent
E xercise of share subscription options
47.00
376,000.00
Sylvain Laurent
Sale of shares
93.00
744,000.00
Bernard Charlès
Reinvestment of dividends in shares
88.66
15,870.14
Bernard Charlès
Reinvestment of dividends in shares
88.66
558,823.98
Bernard Charlès
Reinvestment of dividends in shares
88.66
44,152.68
Bernard Charlès
Reinvestment of dividends in shares
88.66
2,571.14
Bernard Charlès
Reinvestment of dividends in shares
88.66
14,096.94
Bernard Charlès
Reinvestment of dividends in shares
88.66
265.98
Charles Edelstenne
Charles Edelstenne
Jean-Pierre Chahid-Nouraï
Laurence Barthès
Legal entity associated
with Charles Edelstenne
Legal entity associated
with Charles Edelstenne
Legal entity associated
with Charles Edelstenne
New shares’ subscriptions through the option
to receive payment of dividend in shares
New shares’ subscriptions through the option
to receive payment of dividend in shares
New shares’ subscriptions through the option
to receive payment of dividend in shares
New shares’ subscriptions through the option
to receive payment of dividend in shares
New shares’ subscriptions through the option
to receive payment of dividend in shares
New shares’ subscriptions through the option
to receive payment of dividend in shares
New shares’ subscriptions through the option
to receive payment of dividend in shares
Legal entity associated
with Charles Edelstenne
New shares’ subscriptions through the option
to receive payment of dividend in shares
88.66 2,405,168.48
88.66 1,304,277.26
88.66
620.62
88.66
1,507.22
88.66
88.66
88.66
88.66
88.66
709.28
88.66
709.28
Physical person associated
with Bernard Charlès
Serge Dassault
Thibault de Tersant
Reinvestment of dividends in shares
88.66
60,111.48
New shares’ subscriptions through the option
to receive payment of dividend in shares
New shares’ subscriptions through the option
to receive payment of dividend in shares
88.66
88.66
88.66
12,501.06
Thibault de Tersant
E xercise of share subscription options
19.08
476,875.00
Thibault de Tersant
Sale of shares
48.76 1,218,943.30
184 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Corporate governance
Transactions in the Company’s Shares by the Management of the Company
5
Date
and place
Directors and Executive Officers
Nature of the transaction
08/18/2014
Over the counter market
Physical person associated
with Serge Dassault
Sale of shares
Unit price
(in euros)
Gross amount
(in euros)
49.69 1,987,600.00
08/18/2014
Over the counter market
Physical person associated
with Serge Dassault
Acquisition other types of financial instruments
2.69
107,600.00
08/20/2014
Over the counter market
Physical person associated
with Serge Dassault
Sale of shares
49.77 1,990,800.00
08/21/2014
Over the counter market
Physical person associated
with Serge Dassault
08/26/2014
Over the counter market
Physical person associated
with Serge Dassault
Acquisition other types of financial instruments
2.27
90,800.00
Acquisition other types of financial instruments
2.76
165,600.00
08/26/2014
Over the counter market
Physical person associated
with Serge Dassault
Sale of shares
50.26 3,015,600.00
09/08/2014
Over the counter market
Physical person associated with
Nicole Dassault
09/08/2014
Over the counter market
Physical person associated with
Nicole Dassault
Sale of other types of financial instruments
2.17
173,600.00
Acquisition other types of financial instruments
2.17
173,600.00
10/29/2014
Euronext Paris
10/29/2014
Euronext Paris
11/24/2014
Euronext Paris
11/24/2014
Euronext Paris
Thibault de Tersant
E xercise of share subscription options
19.08
953,750.00
Thibault de Tersant
Sale of shares
48.83 2,491,484.53
Laurence Barthès
E xercise of share subscription options
23.50
940,000.00
Laurence Barthès
E xercise of share subscription options
19.50 1,560,000.00
5
TRANSACTIONS MADE BY GIMD, A LEGAL ENTITY AFFILIATED WITH MARIE-HÉLÈNE HABERT AND NICOLE DASSAULT,
DIRECTORS OF DASSAULT SYSTÈMES SA
Date and place
20/01/14
Over the counter market
29/01/14
Over the counter market
29/01/14
Over the counter market
29/01/14
Over the counter market
29/01/14
Over the counter market
17/02/14
Over the counter market
28/05/14
Over the counter market
06/25/2014
Over the counter market
Nature of the transaction
Unit Price
Gross amount
Sale of other types of financial instruments
Sale of other types of financial instruments
Sale of other types of financial instruments
Acquisition of other types of financial instruments
Acquisition of other types of financial instruments
0.85
0.83
0.83
0.46
0.46
38,250
37,350
24,900
20,700
13,800
Sale of other types of financial instruments
0.6372
28,674
Sale of other types of financial instruments
1.2207
24,414
Share subscription
88.66 43,387,455.54
DASSAULT SYSTÈMES ANNUAL REPORT 2014 185
5 Corporate governance
Statutory Auditors
5.5 Statutory Auditors
Principal Statutory Auditors
PricewaterhouseCoopers Audit, member of the Compagnie
Régionale des Commissaires aux Comptes de Versailles, 63,
rue de Villiers – 92200 Neuilly-sur-Seine, represented by
Pierre Marty, whose first mandate began on June 8, 2005
and was renewed on May 26, 2011 for a period of six fiscal
years expiring at the General Meeting of Shareholders
approving the financial statements for the fiscal year ending
on December 31, 2016.
Ernst & Young et Autres, member of the Compagnie Régionale
des Commissaires aux Comptes de Versailles, 1/2, place des
Saisons – 92400 Courbevoie – Paris-La Défense 1, represented
by Jean-François Ginies, was appointed on May 27, 2010 to
replace Ernst & Young Audit; this mandate will expire at the
General Meeting of Shareholders approving the financial
statements for the fiscal year ending on December 31, 2015.
Deputy Statutory Auditors
Yves Nicolas, 63, rue de Villiers – 92200 Neuilly-sur-Seine,
whose mandate began on May 26, 2011 for a period of six
fiscal years expiring at the General Meeting of Shareholders
approving the financial statements for the fiscal year ending
on December 31, 2016.
The company Auditex, 1/2, place des Saisons –
92400 Courbevoie – Paris-La Défense 1, whose mandate
was renewed on May 27, 2010 and will expire at the General
Meeting of Shareholders approving the financial statements
for the fiscal year ending on December 31, 2015.
Principal Auditors’ fees and services
The following table presents the amount of fees paid to each of the Company’s principal Statutory Auditors in 2014 and 2013:
(in thousands, excluding VAT)
2014
2013
2014
2013
2014
2013
2014
2013
PricewaterhouseCoopers Audit
Ernst & Young et Autres
Amount
%
Amount
%
Audit
Audit opinion, review of statutory and
consolidated financial statements (1):
(cid:125) issuer
(cid:125) other consolidated subsidiaries
Other audit-related services (2):
(cid:125) issuer
(cid:125) other consolidated subsidiaries
SUBTOTAL
Other services (3)
Legal, tax, social
SUBTOTAL
TOTAL
€1,065
€1,034
1,390
1,248
512
167
72
20
3,134
2,374
136
136
35
35
33%
42%
16%
5%
96%
4%
4%
43%
52%
3%
1%
99%
1%
1%
€228
342
49
1
€227
253
637
12
620
1,129
717
717
86
86
17%
25%
4%
0%
46%
54%
54%
19%
21%
52%
1%
93%
7%
7%
€3,270
€2,409
100%
100%
€1,337
€1,215
100%
100%
(1) Audit fees consist of fees billed for the annual audit services engagement and other audit services for the years ended December 31, 2014 and 2013, which are those services that
only the Statutory Auditor reasonably can provide, and include the Group audit, statutory audits, consents, attest services, and services provided in connection with documents
filed with the AMF.
(2) Audit-related fees generally consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial
statements or that are traditionally performed by the Statutory Auditor, and include due diligence services related to acquisitions, consultations concerning financial accounting
and reporting standards, attestation services not required by statute or regulation, and information system reviews. In 2014 and 2013, they primarily included fees related to
certain acquisitions.
(3) Fees billed by members of the Statutory Auditors’ respective networks to consolidated subsidiaries are related to the support in the execution of software licensing reviews and to
local and international tax compliance services, including the review of tax returns and tax services regarding statutory, regulatory or administrative developments and expatriate
tax assistance and compliance.
186 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
6
INFORMATION ABOUT
DASSAULT SYSTÈMES SA,
THE SHARE CAPITAL AND
THE OWNERSHIP STRUCTURE
CONTENTS
6.1. Information about Dassault
6.3 Information about the Shareholders 196
Systèmes SA
6.1.1 General Information
6.1.2 Memorandum and Specific By-Law Provisions
188
188
189
6.3.1 Shareholder Base and Double Voting Rights
6.3.2 Controlling Shareholder
6.3.3 Shareholder Agreements
6.2 Information about the Share Capital 192
6.4 Stock Market Information
196
198
199
200
6.2.1 Share Capital at February 28, 2015
6.2.2 Potential Share Capital
6.2.3 Changes in Dassault Systèmes SA Share Capital
over the Past Three Years
6.2.4 Delegations and Authorizations Granted
to the Board of Directors by the General Meetings
of Shareholders
6.2.5 Stock Repurchase Programs
192
192
193
193
195
DASSAULT SYSTÈMES ANNUAL REPORT 2014 187
6 Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about Dassault Systèmes SA
6.1.
Information about Dassault Systèmes SA
6.1.1 General Information
6.1.1.1
Commercial Name and Registered
Office
Dassault Systèmes
10, rue Marcel Dassault – 78140 Vélizy-Villacoublay, France
Telephone: +33 (0)1 61 62 61 62
6.1.1.2
Legal form – Applicable Law –
Place of Registration and Registration
Number – APE code
Dassault Systèmes SA is a limited liability company (SA) with
a Board of Directors governed by French law. The Company
is registered with the Versailles trade and companies registry
under number 322 306 440. The Company’s APE code is
5829 C.
The Board of Directors of March 21, 2014 approved the
conversion project of Dassault Systèmes SA into a European
company (Societa Europae). The conversion decision subject to
the conclusion of negotiations with employee representatives
on the arrangements for employee involvement in the
European company, will be submitted to the General Meeting
of May 28, 2015 (see paragraphs 5.1.1.2 “Practices of the
Board of Directors” and 7.1 “Presentation of the Resolutions
Proposed by the Board of Directors to the General Meeting on
May 28, 2015”).
(cid:125) to supply and sell computer resources, together or separate
from software or services;
in computer-aided manufacturing and design, product lifecycle
management, collaborative work,
technical databases,
management of manufacturing processes, and software
development tools, as well as in any other related areas and
by any means.
The purpose of the Company shall also be:
(cid:125) the creation, acquisition,
rental and management-
lease of any on-going business, signing leases, and the
establishment and operation of any facilities;
(cid:125) the acquisition, operation or sale of any industrial or
intellectual property rights as well as any knowhow in the
field of computers; and
(cid:125) more generally, taking an interest in any business or
company created or to be created as well as in any legal,
economic, financial, industrial, civil, commercial, personal or
real property enterprise connected directly or indirectly, in
whole or in part, with the purposes above or any similar or
related purposes.
6.1.1.5
Fiscal Year
The 12-month fiscal year covers the period from January 1 to
December 31 of each year.
6.1.1.3 Date of Incorporation and Term
6.1.1.6 Documents on Display
Dassault Systèmes SA’s by-laws, minutes of the General
Meetings and Board of Directors’ reports to the General
Meetings, reports of the Statutory Auditors, financial
statements for the last three years and, more generally,
all documents provided or made available to shareholders
pursuant to the law may be viewed at Dassault Systèmes SA’s
registered office.
Some of these documents are also available on the Group’s
website (www.3ds.com/investors/regulated-information).
Dassault Systèmes SA was incorporated as a limited liability
company (société à responsabilité limitée) on June 9, 1981 for
a 99-year term starting on the date of its registration (until
August 4, 2080). The Company was transformed into a public
limited liability company (société anonyme) on April 8, 1993.
6.1.1.4
Corporate Purpose
Pursuant to Article 2 of the Company’s by-laws, Dassault
Systèmes SA’s corporate purpose, in France and abroad, is:
(cid:125) to develop, produce, market, purchase, sell, rent and provide
after-sale service of computer hardware and/or software;
(cid:125) to supply and provide services to users specifically in the
areas of training, demonstration, methodology, deployment
and utilization;
(cid:125) to supply and provide services of data centers, including to
supply services dedicated to software as a service and to
operate and supply the corresponding infrastructures, and
188 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about Dassault Systèmes SA
6
6.1.2 Memorandum and Specific By-Law Provisions
6.1.2.1 Allocation of Profits
(Article 36 of the Company’s By-Laws)
The profits for each year, less any losses from prior periods,
where appropriate, are first allocated to the reserves as required
by law. A sum of 5% is deducted to form the legal reserve
fund. This deduction ceases to be compulsory when said fund
reaches one-tenth of share capital; it becomes compulsory
once again when the legal reserve falls below this amount.
The distributable profit is composed of the profit from the
year less any losses from prior periods as well as the amounts
allocated to reserves as required by law or the Company’s by-
laws, and increased by retained profits.
The General Meeting then deducts from this distributable
profit the amounts deemed appropriate to allocate to any
optional, ordinary or special reserves or to the retained
earnings account.
As appropriate, any remaining balance is distributed to all
shares proportionately to the unredeemed paid-up value.
However, except in the event of a share capital reduction, no
distribution can be made to shareholders if the equity is, or
would be as a result of the distribution, less than the amount
of the share capital plus the reserves that cannot be distributed
under the law or the by-laws.
The General Meeting may decide to distribute amounts taken
from available reserves, either to pay or increase a dividend,
or distribute a special dividend. In this case, the resolution
explicitly identifies from which reserves these amounts are
to be withdrawn. Nevertheless, the dividends are distributed
in order of priority starting with the distributable profit of
the year.
After the approval of the financial statements by the General
Meeting, any losses are recorded in a special account and
carried forward against the profits of future years, until they
have been eliminated.
In case of stripping of the ownership of the shares, Article 11
of the by-laws reserves for beneficial owners the right to
vote on decisions relating to the allocation of profits (see
paragraph 6.1.2.3 “Shares and Voting Rights” below).
6.1.2.2 General Meetings of Shareholders
Notice and agenda of meeting
(Articles 25 and 26 of the Company’s by-laws)
General Meetings of Shareholders are convened either by
the Board of Directors or, if the Board of Directors fails to
convene a General Meeting, by the Statutory Auditor(s) or by
a representative appointed by the President of the Commercial
Court acting on the request of one or several shareholders
holding together at least one-twentieth of the share capital.
If the General Meeting of May 28, 2015 approves the conversion
of Dassault Systèmes SA into a European company, one or
more shareholders who together hold shares representing at
least 10% of subscribed capital may also, from the date of
registration on the trade and companies registry and of the
companies within Dassault Systèmes SE, request the Board
of Directors to call a General Meeting, specifying the items
they wish to be included on the agenda (see paragraph 7.1
“Presentation of the Resolutions Proposed by the Board of
Directors to the General Meeting on May 28, 2015”).
Notice of the meeting is made through an announcement
placed in a journal of legal notices in the department of the
registered office, and in the French Bulletin of required legal
notices (Bulletin des Annonces Légales Obligatoires – BALO).
Shareholders holding registered shares for at least one month
from the date of the announcement are also notified of all
General Meetings by letter sent by standard mail or, at their
request and expense, by registered letter. The General Meeting
cannot be held less than 15 days after the announcement is
published or the letter is sent to registered holders.
One or more shareholders, representing at least the required
percentage of capital, also have the possibility of requesting
that items and proposed resolutions be added to the agenda in
accordance with applicable law and regulations.
Conditions for admission
(Article 27 of the Company’s by-laws)
Under the Decree of December 8, 2014, which amended
Article R. 225-85 of the French Commercial Code, every
shareholder has the right to participate in General Meetings
either in person or by proxy, provided his/her shares are fully
paid-up and:
(cid:125) for holders of registered shares, that they are held in
a registered account (directly or through a financial
intermediary) at 0:00 a.m. (Paris time) on the second
business day preceding the meeting;
(cid:125) for holders of shares in bearer form, that they are recorded
in a bearer securities account maintained by the accredited
intermediary at 0:00 a.m. (Paris time) on the second
business day preceding the meeting.
A proposal will be submitted to the General Meeting on May 28,
2015 to amend Article 27 of the by-laws in order to take into
account the new book-entry deadline for the shares determining
the right to attend General Meetings (see paragraph 7.1
“Presentation of the Resolutions Proposed by the Board of
Directors to the General Meeting on May 28, 2015”).
The registration of shares in a bearer securities account
maintained by the accredited intermediary shall be validated
by a shareholding certificate (attestation de participation)
issued by the accredited intermediary to the holder of the
6
DASSAULT SYSTÈMES ANNUAL REPORT 2014 189
6 Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about Dassault Systèmes SA
shares. This certificate must be attached to the voting or
proxy form or to the request for an admission card issued in
the shareholder’s name. A certificate can also be issued to
a shareholder who wishes to attend in person the General
Meeting and who has not received an admission card by the
second business day preceding the meeting.
Shareholders may vote by mail using a form that will be sent to
them under the conditions indicated by the notice of meeting.
The form, duly completed and accompanied, as the case may
be, by a shareholding certificate (attestation de participation),
must be received by Dassault Systèmes SA at least three days
before the date of the General Meeting, or it will not be taken
into consideration.
A shareholder may be represented by his/her spouse or by
any other natural or legal person who has been appointed as
proxy, under conditions provided by the law. The shareholders
who are legal entities are represented by the natural persons
duly authorized to represent them with respect to third parties
or by any person to whom the power of proxy has been
transferred.
A shareholder, who is a non-French resident as defined in
Article 102 of the French Civil Code, may be represented at
General Meetings by an accredited intermediary registered
according to applicable legal and regulatory provisions. Such
shareholder will be considered present in calculating the
quorum and the results of voting.
If the Board of Directors so decides when convening the General
Meeting, any shareholder may also participate and vote at
the meeting by video-conference or by any other means of
telecommunications permitting him/her to be identified and
to participate effectively. Such participation must comply with
the conditions and means set forth in the applicable legal and
regulatory provisions. Such shareholder will be accounted for
in calculating the quorum and the results of voting.
Actions needed to amend shareholders’ rights
(Articles 13, 31 and 32 of the Company’s by-laws)
Only an Extraordinary General Meeting can amend
shareholders’ rights in compliance with legal and regulatory
requirements.
Except as may be otherwise provided for under applicable
law and with the exception of reverse share splits carried
out in accordance with the law, no majority may impose on
shareholders an increase in their commitments. If new classes
of shares are created, only an Extraordinary General Meeting
and a special Meeting of Shareholders of the specific class of
shares may approve any amendment to the rights of these
classes of shares.
6.1.2.3
Shares and Voting Rights
Rights, privileges and restrictions attached
to each class of issued shares (Articles 13 and 39
of the Company’s by-laws)
All the shares are of the same class are entitled to, under the
Company’s by-laws, the same rights to the distribution of
profits and any amounts distributed in the event of liquidation
(see also paragraph 6.1.2.1 “Allocation of Profits (Article 36
of the Company’s By-Laws)”). However, a double voting right
is attributed to any fully paid-up share held in registered form
for at least two consecutive years in the name of the same
holder (see paragraph “Double voting rights (Article 29 of the
Company's by-laws)” below).
The new shares created by exercise of shares subscription
options between January 1 and the date of the annual General
Meeting deciding on the distribution of profit from the previous
financial year are entitled to receive the dividend distributed
with respect to that financial year. As a result, the new shares
are traded on the same line as the previously existing shares.
However, the new shares created as from the day after this
annual General Meeting do not have a right to receive this
dividend. Those shares are temporarily quoted on a second
trading line until the date the shares trade ex-dividend (i.e.,
without the right to receive the dividend to be distributed on
Dassault Systèmes shares).
Conditions for exercising voting rights
(Articles 11 and 29 of the Company’s by-laws)
The right to vote attached to shares or dividend-right shares is
proportional to the portion of capital they represent.
Voting is carried out by show of hands, by roll call or secret
ballot, as decided by the secretariat of the meeting or the
shareholders. Shareholders may also vote by mail, by video-
conference or by any other means of communication, as
indicated in the preceding paragraph. In the event of voting by
mail, the voting forms not indicating any vote or expressing an
abstention are considered as “No” votes.
If the General Meeting of May 28, 2015 approves the
conversion of Dassault Systèmes SA into a European company,
in calculating the majority, the valid votes cast, including mail-
in votes, will no longer include those attached to shares for
which the shareholder did not take part in the vote, abstained
or returned a blank or invalid vote .
In case of stripping of the ownership of the shares, the voting
right attached to the share belongs to the bare owner (nu-
propriétaire), except for the decisions relating to the allocation
of profits for which it belongs to the beneficial owner
(usufruitier).
190 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about Dassault Systèmes SA
6
In the event of non-compliance of this requirement, the
shares exceeding the fraction of 2.5% which should have
been declared will lose their voting rights, upon the request
recorded in the minutes of the General Meeting of one or more
shareholders holding a portion of Dassault Systèmes SA share
capital or voting rights equal to at least 2.5% of the capital
or voting rights. The voting rights will be lost for all General
Meetings held until the expiration of two years following the
date on which the required declaration is made.
6.1.2.5
Terms in the Company’s By-Laws,
Charter or Regulation Which Could
Delay, Postpone or Prevent a Change
in Control
Other than the aforementioned double voting right (see
paragraph 6.1.2.3 “Shares and Voting Rights”) and the
reporting obligation when holdings exceed 2.5%
(see
paragraph 6.1.2.4 “Declarations Concerning Crossing of
the Ownership Thresholds (Article 13 of the By-L aws)”),
Article 10 of the by-laws provides that Dassault Systèmes SA
may, at any time and in compliance with legal and regulatory
requirements, request that a central depositary maintaining
the Company’s share register, communicate to it the name (or
corporate name for legal entities), the nationality, the year of
birth or the year of incorporation and the postal and, where
applicable, e-mail address of holders of Dassault Systèmes SA
shares in bearer form which grant, immediately or over time,
the right to vote at General Meetings, as well as the number
of shares held by each of these shareholders and, where
appropriate, any restrictions applicable to such shares.
6.1.2.6
Terms in the Company’s By-Laws
Concerning Modifications in Share
Capital Which Are More Restrictive
than the Law
The by-laws of Dassault Systèmes SA do not contain any
provisions concerning modifications of share capital which are
more restrictive than those provided under the law.
6
Double voting rights (Article 29 of the Company’s by-laws)
Each share gives the right to one vote. Nevertheless, since
2002, a double vote has been awarded to all fully paid-up
shares held in registered form for at least two consecutive
years in the name of the same holder. In the case of a capital
increase by incorporation of reserves, profits or premiums,
this double voting right will be attached on the date of their
issuance to free registered new shares allotted to a shareholder
in consideration for his or her old shares giving rise to
such right.
Under the law, any share converted into a bearer share or
changing hands shall lose the right to the double voting right
except in the case of a transfer from a registered account to
another registered account at inheritance or a gift inter vivos to
a spouse or a relative entitled to succeed to the donor’s estate.
The double voting right may also be cancelled by a resolution
of the shareholders at an Extraordinary General Meeting,
provided the approval of the special Meeting of Shareholders
having a double voting right.
Limitations on voting rights
The by-laws contain no restrictions on the exercise of
voting rights attached to Dassault Systèmes shares except
in the event of stripping of the ownership of the shares (see
paragraph “Conditions for e xercising v oting r ights (Articles 11
and 29 of the Company's by-laws)” above).
6.1.2.4 Declarations Concerning Crossing of
the Ownership Thresholds (Article 13
of the Company’s By-Laws)
In addition to the legal obligation to inform Dassault Systèmes
SA and the AMF in the event a shareholder’s interest passes
the thresholds set out in Article L. 233-7 of the French
Commercial Code, any natural or legal person, acting alone
or in concert with others, who acquires directly or indirectly
shares representing at least 2.5% of Dassault Systèmes’
share capital or voting rights, or a multiple thereof, must
inform Dassault Systèmes SA of the total number of shares or
voting rights which it holds. This information must be sent to
Dassault Systèmes SA by registered letter with return receipt
requested, within four trading days following the date of
acquisition.
This declaration must be made each time the number of shares
held exceeds this threshold of 2.5% (or one of its multiples), up
to 50% (inclusive) of the total number of Dassault Systèmes
SA shares or voting rights, or falls below it. The shareholder
must certify in each declaration that it includes all shares or
voting rights held or owned, in accordance with Article L. 233-
7 et seq. of the French Commercial Code. The declaration must
also indicate the date or dates on which the acquisitions or
divestitures occurred.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 191
6 Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about the Share Capital
6.2
Information about the Share Capital
The General Meeting of May 26, 2014 decided to carry out
a two-for-one stock split of Dassault Systèmes’ shares. The
Board of Directors which took place the same day as the
General Meeting set that the two-for-one stock split would
enter into force on July 17, 2014. Thus, in exchange for
any old share which worth one euro and held on this date,
shareholders were given two new actions which worth €0.50.
6.2.1 Share Capital at February 28, 2015
At February 28, 2015, the Company’s share capital was
comprised of 256,835,298 fully paid-up shares with a
nominal value of €0.50 per share. At December 31, 2014, the
Company’s share capital was €128,182,035.50, divided into
256,364,077 shares.
6.2.2 Potential Share Capital
At February 28, 2015, outstanding share subscription options
(whether or not exercisable) would, if all were exercised, result
in the issuance of 4,808,190 new shares, representing 1.84%
of the Company’s share capital at that date (on a diluted basis).
On the basis of the closing price of the Company’s shares
on February 28, 2015 (€62.53 per share), the exercise of
all exercisable issued options, whose exercise price was less
than that closing price, would have resulted in the issuance of
4,808,190 new shares, representing 1.84% of the Company’s
share capital at that date (on a diluted basis). The dilutive
effect per share at December 31, 2014 is also set forth in Note
11 to the consolidated financial statements.
In connection with the acquisition of the SolidWorks company
in 1997, Dassault Systèmes SA issued shares to the holders of
shares subscription options and warrants issued by SolidWorks
prior to this acquisition. These Dassault Systèmes shares
have historically been held by the Group’s wholly-owned
U.S. subsidiary, SW Securities LLC. No other SolidWorks share
subscription options or warrants remain outstanding at this
time. At December 31, 2014, as at February 28, 2015, SW
Securities LLC held 503,614 shares, or approximately 0.20%
at these dates, of the Company’s share capital. Similar to
treasury shares, the shares held by SW Securities LLC do not
have voting rights and are not eligible for dividends.
Other than the share subscription options granted in connection
with stock option plans and share grants as described in
paragraph 5.3.1 “Compensation of the Company’s Directors
(M andataires S ociaux)” and paragraph 5.3.2 “Interests of
Executive Management and Employees in the Company’s
Share Capital”, there are no other securities giving a right
to subscribe shares of Dassault Systèmes, and there is no
agreement which could result in a capital increase. Dassault
Systèmes SA has not issued any securities which do not
represent an interest in its share capital.
Pledges of shares
To the Company’s knowledge, there was no pledge of Dassault
Systèmes shares in registered form and representing a
significant portion of its share capital as of March 20 , 2015.
Shares held by Dassault Systèmes SA in its subsidiaries and
their businesses (fonds de commerce) are not subject to any
lien. To the Company’s knowledge, no shares of its subsidiaries
which are not held by Dassault Systèmes SA are subject to
any lien.
192 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about the Share Capital
6
6.2.3 Changes in Dassault Systèmes SA Share Capital
over the Past Three Years
Date
Operation
Nominal amount of changes
in share capital
(in euros)
Amount in
share capital
(in euros)
Number of
shares created
or canceled
Total number
of shares
February 29, 2012 Capital increase resulting from the
754,232
123,846,961
754,232
123,846,961
June 30, 2012
exercise of share subscription options
Capital increase resulting from the
exercise of share subscription options
1,188,835
125,035,796
1,188,835
125,035,796
July 25, 2012
Capital increase by contributions in kind
23,412
125,059,208
23,412
125,059,208
August 31, 2012
Capital increase resulting from the
exercise of share subscription options
October 2, 2012
Share capital reduction through
cancellation of treasury shares
131,629
125,190,837
131,629
125,190,837
(643,600)
124,547,237
(643,600)
124,547,237
December 31, 2012 Capital increase resulting from the
549,541
125,096,778
549,541
125,096,778
exercise of share subscription options
February 28, 2013 Capital increase resulting from the
292,488
125,389,266
292,488
125,389,266
June 25, 2013
exercise of share subscription options
Capital increase by a dividend payment
in shares
741,175
126,130,441
741,175
126,130,441
February 28, 2014 Capital increase resulting from the
940,826
127,071,267
940,826
127,071,267
exercise of share subscription options
March 21, 2014
Share capital reduction through
cancellation of treasury shares
June 20, 2014
July 9, 2014
Capital increase by a dividend payment
in shares
Capital increase resulting from the
exercise of share subscription options
(741,175)
126,330,092
(741,175)
126,330,092
802,310
127,132,402
802,310
127,132,402
729,347
127,861,749
729,347
127,861,749
6
July 17, 2014
Split of the share par value by two
-*
127,861,749 127,861,749*
255,723,498
February 28, 2015 Capital increase resulting from the
555,999
128,417,649
1,111,800
256,835,298
exercise of share subscription options
March 20, 2015
Share capital reduction through
cancellation of treasury shares
*
The par value of the share was reduced from €1 to €0.50 on July 17, 2014.
(802,310)
127,615,339
(1,604,620)
255,230,678
The changes in equity resulting from the operations through December 31, 2014 set forth above are included in the “Consolidated
Statements of Shareholders’ Equity” in the consolidated financial statements.
6.2.4 Delegations and Authorizations Granted to the Board
of Directors by the General Meetings of Shareholders
The following table summarizes the delegations and
authorizations granted by the General Meeting to the Board of
Directors and with effect during the 2014 financial year and
as of the date of this Annual Report (Document de référence).
It includes authorizations to increase share capital and to
repurchase and cancel the Company’s own shares.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 193
6 Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about the Share Capital
Resolutions
and General
Meetings
Description of the delegation of authority granted to the Board of Directors
Utilization in 2014
SHARES BUYBACK AND CANCELLATION OF SHARES
12th
resolution
GM of
05/26/2014
13th
resolution
GM of
05/26/2014
Authorization: buy back or purchase Dassault Systèmes shares.
Duration: approximately 12 months (expiring at the GM approving the financial statements for the fiscal
year ended on 12/31/2014).
Cap: 10% of share capital within the limit of €500 million.
See paragraph 6.2.5
“Share buyback
programs”
Authorization: cancel shares purchased under the buyback program.
Duration: approximately 12 months (expiring at the GM approving the financial statements for the fiscal
year ended on 12/31/2014).
Cap: 10% of capital in a 24-month period.
See paragraph 6.2.5
“Share buyback
programs”
ISSUANCE OF SECURITIES
9th resolution
GM of
05/30/2013
10th
resolution
GM of
05/30/2013
11th
resolution
GM of
05/30/2013
13th
resolution
GM of
05/30/2013
14th
resolution
GM of
05/30/2013
Authorization: increase the share capital by issuance of shares or securities giving right to shares of
Dassault Systèmes SA and issue securities giving right to debt securities, with preemptive right of
shareholders.
Duration: 26 months, i.e. until 07/30/2015.
Cap: For a maximum nominal amount of €15 million for shares or securities – For a maximum nominal
amount of €750 million for debt securities.
Authorization: increase the share capital by issuance of shares or securities giving right to shares of
Dassault Systèmes SA and issue securities giving right to debt securities, with waiver of preemptive right
of shareholders, by public offering.
Duration: 26 months, i.e. until 07/30/2015.
Cap: For a maximum nominal amount of €15 million for shares or securities – For a maximum nominal
amount of €750 million for debt securities (to be deducted from the aforementioned overall nominal
limits).
Authorization: increase the share capital and issue securities giving right to debt securities, without
preemptive rights of shareholders, under the delegation referred to in the previous line, by a private
placement, under section II of the Article L. 411-2 of the French Monetary and Financial Code.
Duration: 26 months, i.e. until 07/30/2015.
Cap: To be deducted from the aforementioned overall nominal limit of €15 million (9th resolution).
Authorization: increase the share capital by incorporation of reserves, profits or premiums.
Duration: 26 months, i.e. until 07/30/2015.
Cap: Up to the aforementioned overall nominal limit of €15 million (9th resolution).
Authorization : increase the share capital to remunerate contributions in kind of shares or equity-linked
securities.
Duration: 26 months, i.e. until 07/30/2015.
Cap: 10% of share capital.
ISSUANCE FOR THE BENEFIT OF EMPLOYEES AND EXECUTIVE OFFICERS
Authorization: increase the share capital and issue redeemable subscription or purchase warrants
(BSAAR) to employees and executive officers of Dassault Systèmes SA and its subsidiaries with waiver of
preemptive rights by the shareholders for the benefit of the latter.
Duration: 18 months, i.e. until 11/30/2014.
Cap: For a maximum nominal amount of €6 million to be deducted from the aforementioned overall
nominal limit of €15 million (9th resolution).
None
None
None
None
None
None
Authorization: grant free shares, existing or to be issued, for the benefit of certain employees and/or
executive officers of the Company and its affiliated entities as defined in Article L. 225-197-2 of the
French Commercial Code.
Duration: 38 months, i.e. until 07/30/2016.
Cap: 2% of share capital.
Described in
paragraph 5.3.2.2
“Performance
shares”
Authorization: grant stock options giving right to subscribe to new shares or purchase existing shares for
the benefit of certain employees and/or executive officers of the Company and its affiliated entities as
defined in Article L. 225-180 of the French Commercial Code.
Duration: 38 months, i.e. until 07/30/2016.
Cap: 5% of share capital.
Authorization: increase the share capital for the benefit of members of a corporate savings plan of
Dassault Systèmes SA and its affiliated entities.
Duration: 26 months, i.e. until 07/30/2015.
Cap: For a maximum nominal amount of €5 million to be deducted from the aforementioned overall
nominal limit of €15 million (9th resolution).
None
None
12th
resolution
GM of
05/30/2013
15th
resolution
GM of
05/30/2013
16th
resolution
GM of
05/30/2013
17th
resolution
GM of
05/30/2013
194 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about the Share Capital
6
The authorizations to repurchase the Company’s shares
and to cancel these repurchased shares expire at the end
of the General Meeting to be held on May 28, 2015. It
is thus proposed to this General Meeting to renew these
authorizations (see paragraph 6.2.5.2 “Description of the
Share Repurchase Program Proposed to the General Meeting
on May 28, 2015”). It will also be proposed to renew with
slightly lower cap conditions (€12 million) the delegations
allowing a capital increase and to renew in advance and
under the same conditions, the authorization to grant shares
in order to benefit, if applicable, from the new provisions of
the draft “ Macron” law pertaining to performance shares (see
paragraph 7.1 “Presentation of the Resolutions Proposed by
the Board of Directors to the General Meeting on May 28,
2015”).
6.2.5 Stock Repurchase Programs
6.2.5.1
Transactions carried out by Dassault
Systèmes SA in 2014 and early 2015
As a two-for-one stock split was applied to Dassault Systèmes’
shares on July 17, 2014, the figures concerning the number of
shares and their average prices mentioned in this paragraph
take this split into account, in order to facilitate reading and
comprehension.
During 2014, Dassault Systèmes SA repurchased, under
the authorizations granted to the Board of Directors by the
General Meetings of May 30, 2013 and May 26, 2014,
3,811,652 of its own shares, this figure takes into account the
aforementioned two-for-one stock split.
These shares were repurchased at an average price of €45.04
per share, giving a total cost of €171,660,684.74 (excluding
tax), among which 1,444,890 shares by over the counter
market block trade at an average price per share of €46.28,
for a total cost of €66,876,301.83. The transaction costs paid
by the Company in connection with these shares repurchased
amounted to €61,797.63 all taxes included (plus the tax on
financial transactions for an amount of €343,321.35).
These 3,811,652 shares were allocated to the following
objectives:
(cid:125) cancellation in order to increase the return on equity and
net income per share: 2,451,772 shares;
(cid:125) coverage of the Company’s obligations resulting from
performance share grants: 1,359,880 shares.
The shares purchased before 2014 were used as follows:
(cid:125) 1,482,350 shares, of which 635,198 shares repurchased
before 2014, were canceled by the Board of Directors of
March 21, 2014;
(cid:125) 888,750 shares, which had been allocated to cover the
Company’s obligations resulting from share grants decided
prior to 2014, were transferred to the beneficiaries (see
paragraph 5.3.1 “Compensation of the Company’s Directors
– M andataires S ociaux”).
The Company directly held, on December 31, 2014, 4,267,010
of its own shares of a nominal value of €0.50 each, which had
been repurchased at an average price of €43.84, representing
1.66% of share capital at that date, and which were allocated
either to cancel shares or to cover the Company’s obligations
resulting from performance shares grants.
Transactions carried out since the start of 2015
Pursuant to the authorization granted in 2013, on January 5,
2015, Dassault Systèmes SA signed a liquidity agreement
in accordance with the Code of Ethics of the AFEI (French
association of investment firms) recognized by the AMF, with
Oddo Corporate Finance for an annual amount of €50,000
implemented from January 7, 2015 for an initial period until
December 31, 2015, automatically renewable for subsequent
12-month terms.
Under this liquidity agreement, on March 20, 2015, 666,613
shares were purchased, at an average price of € 56.42 , and
633,835 shares were sold, at an average price of € 57.47 .
The Board meeting of March 20, 2015 used the authorization
granted by the General Meeting of May 26, 2014 by proceeding
with the cancellation of 1,604,620 shares allocated to this
objective.
During 2014 and since the start of 2015, the Company has
not performed any transactions on derivative securities linked
to its shares and has not purchased or sold any of its shares
by exercising them or through the maturity of such derivative
securities.
6.2.5.2 Description of the Share Repurchase
Program Proposed to the General
Meeting on May 28, 2015
Pursuant to Articles 2412 et seq. of the AMF General
Regulation and L. 451-3 of the French Monetary and
Financial Code, and in accordance with European Regulation
no. 2273/2003 of December 22, 2003, this description
relates to the terms and objectives of the Company’s share
repurchase program that will be submitted for approval at the
General Meeting of May 28, 2015.
6
DASSAULT SYSTÈMES ANNUAL REPORT 2014 195
6 Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about the Shareholders
Breakdown of treasury shares as of the date
of this document
On March 20, 2015, the Company holds 2,695,168 of its
own shares directly and 503,614 indirectly. These 2,695,168
shares were allocated to the following objectives:
(cid:125) coverage of the Company’s obligations resulting from share
grants decided in 2011, 2012 and 2014: 2,662,390 shares;
(cid:125) liquidity agreement signed with Oddo Corporate Finance on
January 5, 2015: 32,778 shares.
The purposes 1-4 and 6 above correspond to the terms of
European Regulation no. 2273/2003 of December 22, 2003,
in application of the directive 2003/6/EC of January 28, 2003,
and market practices accepted by the AMF.
The General Meeting of May 28, 2015 will also be asked to
authorize the Board of Directors to cancel, as the case may be,
all or part of the shares which it may repurchase in connection
with the share repurchase program and to carry out the
corresponding reduction in share capital.
Purposes of the new repurchase program
1) Cancel shares in order to increase the return on equity and
net income per share.
2) Provide securities
(representing no more than 5%
of the Company’s share capital) for payment, or for
exchange, particularly in connection with external growth
transactions.
3) Ensure that there is a market or liquidity for the shares of
Dassault Systèmes SA under a liquidity agreement with an
accredited financial service provider, in accordance with a
Code of Ethics recognized by the AMF.
4) Meet obligations related to shares subscription options or
other share grants to employees or directors (mandataires
sociaux) of Dassault Systèmes SA or of an affiliated
company.
5) Meet the Company’s cash obligations based on an increase
in the market price of Dassault Systèmes shares, as made
to employees and directors (mandataires sociaux) of the
Company or of an affiliated company.
6) Provide shares in connection with the exercise of rights
attached to securities providing access to the capital of
Dassault Systèmes SA.
7) Carry out any market practice which may be authorized by
the law or by the AMF.
Maximum proportion of share capital,
maximum number, characteristics of the
securities that the Company proposes to acquire,
and maximum purchase price
The Board of Directors may repurchase Dassault Systèmes
shares representing up to 10% of the Company’s share
capital at the date of the General Meeting authorizing the
program, i.e. 25,683,529 shares at February 28, 2015, the
most recent date for determining the capital as of the date
of this description. The purchase price of the shares would be
capped at €75 per share and subject to the limits stipulated
by the applicable regulations. The maximum amount of the
funds used for the purpose of buying back shares would be
€500 million.
Duration of the share repurchase program
The program would last for 12 months, starting on the
General Meeting of May 28. This authorization should be valid
until the Ordinary General Meeting ruling on the financial
statements for the financial year ending December 31, 2015.
6.3
Information about the Shareholders
6.3.1 Shareholder Base and Double Voting Rights
The table below sets forth certain information concerning
Dassault Systèmes SA’s shareholder base over the last three
fiscal years. Pursuant to AMF recommendation no. 2009-16,
it specifies:
Regulations and used as a denominator by shareholders to
calculate their percentage of shares held and voting rights
for the purposes of regulatory declarations (in particular the
declarations with regards to exceeding the threshold); and
(cid:125) the theoretical or “gross” voting rights, taking into account
the voting rights attached to the shares without voting
rights, in accordance with Article 223-11 of the AMF General
(cid:125) the voting rights that can be exercised at the General
Meeting (“AG” in the table below) or “nets”, not taking into
account shares without voting rights.
196 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about the Shareholders
6
Double voting rights are attributed to all fully paid-up shares
held in nominative form registered in the name of the same
shareholder for at least two years.
The major shareholders of Dassault Systèmes SA do not hold
voting rights which are different from voting rights of other
shareholders (such as double voting rights).
Shareholders
AT DECEMBER 31, 2014
Shares
% of capital
Theoretical
voting rights
% of theoretical
voting rights
Voting rights
exercisable in
the General
Meeting
% of voting
rights
exercisable in
the General
Meeting
Groupe Industriel Marcel Dassault
105,386,646
41.11% 208,709,314
55.04% 208,709,314
Charles Edelstenne(1) and beneficiaries(2)
15,562,944
6.07%
30,978,146
8.17%
30,978,146
Bernard Charlès
Treasury shares
SW Securities LLC(3)
Directors and senior management(4)
Public
TOTAL
AT DECEMBER 31, 2013
2,751,624
4,267,010
503,614
348,474
1.07%(5)
4,719,926
1.24%(5)
4,719,926
1.66%
0.20%
0.14%
4,267,010
503,614
390,618
1.13%
0.13%
0.10%
–
–
390,618
127,543,765
49.75% 129,610,747
34.19% 129,610,747
256,364,077(6)
100% 379,178,925(6)
100% 374,408,301(6)
Groupe Industriel Marcel Dassault
52,193,954
41.12% 103,855,288
55.28% 103,855,288
Charles Edelstenne(1) and beneficiaries(2)
Bernard Charlès
Treasury shares
SW Securities LLC(3)
Directors and senior management(4)
Public
TOTAL
AT DECEMBER 31, 2012
7,739,539
1,174,641
1,413,229
251,807
24,986
6.10%
15,391,802
8.21%
15,391,802
0.93%(5)
1,973,688
1.05%(5)
1,973,688
1.11%
0.20%
0.02%
1,413,229
251,807
39,389
0.75%
0.13%
0.02%
–
–
39,389
64,134,829
50.52%
64,909,781
34.56%
64,909,781
126,932,985
100% 187,866,910
100% 186,201,874
Groupe Industriel Marcel Dassault
51,887,334
41.48%
86,974,668
51.49%
86,974,668
Charles Edelstenne(1) and beneficiaries(2)
Bernard Charlès
Treasury shares
SW Securities LLC(3)
Directors and senior management(4)
Public
TOTAL
7,707,601
1,024,396
899,079
251,807
23,213
6.16%
15,391,790
0.82%(5)
1,467,798
0.71%
0.20%
0.02%
899,079
251,807
35,626
9.11%
0.87%
0.53%
0.15%
0.02%
15,391,790
1,467,798
–
–
35,626
63,303,348
50.61%
63,881,533
37.83%
63,881,533
125,096,778
100% 168,902,301
100% 167,751,415
55.74%
8.27%
1.26%(5)
–
–
0.11%
34.62%
100%
55.78%
8.28%
1.06%(5)
–
–
0.02%
34.88%
100%
51.85%
9.18%
0.87%
–
–
0.02%
38.08%
100%
(1) Including shares held in trust for the benefit of his family and managed by Charles Edelstenne.
(2) At December 31, 2014, Mr Edelstenne held 3,946,266 shares with all ownership rights and 3,296 shares through two family companies which he manages, representing a total
of 1.54% of the capital and 2.09% of the exercisable voting rights, as well as 11,613,382 shares with “usage” rights (usufruit). For the usage rights with respect to these
11,613,382 shares, representing 6.18% of the exercisable voting rights, Mr Edelstenne can only exercise the right to vote on decisions of the General Meeting concerning the
allocation of profits; the holders of the bare property rights (nue-propriété) exercise the right to vote for other resolutions in compliance with Article 11 of the by-laws.
(3) Because SW Securities LLC is a subsidiary of the Company, shares held by SW Securities LLC do not have voting rights.
(4) Excluding Mr Edelstenne and Mr Charlès, “management” includes the officers listed in paragraph 5.1.2 “Group Executive Committee” of this Annual Report (Document de
référence).
(5) For further information, see paragraph 5.4 “Transactions in the Company’s Shares by the Management of the Company”.
(6) The number of shares and voting rights making up the share capital were doubled after the two-for-one stock split applied to Dassault Systèmes’ shares on July 17, 2014.
6
DASSAULT SYSTÈMES ANNUAL REPORT 2014 197
6 Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about the Shareholders
rights amounted
The overall number of voting
to
379,178,925 as at December 31, 2014 (the number of
exercisable voting rights was 374,408,301) and, as at
February 28, 2015, 379,762,592 (with the number of
exercisable voting rights amounting to 374,940,013). The
difference between the number of theoretical and exercisable
voting rights is explained by the treasury shares and shares
controlled by the Company.
MFS Institutional Advisors, Inc. (MFSI) notified Dassault
Systèmes SA, on April 27, 2011, that the holdings of the various
funds it managed, directly or indirectly, had exceeded the
2.5% threshold of the share capital of Dassault Systèmes SA.
MFSI’s parent company, MFS Investment Management
(MFS), notified Dassault Systèmes SA that the funds managed
directly or indirectly by companies within its group, including
MFSI, held more than 2.5% of the Dassault Systèmes SA share
capital as at February 19, 2015 as was the case on March 11,
April 3, April 11, July 21 and July 23, 2014, December 17,
2013 and on September 24, 2012.
To the knowledge of Dassault Systèmes SA, based on
shareholder obligations to declare if they exceed the threshold,
there are no other shareholders (except as indicated above)
who held 2.5% (threshold set forth in the Company’s by-
laws), directly or indirectly, alone or in agreement with other
shareholders or more than 5% of the Company’s share capital
or voting rights at December 31, 2014.
Although Dassault Systèmes SA voluntarily delisted its shares
from NASDAQ in October 2008, it continues to maintain its
ADR (“American Depositary Receipts”) program, which are
still traded on the over-the-counter market (see paragraph 6.4
“Stock Market Information”). On February 28, 2015 there were
7,552,909 American Depositary Shares (“ADS”) outstanding
and the number of recorded ADS holders, holding them either
for themselves or for third parties amounted to 55.
In January 2015, Dassault Systèmes SA commissioned a
survey on the Company’s shares from an external specialized
services provider. According to this survey, institutional
investors holding more than 2,000 shares each numbered 444
and held 42.55% of the Dassault Systèmes SA share capital as
at December 31, 2014.
As at March 20, 2015, Dassault Systèmes SA holds 2,695,168
treasury shares, including 32,778 shares bought during
the buyback program adopted by the General Meeting of
May 26, 2014 and the rest, i.e. 2,662,390 shares within the
framework of a program of earlier buybacks, which represents
approximately 1.04 % of the share capital as at March 20,
2015, with no voting rights or dividend rights being attached
to these shares.
At December 31, 2014, 131,091,778 Dassault Systèmes
shares (i.e. approximately 51.14% of the capital) are held in
registered form; they provide entitlement to 249,639,936
exercisable voting rights (i.e. approximately 66.67% of the
gross voting rights).
In accordance with Article L. 225-102 of the French Commercial
Code, the number of Dassault Systèmes shares held by the
employees through the corporate savings plan (plan d'épargne
entreprise) was 206,542 shares at December 31, 2014, or
approximately 0.08% of the total number of shares at that
date.
6.3.2 Controlling Shareholder
GIMD (Groupe Industriel Marcel Dassault) is the principal
shareholder of Dassault Systèmes SA with, as of December 31,
2014, 41.11% of the share capital and 55.74% of the exercisable
voting rights (i.e. 55.04% of theoretical voting rights). With
more than 50% of the voting rights of Dassault Systèmes SA,
GIMD controls Dassault Systèmes. GIMD is wholly-owned by
the members of the Dassault family.
In order to ensure that the control of GIMD is not exercised in
an “improper” manner under the meaning of the AMF General
Regulation, the Board of Directors of Dassault Systèmes SA
is made up of 44% of independent directors i.e. a proportion
exceeding the requirement stipulated in the AFEP-MEDEF
Code for controlled companies, and that all of the committees
under the Board (Audit Committee, Compensation and
Nomination Committee, Scientific Committee) are made up of
independent directors only.
As GIMD possesses more than one third but less than half
of the shares and more than half of the voting rights in the
Company, GIMD may not increase its stake by more than 1%
of the total number of shares of the Company in a period of
12 consecutive months, unless it launches a public tender
offer on all the equity securities issued by Dassault Systèmes,
except for an exemption from the obligation to make an offer
based on Article 234-9 (6°) of the General Regulations of the
AMF, which the latter can grant at its discretion.
198 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Information about Dassault Systèmes SA, the share capital and the ownership structure
Information about the Shareholders
6
6.3.3 Shareholder Agreements
In 2011, 2013 and 2014, Dassault Systèmes was informed about collective undertakings concluded concerning the holding of
shares whose characteristics are summarized in the tables hereafter in accordance with AMF recommendation no. 2009-16.
Collective undertakings concluded in 2014
System
Date of signing
Duration of collective undertakings
Article 787 B of the General Taxation Code
Article 787 B of the General Taxation Code
February 27, 2014
At least two years
December 16 and 17, 2014
At least two years
Contractual duration of the agreement
Permanent with cases of termination
Permanent with cases of termination
Conditions for renewal
No specific conditions stipulated
No specific conditions stipulated
Capital and voting rights % concerned by
the agreement (at the date of its execution)
25.0% of the share capital and 33.8% of
the voting rights
24.7% of the share capital and 33.4%
of the voting rights
Names of the signatories having the capacity
of executives (1)
Mr. Charles Edelstenne
Mr. Bernard Charlès
Mr. Charles Edelstenne
Mr. Bernard Charlès
Names of the signatories having close links
with executives
Names of the signatories holding at least 5%
of the capital and/or voting rights of the
company
Groupe Industriel Marcel Dassault
Groupe Industriel Marcel Dassault
Groupe Industriel Marcel Dassault
Charles Edelstenne and beneficiaries(2)
Groupe Industriel Marcel Dassault
Charles Edelstenne and beneficiaries (2)
(1) Pursuant to Article 885 O bis of the General Taxation Code.
(2) See Note 2 under the table of paragraph 6.3.1 “Shareholder Base and Double Voting Rights”.
Collective undertakings concluded in 2011 still in force
Collective undertakings concluded in 2013
Article 787 B of the French Tax Code
Article 787 B of the French Tax Code
6
System
Date of signing
Duration of collective undertakings
At least two years
July 11, 2011
October 29, 2013
At least two years
Contractual duration of the agreement
Permanent with cases of termination
Permanent with cases of termination
Conditions for renewal
No specific conditions stipulated
No specific conditions stipulated
Capital and voting rights % concerned by the
agreement (at its date of execution)
29.6 % of the share capital and 41.8% of the
voting rights
28.2 % of the share capital and 41.6% of
the voting rights
Names of the signatories having the capacity
of executives(1)
Mr Charles Edelstenne
Mr Bernard Charlès
Mr Charles Edelstenne
Mr Bernard Charlès
Names of the signatories having close links
with executives
Names of the signatories holding at least 5%
of the capital and/or voting rights of the
Company
Groupe Industriel Marcel Dassault
Groupe Industriel Marcel Dassault
Groupe Industriel Marcel Dassault
Charles Edelstenne and beneficiaries(2)
Groupe Industriel Marcel Dassault
Charles Edelstenne and beneficiaries(2)
(1) Pursuant to Article 885 O bis of the French Tax Code.
(2) See Note 2 under the table of paragraph 6.3.1 “Shareholder Base and Double Voting Rights”.
The same shares can be subject to several joint lock-up agreements.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 199
6 Information about Dassault Systèmes SA, the share capital and the ownership structure
Stock Market Information
6.4 Stock Market Information
Stock Exchange
Shares of Dassault Systèmes SA have been
listed on
Compartiment A of Euronext Paris (ISIN code FR0000130650)
since June 28, 1996. Its shares were also listed on the NASDAQ
in the form of ADS (American Depositary Shares) under the
symbol DASTY until October 16, 2008. The ADS are still
traded under this symbol on the U.S. over-the-counter market.
One ADS represents one ordinary share (see paragraph 6.3.1
“Shareholding and Double Voting Rights”).
For dividend policy, see the paragraph 7.1 “Presentation of
the Resolutions Proposed by the Board of Directors to the
General Meeting on May 28, 2015”.
Share price history and trading volumes of Dassault Systèmes shares from January 1, 2014
(in euros except for Volume of shares traded)
January 2014
February 2014
March 2014
April 2014
May 2014
June 2014
July 2014
August 2014
September 2014
October 2014
November 2014
December 2014
January 2015
February 2015
Volume of
shares* traded
8,861,508
13,968,856
8,696,296
8,032,912
7,212,930
7,166,674
7,466,969
4,988,279
5,424,912
8,086,900
4,309,478
5,410,247
5,006,706
7,599,064
Share price on
last day of the
month*
Highest share
price during the
month*
Lowest share
price during the
month*
43.96
41.64
42.52
44.32
46.52
46.98
50.14
50.40
50.86
50.57
52.57
50.54
54.92
62.53
45.65
44.84
43.09
46.96
47.11
48.20
50.42
50.78
52.79
51.70
53.50
53.07
55.31
63.48
42.95
39.23
40.78
41.18
43.94
46.12
46.32
46.80
49.98
46.10
49.39
47.38
48.85
53.17
*
The historical data has been restated to take into account the two-for-one stock split carried out on July 17, 2014. (Source: Euronext Paris).
Person Responsible for Financial Communications
François-José Bordonado
Vice-President, Investor Relations
Indicative Timetable for the Publication of Financial
Information for 2015
(cid:125) First quarter of 2015: April 23, 2015
To obtain all financial information and documents published
by the Company, please contact:
Investor Relations Service
10 rue Marcel Dassault – CS 40501
78946 Vélizy-Villacoublay Cedex – France
Telephone: +33 (0)1 61 62 69 24
Fax: +33 (0)1 70 73 43 59
e-mail: investors@3ds.com
(cid:125) Second quarter of 2015: July 23, 2015
(cid:125) Third quarter of 2015: October 22, 2015
(cid:125) Fourth quarter of 2015: February 2016
200 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
7
GENERAL MEETING
OF SHAREHOLDERS
CONTENTS
7.1 Presentation of the Resolutions
Proposed by the Board of
Directors to the General Meeting
of Shareholders on May 28, 2015 202
7.2 Draft Resolutions Proposed
by the Board of Directors to the
General Meeting of Shareholders
on May 28, 2015
208
DASSAULT SYSTÈMES ANNUAL REPORT 2014 201
7 General Meeting of Shareholders
Presentation of the Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
7.1 Presentation of the Resolutions Proposed
by the Board of Directors to the General Meeting
of Shareholders on May 28, 2015
Annual financial statements and allocation of the results
We invite you to approve the annual financial statements of
Dassault Systèmes SA (or the “Company” for the purposes
of the present Chapter 7 “General Meeting of Shareholders”)
for the financial year ended December 31, 2014, prepared
on the basis of French accounting principles, as they have
been presented in paragraph 4.2 “Parent Company Financial
Statements”.
Dassault Systèmes SA has paid dividends every year since
1986. The decision to distribute dividends and their amount
depend on the profits and the financial situation of Dassault
Systèmes SA as well as other factors. Dividends which have
been distributed but are not collected by a shareholder escheat
to the French State at the end of the five-year period following
the date of their payment.
Based on the financial statements and the management report of the Board of Directors included in this Annual Report (Document
de référence), a profit of €183,005,153.92 (1) has been realized for the financial year ended December 31, 2014, which we propose
that you allocate as follows:
(cid:125) to the legal reserve
(cid:125) for distribution to the 255,230,678 shares making up the share capital as of March 20, 2015 of a dividend of
(€0.43 × 255,230,678 shares)(2)
(cid:125) to retained earnings
€124,905.35
€109,749,191.54
€73,131,057.03
which increased by the retained earnings from the prior financial years (€1,710,501,691.33 ) brings the amount of
retained earnings to
€1,783,632,748.36
(1) After allocation to the legal reserve, this profit increased by the retained earnings from the prior financial years of € 1,710,501,691.33 , results in a distributable profit of
€1,893,381,939.90 .
(2) The aggregate amount of dividend will be increased, based on the number of new shares created between March 1, 2015 and the date of the General Meeting of Shareholders
of May 28, 2015, consecutively to the exercise of subscription options, it being specified that the maximum number of shares which could be issued upon the exercise of
subscription options is 4,206,340, i.e. a maximum amount of a supplementary dividend of €1,808,726.20 .
Further new shares created by exercise of options until the
date of the annual General Meeting of Shareholders deciding
on the allocation of profit related to the preceding year will
be entitled to receive the dividend distributed with respect to
that year (see paragraphs 5.3.2.1 “Dassault Systèmes Share
Subscription Options” and 6.4 “Stock Market Information”).
In accordance with the provisions of Article L. 225-210 of
the French Commercial Code, the amount of the dividend
corresponding to the treasury shares of Dassault Systèmes SA
or held by SW Securities LLC, a company which is controlled
by the Dassault Systèmes Group, as of the date of payment,
shall be allocated to “retained earnings”.
Therefore we propose to the General Meeting of Shareholders
of May 28, 2015 to approve (i) to distribute for the year
2014 a dividend of €0.43 per share comprising the capital as
of the date of this General Meeting, resulting – on the basis
of the number of shares comprising the share capital as of
February 28, 2015 decreased of the number of cancelled
shares by the Board of Directors of March 20, 2015 (See
paragraph 6.2.5 “Share Buyback Programs”) – in an aggregate
amount of €109,749,191.54 , and (ii) to distribute, where
applicable, an additional aggregate maximum amount of
€1,808,726.20 which corresponds to the maximum number
of new shares which could be issued between March 1, 2015
and the date of the General Meeting of Shareholders (i.e.
4,206,340 shares).
Shares will be traded ex-dividend as of June 3, 2015 and
dividends made payable as from June 25, 2015.
In addition, prior to distribution of the dividend, the Board
of Directors, or if so delegated, the Chief Executive Officer,
will determine the number of additional shares issued as a
result of the exercise of shares subscription options between
March 1 and the date of the General Meeting of Shareholders
on May 28, 2015. The amount required for payment of
dividends for shares issued during this period shall be taken
from “retained earnings”.
The amount distributed in this way may be taken into account
for determining shareholders’ total revenue subject to the
progressive rate of income tax for the year during which it was
received after application of an uncapped deduction of 40%
(as provided by Article 158-3-2 of the French Tax Code). The
dividend shall be subject to a non-discharging withholding of
the income tax to the rate of 21% (as provided by Article 117
quarter of the French Tax Code).
202 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
General Meeting of Shareholders
Presentation of the Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
7
Pursuant to Article 243 bis of the French Tax Code, it is noted that dividends per share paid over the last three financial years have
been as follows:
Dividend*
Number of shares eligible for dividends*
2013
€0.83
2012
€0.80
2011
€0.70
126,746,027
125,572,474
125,026,338
*
The information in this table shows the situation before the two-for-one split of Dassault Systèmes SA shares carried out on July 17, 2014.
Sumptuary expenses and general charges set forth
in Article 223 of the French Tax Code
In accordance with the provisions of Article 223 quater of the
French Tax Code, we inform you that the total amount of non-
deductible tax expenses and charges for 2014 is €410,755,
which resulted in corporate income tax of €156,087.
Option to receive payment of dividends in the form
of shares
It is proposed that each shareholder be granted the option
to choose to receive payment of the dividends noted above,
in cash or in the form of new shares of the Company. If the
option for payment in the form of new shares is chosen, the
new shares will be issued at a price equal to the average of the
closing prices quoted on Euronext Paris during the 20 stock
exchange sessions preceding the date of the General Meeting
of Shareholders less the amount of the dividend and rounded
up to the next one hundredth of a euro.
Shareholders may choose payment of the dividend in new
shares between June 3 and June 16 , 2015, inclusive, by
sending their request to the financial intermediaries that are
authorized to pay the dividend or, for shareholders listed in
the direct registered share accounts held by the Company,
to its authorized representative (Société Générale, securities
department, 32 rue du Champ de Tir, CS 30812, 44308
Nantes Cedex 3). Accordingly, shareholders who have not
chosen payment of dividends in shares before the end of this
period will receive the dividend in cash as from June 25, 2015.
For shareholders who have chosen to receive payment of the
dividend in shares, the new shares will be delivered as of the
same day.
If the option selected does not correspond to a whole number
of shares, the shareholder may choose between receiving a
number of shares rounded up to the next whole number, by
paying the difference in cash on the day the option is selected,
or receiving a number of shares rounded down to the next
whole number, and the balance in cash.
Consolidated financial statements
In addition to the 2014 parent company annual financial
statements, we
invite you to approve the Company’s
consolidated financial statements for the financial year
ended December 31, 2014, prepared in accordance with IFRS
standards as described in paragraph 4.1.1 “Consolidated
Financial Statements”.
Regulated agreements (conventions réglementées)
The following agreements, which were approved in accordance
with Articles L. 225-38 et seq. of the French Commercial Code
and reviewed by the Board at its meeting on March 20, 2015
in accordance with the new version of Article L. 225-40-1,
were in effect during the financial year ended December 31,
2014:
(cid:125) the following undertakings made by the Company in
connection with its “Directors & Officers” liability insurance
policy entered into with Allianz (ACS):
(cid:125) to assume, under certain conditions, the cost of legal
defense of directors in the event of their personal liability
being sought, and indemnify the directors for the financial
implications of such liability to the extent they would not
be covered by that insurance policy (approved by the
Board of Directors’ meeting held on July 24, 1996),
(cid:125) to assume, under certain conditions, the cost of legal
defense of directors of the Company should they have to
prepare their personal defense before a civil, criminal or
administrative court in the United States in connection
with an inquiry or investigation conducted against the
Company (approved by the Board of Directors’ meeting
held on September 23, 2003);
(cid:125) agreement regarding the Company’s undertakings to
Bernard Charlès, relating to indemnities which would be
due upon the termination of his functions as Chief Executive
Officer.
These agreements were reviewed by the Board of Directors
at its meeting on March 20, 2015, in accordance with the
provisions of Article L. 225-40-1 of the French Commercial
Code.
Note that agreements with wholly-owned subsidiaries
of the Company are now excluded from the scope of
regulated agreements pursuant to Order no. 2014-863 of
July 31, 2014 on measures aimed at helping companies to
simplify administrative procedures and boost development.
Consequently, at its meeting on March 20, 2015, the Board
of Directors stated that the non-exclusive license to use the
ENOVIA trademark granted free of charge to the subsidiary
Dassault Systèmes Americas Corp. was now outside the scope
of regulated agreements and decided pursuant to Article 38
of the Order to exclude it from the annual review required by
Article L. 225-40-1 of the French Commercial Code.
7
DASSAULT SYSTÈMES ANNUAL REPORT 2014 203
7 General Meeting of Shareholders
Presentation of the Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
When the term of office of the Chief Executive Officer was
renewed, the Board of Directors, at its meeting on May 26,
2014, authorized, in accordance with the proposal of the
Compensation and Nomination Committee and pursuant
to Article L. 225-42-1 of the French Commercial Code,
the renewal of the agreement regarding the Company’s
undertakings to Bernard Charlès, relating to indemnities
which would be due upon the termination of his functions as
Chief Executive Officer, under the terms adopted by the Board
of Directors at its meeting on May 27, 2010. The amount of
the indemnity due would be equivalent to a maximum of two
years of compensation as Chief Executive Officer and would
depend on satisfying the performance conditions established
for calculating his variable compensation.
In accordance with Article L. 225-42-1 of the French
Commercial Code, this agreement is subject to the approval of
the General Meeting of Shareholders (see paragraph 5.1.4.2
“Indemnities Due in the Event of the Forced Departure of
the Chief Executive Officer” and Table 11 of paragraph 5.3.1
“Compensation of the Company’s Directors” – M andataires
sociaux).
The Statutory Auditors have prepared a special report
pursuant to Articles L. 225-40 and L. 225-42-1 of the French
Commercial Code, as set forth in paragraph 4.2.6 “Special
Report of the Statutory Auditors on Regulated Agreements
and Commitments”. The General Meeting of Shareholders will
be asked to take note of this report and to approve the new
agreement referred to therein.
Advisory opinion on the compensation elements
due or granted with respect to 2014 to Mr Charles
Edelstenne, Chairman of the Board of Directors, and
Mr Bernard Charlès, Chief Executive Officer
In accordance with the recommendation of the AFEP-MEDEF
Code, it is proposed that the General Meeting of Shareholders
issue an advisory opinion on the compensation elements due
or granted with respect to 2014 to each executive officer
as defined by this Code, namely Mr Charles Edelstenne,
Chairman of the Board of Directors and Mr Bernard Charlès,
Chief Executive Officer, whose compensation elements are
summarized in the tables below (see also paragraphs 5.1
“Report of the Chairman on Corporate Governance and
Internal Control” and 5.3.1 “Compensation of the Company’s
Directors” – M andataires sociaux).
COMPENSATION ELEMENTS DUE OR GRANTED WITH RESPECT TO 2014 TO MR CHARLES EDELSTENNE,
CHAIRMAN OF THE BOARD OF DIRECTORS
Compensation element (in euros)
Amount Observations
Fixed compensation(1)
982,000 Gross fixed compensation for 2014 set by the Board of Directors on March 21, 2014, upon
the proposal of the Compensation and Nomination Committee.
Annual variable compensation
N/A Mr Charles Edelstenne receives no annual variable compensation.
Deferred annual variable
compensation
Multi year variable
compensation
Directors’ fees(2)
N/A Mr Charles Edelstenne receives no deferred annual variable compensation.
N/A Mr Charles Edelstenne receives no multi-year variable compensation.
42,000 Director’s fees due for 2014.
Extraordinary compensation
N/A Mr Charles Edelstenne receives no extraordinary variable compensation.
Granting of share subscription
options and/or performance
shares
Indemnity upon start or
termination of function
N/A Mr Charles Edelstenne does not hold any share subscription options and was not granted
any performance shares.
N/A Mr Charles Edelstenne receives no indemnity upon start or termination of function.
Non-competition indemnity
N/A Mr Charles Edelstenne receives no non-competition indemnity.
Additional retirement plan
N/A No additional retirement plan was implemented by Dassault Systèmes SA.
Benefits(3)
N/A Mr Charles Edelstenne receives no benefits in kind.
(1) See also paragraph 5.1.4.1 “Compensation of Executive Officers” of the Chairman of the Board’s Report on Corporate Governance and Internal Control. In 2014, GIMD paid
Mr Charles Edelstenne, as GIMD’s Chief Executive Officer, gross fixed compensation of €800,000.
(2) GIMD paid Mr Charles Edelstenne €22,719 in directors’ fees in 2014, in connection with his mandate as a member of the Supervisory Board of GIMD. See also paragraph 5.1.4.4
“Directors’ Fees” on the conditions for distributing the directors’ fees at Dassault Systèmes SA.
(3) In 2014, GIMD granted benefits in kind related to the use of a car in an amount of €10,063 to Mr Charles Edelstenne.
204 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
General Meeting of Shareholders
Presentation of the Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
7
COMPENSATION ELEMENTS DUE OR GRANTED WITH RESPECT TO 2014 TO MR BERNARD CHARLÈS,
CHIEF EXECUTIVE OFFICER
Compensation element (in euros)
Amount Observations
Fixed Compensation
1,058,000 Fixed gross compensation with respect to 2014 set by the Board of Directors on March 21,
2014(1)
Annual variable compensation
1,269,600 Variable gross compensation with respect to the 2014 fiscal year actually paid and decided by
Deferred annual variable
compensation
Multi year variable
compensation
Directors’ fees(2)
the Board of Directors on March 20, 2015(1).
N/A Mr Bernard Charlès receives no deferred annual variable compensation.
N/A Mr Bernard Charlès receives no multi year annual variable compensation.
27,000 Director’s fees due for 2014.
Extraordinary compensation
N/A Mr Bernard Charlès receives no extraordinary compensation.
Granting of share subscription
options and/or performance
shares
5,620,500 Mr Bernard Charlès was granted 150,000 2014-B shares by the Board on February 21, 2014,
increased to 300,000 following the two-for-one split of the
which subsequently
Dassault Systèmes shares on July 17, 2014(3).
Indemnity upon start or
termination of function
N/A Mr Bernard Charlès receives under certain conditions an indemnity upon the termination of his
functions, the amount of which would not exceed two years of the Chief Executive Officer’s
compensation and would depend on the satisfaction of the performance conditions for the
payment of his variable compensation.
In accordance with Article L. 225-42-1 of the French Commercial Code, this commitment on
the part of Dassault Systèmes SA was authorized by the Board of Directors on May 26, 2014,
and is subject to the approval of the General Meeting of Shareholders on May 28, 2015(4).
Non-competition indemnity
N/A Mr Bernard Charlès receives no non-competition indemnity.
Additional retirement plan
N/A No additional retirement plan was implemented.
Benefits
10,934 These benefits are related to the use of a car provided by Dassault Systèmes SA.
(1) See also paragraph 5.1.4.1 “Compensation of Executive Officers” of the Chairman of the Board’s Report on Corporate Governance and Internal Control.
(2) See also paragraph 5.1.4.4 “Directors’ Fees” on the conditions for distributing the directors’ fees at Dassault Systèmes SA.
(3) See also paragraph 5.1.4.3 “Performance Shares and Share Subscription Options” of the Chairman of the Board’s Report on Corporate Governance and Internal Control.
(4) See also paragraph 5.1.4.2 “Indemnities Due in the Event of the Imposed Departure (départ contraint) of the Chief Executive Officer” of the Chairman of the Board’s Report on
Corporate Governance and Internal Control.
Renewal of the terms of office of four directors
and ratification of the co-opting of a new director
The terms of office of Nicole Dassault, Toshiko Mori, Jean-
Pierre Chahid-Nouraï and Arnoud De Meyer expire at the
General Meeting of Shareholders on May 28, 2015. You are
invited to renew their terms of office for a period of four years
(For a presentation of these directors, see paragraph 5.1.1.1
“Composition of the Board of Directors”).
There will also be a proposal made to the General Meeting
of Shareholders to ratify the appointment of Marie-Hélène
Habert to replace her father, Serge Dassault, for the remainder
of his term of office, until the General Meeting that will be
held to approve the financial statements for the year ending
December 31, 2015, which was made on a provisional basis
by the Board of Directors at its meeting on July 23, 2014.
If these proposals are approved, the Board of Directors will
include four women and four independent directors out of its
nine members, i.e. a proportion of 44%, which is greater than
that recommended by the AFEP-MEDEF Code and the law on
the representation of women on Boards of Directors.
7
DASSAULT SYSTÈMES ANNUAL REPORT 2014 205
7 General Meeting of Shareholders
Presentation of the Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
Authorization to repurchase shares of the Company
The authorization to repurchase shares of the Company
granted to the Board of Directors at the General Meeting of
Shareholders on May 26, 2014 will expire at the General
Meeting of Shareholders of May 28, 2015. Under this
authorization, share repurchases were made in 2014 and at
the beginning of 2015, as described in paragraph 6.2.5 “Share
Buyback Programs”. Additional share repurchases may be
made until the date of the General Meeting of Shareholders,
and will be described in the Annual Report (Document de
reference) for the financial year ending December 31, 2015.
We invite you to renew the authorization to the Board of
Directors to repurchase shares of the Company according
to the conditions set forth in Articles L. 225-209 et seq. of
the French Commercial Code, within the limit of 10% of the
capital of the Company at the date of the General Meeting
of Shareholders of May 28, 2015, for a maximum purchase
price of €90 per share and within the limits stipulated in
the applicable regulations. The maximum amount of funds
dedicated to repurchase shares of the Company may not
exceed €500 million.
Should you approve this proposal, the authorization will
be valid until the annual General Meeting of Shareholders
approving the financial statements for the financial year
ending December 31, 2015.
This authorization to repurchase shares may be used for the
following purposes:
1)
2)
3)
to cancel shares for the purpose of increasing the
profitability of shareholders’ equity and income per
share, subject to adoption by the Extraordinary Meeting
of Shareholders of the resolution permitting shares to be
cancelled;
to provide securities representing no more than 5% of the
share capital of the Company in payment or in exchange,
including external growth transactions;
to animate the market or provide liquidity for the
intermediary of an
Company’s shares through the
investment services provider by means of a liquidity
contract complying with a Code of Ethics accepted by
the Financial Market Authority (Autorité des marchés
financiers);
4)
to perform all obligations related to stock options grants
or other grants of shares to employees or directors of the
Company and its affiliates;
5)
to cover the Company’s commitments pursuant to rights
to cash payments based on increases in the share price of
6)
7)
the Company, granted to the employees and directors of
the Company and its affiliates;
to provide shares upon exercise of rights to the Company’s
share capital which are attached to issued securities;
to implement any stock exchange market practice which
may be recognized by law or by the Autorité des marchés
financiers.
The share repurchase program is described in paragraph 6.2.5
“Share Buyback Programs”, where all relevant information is
presented.
In light of the possible cancellation of the repurchased shares,
we propose that you also authorize the Board of Directors
to cancel, as the case may be, for the same period, all or a
portion of the shares which it has repurchased and to reduce
in a corresponding amount the share capital, within a limit of
10% of its amount.
Delegations and authorizations to carry out a capital
increase
General financial authorizations
Delegations and authorizations to carry out a capital increase
granted by the Board of Directors by the General Meeting of
Shareholders of May 30, 2013 are set to expire in July 2015.
You are therefore invited to authorize the Board once again
to carry out a capital increase for a period of 26 months,
particularly in order to enable it to select, at any time, from
a wide range of securities giving access to capital or debt
securities of the Company with or without pre-emptive
rights, through a public offer or private placement, the most
appropriate funding for the Company’s development, in light
of the market conditions at the time of consideration.
You will also be invited to renew the Board’s authorization
to increase the share capital by incorporation of reserves,
profits or premiums, and to increase the capital to remunerate
contributions in kind of shares or equity-linked securities.
The resolutions proposed to this effect will replace the
resolutions adopted by the General Meeting of Shareholders
of May 30, 2013. The use of these delegations is described
in paragraph 6.2.4 “Delegations and Authorizations Granted
to the Board of Directors by the General Meetings of
Shareholders” . The Board of Directors has made no other use
of these delegations in 2014 or between the start of 2015 and
the date of this Annual Report (Document de ré fé rence).
206 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
General Meeting of Shareholders
Presentation of the Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
7
If you adopt these resolutions, the Board will be able to:
(cid:125) carry out capital increases with or without pre-emptive
rights (by using, in particular, the option offered by law to
enter into a private placement with portfolio managers or
qualified investors) up to the nominal limit of €12 million,
and with regard to debt securities giving access to capital, up
to the nominal limit of €750 million. This cap of €12 million
also represents the total nominal amount of all capital
increases that may be carried out under resolutions 16 to
19, and 22;
(cid:125) carry out capital increases by incorporation of reserves,
profits or premiums, up to the limits of the same nominal
amount of €12 million;
(cid:125) carry out capital increases to remunerate contributions in
kind of shares or equity-linked securities, up to 10% of the
share capital.
Financial authorizations intended for employees and directors
In accordance with the law, there will also be a proposal to
enable the Board of Directors to carry out capital increases
reserved for employees of the Company and/or of associate
companies and members of Company savings plans. The
maximum nominal amount of the capital increases that may
be carried out in this way would be €5 million, through the
issue of new shares or securities giving access to capital. This
new authorization will cancel and replace that given by the
General Meeting of Shareholders of May 30, 2013.
It is proposed to renew in advance the authorization granted
to the Company’s Board of Directors by the shareholders on
May 30, 2013 to grant free shares to Company employees and
management in order to benefit from, if applicable, the new
provisions provided in the draft “Macron” law with respect to
performance shares. As this draft law was still being debated
as of the date on which the presentation of resolutions was
approved, it cannot be guaranteed that the published definitive
text of the law will be applicable to this resolution.
Shares granted under this authorization may not give rights to
a total amount of shares greater than 2% of the share capital
on the day of the General Meeting of Shareholders on May 28,
2015.
The relevant information on the different uses of the Board
of Directors granted in 2010 by the General Meeting of
Shareholders are contained in paragraphs 5.3 “Summary
of the Compensation and Benefits due to Directors” and
5.1 “Report of the Chairman on Corporate Governance and
Internal Control”.
This authorization may supersede, for the unused portion, the
prior authorizations granted to the Board of Directors.
Amendments to by-laws
A proposal will be made to the General Meeting to amend the
Company’s by-laws, primarily to reflect new legislation. The
aim of these amendments is to:
(cid:125) remove the reference to the period of six years for the term
of office of directors for those terms of office that were
under way on the date on which their duration was changed
since this provision became obsolete (paragraph 14.2 of the
by-laws);
(cid:125) take account of the new provisions relating to regulated
agreements pursuant to the Order of July 31, 2014 on
company law (Article 22 of the by-laws);
(cid:125) take account of the change to the date on which the
Company’s shares must be registered in order to be able to
participate in the General Meetings of Shareholders; this
date was three business days before the meeting at 00 h,
Paris time; it is now two business days before the meeting,
pursuant to Decree no. 2014-1466 of December 8, 2014
(Article 27 of the by-laws).
Conversion into a European company
At this General Meeting of Shareholders, you will also be
invited to vote on the conversion of Dassault Systèmes SA into
a European company, which would require the adoption of
new by-laws.
We would remind you that the Board of Directors, at its
meeting on March 21, 2014, approved the plan for the
conversion of Dassault Systèmes SA into a European company,
which was filed with the clerk's office of the Commercial Court
of Versailles on March 27, 2014, together with the report
of the Board of Directors explaining the legal and business
reasons for the conversion and setting out the implications for
shareholders and employees of the adoption of the European
company form, it being specified that a revised version of the
draft by-laws was filed with the Court’s administration office
on March 24, 2015. These drafts and the above-mentioned
report have been made available to you.
Ernst & Young et Autres and Finexsi, the auditors appointed
from the court-approved list to appraise the Company’s assets,
by order of the President of the Commercial Court of Versailles
on February 12, 2015, issued a report stating that the net
assets of Dassault Systèmes SA were at least equivalent to the
capital plus the reserves that the law or the Company’s by-
laws do not allow to be distributed. This report has also been
made available to you.
7
DASSAULT SYSTÈMES ANNUAL REPORT 2014 207
7 General Meeting of Shareholders
Draft Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
The completion of the conversion of the Company into a
European company requires prior negotiations between
the Company and its employees (represented by a “Special
Negotiation Group”) to determine the procedures for the
involvement of the employees within the European company.
These negotiations may lead to one of the following:
(cid:125) an agreement determining the procedures for the involvement
of the employees within the European company;
(cid:125) the decision, taken on a majority basis as provided for in
Articles L. 2352-13 et seq. of the Labor Code, to terminate
the negotiations under way and apply the regulations
relating to informing and consulting employees in the
member states of the European Union in which the
Company has employees;
(cid:125) the application of the subsidiary provisions relating to the
European Company Committee provided for in Articles
L. 2353-1 et seq. of the Labor Code if no agreement has
been reached at the end of the negotiation period stipulated
in Article L. 2352-9 of the Labor Code.
On March 20, 2015, the date on which the presentation of
the resolutions was approved by the Board of Directors, given
that the negotiations between Dassault Systèmes SA and the
Special Negotiation Group were still under way, it is proposed
that the General Meeting of Shareholder formally acknowledge
that such negotiations have been finalized with respect to the
procedures for the involvement of the employees within the
European company and, where relevant, sign an agreement
to this effect and affirm that the aforementioned prerequisite
has been met and that the conversion of the Company into a
European company has taken effect.
You can find further
information about the proposed
resolutions in the draft resolutions submitted hereafter to you.
7.2 Draft Resolutions Proposed by the Board
of Directors to the General Meeting
of Shareholders on May 28, 2015
Ordinary General Meeting
❘ First resolution
❘ Second resolution
Approval of the parent company annual financial statements
Approval of the consolidated financial statements
The General Meeting, after the reading of the management
report of the Board of Directors and the report of the Statutory
Auditors, in addition to the explanations made orally, hereby
approves the report of the Board and the parent company
annual financial statements for the financial year ended
December 31, 2014, as they have been presented.
The General Meeting consequently approves any transactions
disclosed by such financial statements or summarized in such
reports and in particular, in accordance with the provisions of
Article 223 quater of the French Tax Code, the total amount
of non deductible tax expenses and charges referred to in
Article 39.4 of the French Tax Code, which amounted to
€410,755 and resulted in corporate income tax of €156,087.
The General Meeting, after the reading of the report of the
Board of Directors with respect to management of the Group
included in the management report and the report related
to the consolidated financial statements of the Statutory
Auditors, in addition to the explanations made orally, hereby
approves in all respects the report of the Board and the
consolidated financial statements for the financial year ended
December 31, 2014, as they have been presented.
The General Meeting consequently approves any transactions
disclosed by such consolidated financial statements or
summarized in such reports.
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Draft Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
7
❘ Third resolution
Allocation of the results
The General Meeting, upon the proposal of the Board of Directors, hereby resolves to allocate the profit of the financial year
amounting to €183,005,153.92 (1) as follows:
(cid:125) to the legal reserve
(cid:125) for distribution to the 255,230,678 shares making up the share capital as of March 20, 2015 of a dividend of
(€0.43 x 255,230,678 shares)(2)
to retained earnings
which increased by the retained earnings from the prior financial years brings the amount of retained earnings to
€1,710,501,691.33
€124,905.35
€109,749,191.54
€73,131,057.03
€1,783,632,748.36
(1) After allocation to the legal reserve, this profit increased by the retained earnings from the prior financial years of €1,710,501,691.33 , results in a distributable profit of
€1,893,381,939.90 .
(2) The aggregate amount of dividend will be increased, based on the number of new shares created between March 1, 2015 and the date of the General Meeting of Shareholders of
May 28, 2015, consecutively to the exercise of subscription options, it being specified that the maximum number of shares which could be issued upon the exercise of subscription
options is 4,206,340, i.e. a maximum amount of a supplementary dividend of €1,808,726.20 .
Shares will be traded ex-dividend as of June 3 , 2015 and
dividends made payable as from June 25, 2015.
In accordance with the provisions of Article L. 225-210 of
the French Commercial Code, the amount of the dividend
corresponding to the treasury shares of Dassault Systèmes SA
or held by SW Securities LLC, a company which is controlled
by the Dassault Systèmes Group, as of the date of payment,
shall be allocated to “retained earnings”.
In addition, prior to distribution of the dividend, the Board of
Directors, or if so delegated, the Chief Executive Officer will
determine the number of additional shares issued as a result of
the exercise of shares subscription options between March 1
and the date of this General Meeting; the amount required for
payment of dividends for shares issued during this period shall
be taken from “retained earnings”.
The amount distributed in this way may be taken into account
for determining shareholders’ total revenue subject to the
progressive rate of income tax for the year during which it was
received after application of an uncapped deduction of 40%
(as provided by Article 158-3-2 of the French Tax Code). The
dividend shall be subject to a non discharging withholding of
the income tax to the rate of 21% (as provided by Article 117
quater of the French Tax Code).
Pursuant to Article 243 bis of the French Tax Code, it is noted that dividends per share paid over the last three financial years have
been as follows:
7
Dividend*
Number of shares eligible for dividends*
2013
€0.83
2012
€0.80
2011
€0.70
126,746,027
125,572,474
125,026,338
*
The information in this table shows the situation before the two-for-one split of Dassault Systèmes SA shares carried out on July 17, 2014.
❘ Fourth resolution
Option to receive payment of dividends in the form of shares
The General Meeting of Shareholders after the reading of the
Board of Directors’ report, and finding that the capital is fully
paid up, decides to offer each shareholder the possibility of
choosing to receive payment of the dividend decided in the
third resolution, and to which he is entitled, in the form of new
shares in the Company.
Each shareholder may decide to receive payment of the
dividend in cash, or in new shares. The choice may apply only
on the total amount of the dividend to which he is entitled.
If the shareholder chooses to receive payment of the dividend
in the form of shares, the new shares will be issued without
discount at a price equal to the average of the closing prices
quoted on the regulated market of Euronext Paris during
the 20 stock exchange sessions preceding the date of the
General Meeting of Shareholders less the net amount of
the dividend decided in the third resolution rounded up to
the next one hundredth of a euro. Such new shares will be
eligible for dividends as from January 1, 2015, and will have
all the rights and privileges with the other shares issued by
Dassault Systèmes SA.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 209
7 General Meeting of Shareholders
Draft Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
Shareholders may choose payment of the dividend in cash or new
shares between June 3 and June 16, 2015, inclusive, by sending
their request to the financial intermediaries that are authorized
to pay the dividend or, for shareholders listed in the direct
registered share accounts held by the Company, to its authorized
representative (Société Générale, securities department, 32 rue
du Champ de Tir, CS 30812, 44308 Nantes Cedex 3). After
June 16, 2015, the dividend will only be paid out in cash.
For shareholders who have not chosen payment of the
dividend in shares, the dividend shall be paid as from June 25,
2015, after the period for choosing payment in either cash or
new shares has expired. For shareholders who have chosen to
receive payment of the dividend in shares, the new shares will
be delivered as of the same day.
If the amount of dividends for which payment in the form
of shares has been chosen does not correspond to a whole
number of shares, the number of shares to be received by
the shareholder will be rounded up to the next whole number
upon the shareholder paying the difference in cash on the day
the choice to receive payment in the form of shares is made or
the number of shares to be received by the shareholder will be
rounded down to the next whole number and the shareholder
will receive the balance in cash.
The General Meeting of Shareholders gives full powers to the
Board of Directors, with the right of sub delegation to the
Chairman of the Board under the conditions provided by law, to
carry out the payment of dividends in new shares, to stipulate
the terms of application and implementation, to record the
number of new shares issued under this resolution, to make any
necessary changes in the Company’s by-laws relating to the
share capital and the number of shares it contains, and, more
generally, to do whatever may be appropriate or necessary.
❘ Fifth resolution
Regulated agreements (conventions réglementées)
The General Meeting of Shareholders, having reviewed the
special report of the Statutory Auditors on the agreements
governed by Articles L. 225-38 et seq. of the French
Commercial Code, acknowledges the report, which did not
include any new agreements, except for the agreement
referred to in the sixth resolution.
❘ Sixth resolution
Regulated agreement (conventions réglementées) between
the Company and Bernard Charlès
The General Meeting of Shareholders, having reviewed the
special report of the Statutory Auditors on the agreements
governed by Articles L. 225-38 et seq. of the French
Commercial Code and in accordance with Article L. 225-42-
1 of the French Commercial Code, approves the renewal of
the agreement referred to in the said report relating to the
commitments made by the Company to Bernard Charlès on
the indemnities due upon the termination of his functions as
Chief Executive Officer, according to the terms adopted by the
Board of Directors at its meeting on May 26, 2014.
❘ Seventh resolution
Advisory opinion on the compensation elements due
or granted with respect to 2014 to Mr Charles Edelstenne,
Chairman of the Board of Directors
The General Meeting of Shareholders issues a favorable opinion
on the compensation elements due or granted with respect
to 2014 to Mr Charles Edelstenne, Chairman of the Board of
Directors, as indicated in the 2014 Annual Report (Document
de référence), under Chapter 5 “Corporate Governance”,
paragraph 5.3.1 “Compensation of the Company’s Directors
(M andataires sociaux)”.
❘ Eighth resolution
Advisory opinion on the compensation elements due
or granted with respect to 2014 to Mr Bernard Charlès, Chief
Executive Officer
The General Meeting of Shareholders issues a favorable
opinion on the compensation elements due or granted with
respect to 2014 to Mr Bernard Charlès, Chief Executive
Officer, as indicated in the 2014 Annual Report (Document
de référence), under Chapter 5 “Corporate Governance”,
paragraph 5.3.1 “Compensation of the Company’s Directors
(M andataires sociaux)”.
❘ Ninth resolution
Renewal of the term of Mr Jean-Pierre Chahid-Nouraï
The General Meeting of Shareholders notes that Mr Jean-
Pierre Chahid-Nouraï’s term as director expires at this General
Meeting of Shareholders and renews his term for four years.
This term of office will expire at the General Meeting of
Shareholders approving the financial statements for the
financial year ending December 31, 2018.
❘ Tenth resolution
Renewal of the term of Mr Arnoud De Meyer
The General Meeting of Shareholders notes that Mr Arnoud
De Meyer’s term as director expires at this General Meeting
of Shareholders and renews his term for four years. This term
of office will expire at the General Meeting of Shareholders
approving the financial statements for the financial year
ending December 31, 2018.
❘ Eleventh resolution
Renewal of the term of Ms Nicole Dassault
The General Meeting of Shareholders notes that Ms Nicole
Dassault’s term as director expires at this General Meeting of
Shareholders and renews her term for four years. This term
of office will expire at the General Meeting of Shareholders
approving the financial statements for the financial year
ending December 31, 2018.
210 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
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7
❘ Twelfth resolution
Renewal of the term of Ms Toshiko Mori
The General Meeting of Shareholders notes that Ms Toshiko
Mori’s term as director expires at this General Meeting of
Shareholders and renews her term for four years. This term
of office will expire at the General Meeting of Shareholders
approving the financial statements for the financial year
ending December 31, 2018.
❘ Thirteenth resolution
Ratification of the co-option of Ms Marie-Hélène Habert
as director
The General Meeting of Shareholders ratifies the co-option
of Ms Marie-Hélène Habert as a director, as decided by the
Board of Directors at its meeting on July 23, 2014, for the
remainder of the term of her predecessor Mr Serge Dassault,
who had resigned, until the General Meeting of Shareholders
held to approve the financial statements for the year ending
December 31, 2015.
❘ Fourteenth resolution
Authorization to repurchase shares of Dassault Systèmes SA
The General Meeting, after the reading of the report of the Board
of Directors, authorizes the Board of Directors to repurchase a
number of shares representing up to 10% of the share capital
of Dassault Systèmes SA at the date of the General Meeting, in
accordance with the terms and conditions provided by Articles
L. 225-209 et seq. of the French Commercial Code.
This authorization may be used by the Board of Directors for
the following purposes:
1)
2)
3)
to cancel shares for the purpose of increasing the
profitability of shareholders’ equity and income per
share, subject to adoption by the General Meeting of the
fifteenth resolution;
to provide securities (representing no more than 5%
of the share capital of the Company) in payment or in
exchange, particularly in connection with external growth
transactions;
to animate the market and provide liquidity of the
Company’s shares through the
intermediary of an
investment services provider by means of a liquidity
contract complying with an Ethical Code accepted by the
Autorité des marchés financiers;
4)
to perform all obligations related to stock options grants
or other grants of shares to employees or directors of the
Company and its affiliates;
5) to ensure coverage of the Company’s commitments
resulting from rights granted to the employees and
directors to payment in cash based on increases in the
share price of the Company;
6) to provide shares upon exercise of rights to the Company’s
share capital which are attached to issued securities;
7)
to implement any stock exchange market practice which
may be recognized by law or by the Autorité des marchés
financiers.
The acquisition, sale, transfer or exchange of such shares may
be effected by any means allowed on the market (whether
or not the market is regulated), multilateral trade facilities
(MTF) or through a systematic internalizer or over the counter,
in particular acquisition of blocks, and at the times deemed
appropriate by the Board of Directors or any person acting
pursuant to a sub delegation and according to the law.
Such means shall include (i) use of available cash flow, (ii)
the use of any derivative financial instrument negotiated on
a market (whether or not the market is regulated), MTF or
through a systematic internalizer or over the counter, and (iii)
the implementation of optional transactions (purchase and
sale of options, provided however that the use of these means
does not create a significant increase of the volatility of the
stock exchange price).
The maximum amount of funds dedicated to repurchase of
shares of the Company may not exceed €500 million, this
condition being cumulative with the cap of 10% of the capital
of the Company.
Dassault Systèmes SA may not purchase shares at a price
per share which exceeds €90 (excluding acquisition costs),
and in any case the price per share shall not exceed the
maximum price provided by the applicable legal rules, subject
to adjustments in connection with transactions on its share
capital, in particular by capitalization of reserves and free
allocation of shares and/or regrouping or split of shares.
This authorization can be used by the Board of Directors for all
the treasury shares held by Dassault Systèmes.
This authorization shall be valid commencing on the date
of this General Meeting until the Ordinary General Meeting
ruling on the financial statements for the financial year ending
December 31, 2015. The General Meeting hereby grants
any and all powers to the Board of Directors with option of
delegation when legally authorized, to place any stock orders
or orders outside the market, enter into any agreements,
prepare any documents including information documents,
determine terms and conditions of Company transactions
on the market, as well as terms and conditions for purchase
and sale of shares, file any declarations, including those
required by the Autorité des marchés financiers, accomplish
any formalities, and more generally, carry out any necessary
measures to complete such transactions.
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DASSAULT SYSTÈMES ANNUAL REPORT 2014 211
7 General Meeting of Shareholders
Draft Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
The General Meeting also grants any and all powers to the
Board of Directors, in case that the law or the Autorité des
marchés financiers appear to extend or to complete the
authorized objectives concerning the share repurchase
program, in order to inform the public, pursuant to applicable
regulations and laws, about the potential changes of the
program concerning the modified objectives.
In accordance with the provisions of Articles L. 225-211 and
R. 225-160 of the French Commercial Code, the Company
or the intermediary in charge of securities administration for
the Company shall keep registers which record purchases and
sales of shares pursuant to this program.
This authorization shall replace and supersede the previous
share repurchase program authorized by the Combined
General Meeting of Shareholders of May 26, 2014, in its
twelfth resolution.
Extraordinary General Meeting
❘ Fifteenth resolution
Authorization granted to the Board of Directors to reduce the
share capital by cancellation of previously repurchased shares
in the framework of the share repurchase program
The General Meeting, after the reading of the report of the
Board of Directors and the special report of the Statutory
Auditors, hereby authorizes the Board of Directors, pursuant to
the provisions of Article L. 225-209 of the French Commercial
Code, to:
(cid:125) reduce the share capital by cancellation, in one or several
transactions, of all or part of the shares repurchased by the
Company pursuant to its share repurchase program, up to a
limit of 10% of the share capital over periods of twenty-four
months;
(cid:125) deduct the difference between the repurchase value of the
cancelled shares and their nominal value from available
premiums and reserves.
The General Meeting hereby gives, more generally, any
and all powers to the Board of Directors to set the terms
and conditions of such share capital reduction(s), record the
completion of the share capital reduction(s) made pursuant
to the cancellation transactions authorized by this resolution,
amend the by-laws of the Company as may be necessary,
file any declaration with the Autorité des marchés financiers
or other institutions, accomplish any formalities and more
generally take any necessary measures for the purposes of
completing this transaction.
This authorization is granted to the Board of Directors for a
period ending at the end of the General Meeting called to
approve the financial statements for the financial year ending
December 31, 2015.
❘ Sixteenth resolution
A uthorization of the Board to increase the share capital
through the issue of shares or securities giving access to
other equity securities of the Company or giving rights to
debt securities and to issue securities giving access to equity
securities of the Company to be issued, with pre-emptive rights
The General Meeting of Shareholders, having reviewed the
report of the Board of Directors and the special report of the
Statutory Auditors:
1) delegates to the Board of Directors, in accordance with
the provisions of Articles L. 225-129 to L. 225-129-6,
L. 228- 91 and L. 228-92 of the French Commercial Code,
the authorization to issue, in one or several transactions, at
the time or times it selects, in the proportions that it deems
appropriate, both in France and abroad, ordinary shares
and/or securities giving access to other equity securities or
giving rights to debt securities and/or any other securities
giving access to equity securities of the Company to be
issued; it being specified that the Board of Directors may
delegate all the powers necessary to proceed with a capital
increase to the Chief Executive Officer, or with the latter’s
agreement, to one or several Deputy Chief Executive
Officers, under the conditions permitted by law;
2) expressly stipulates that the issue of preference shares
and securities giving access to preference shares is not
allowed;
3) stipulates that the maximum nominal amount of capital
increases that may be carried out in the near term and/
or the longer term under this authorization cannot
exceed €12 million; it being specified that this overall
maximum amount is set without taking into account
the nominal amount of shares to be issued to preserve
the rights of holders of securities or other rights giving
access to the share capital of the Company, in accordance
with the applicable legal and regulatory provisions and, if
applicable, any contractual conditions providing for other
options to modify the amount;
4) stipulates, furthermore, that the nominal amount of debt
securities of the Company that may be issued under this
authorization, will be a maximum of €750 million or
the equivalent of this amount in a foreign currency or in
monetary units of account established with reference to
several currencies;
5) stipulates that the shareholders may exercise,
in
accordance with the conditions provided for in law,
their pre-emptive rights to subscribe for shares, equity
securities and other securities issued under this r esolution;
6) stipulates that if subscriptions on an irreducible basis
and, if applicable, a reducible basis do not absorb all of
212 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
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7
the shares, equity securities or other securities, the Board
of Directors may offer all or a portion of the unsubscribed
securities to the public ;
7) states that this authorization automatically entails
that the shareholders waive their pre-emptive right to
subscribe to equity securities to which these securities
give entitlement in favor of the holders of the securities
giving access to the Company’s share capital that may be
issued;
8) stipulates that the amount received or that should be
received by the Company for each of the shares issued
under this authorization should be at least equal to the
par value of the shares on the issue date;
9) stipulates that the Board of Directors may, if it deems it
appropriate, deduct the costs and expenses of carrying out
the issues from the issue premium(s), and if applicable,
deduct the sums needed to increase the legal reserve to
one-tenth of the new share capital after each issue from
this amount;
10) stipulates that this authorization cancels and replaces the
authorization with the same purpose that was granted
by the Combined General Meeting of Shareholders of
May 30, 2013 in its ninth resolution.
The authorization thus granted to the Board of Directors is
valid for 26 months from the date of this General Meeting.
❘ Seventeenth resolution
A uthorization of the Board to increase the share capital
through the issue of shares or securities giving access
to other equity securities of the Company or giving rights
to debt securities and to issue securities giving access
to equity securities to be issued of the Company, without
the pre-emptive right of shareholders and through an offer
to the public
The General Meeting of Shareholders, having reviewed the
report of the Board of Directors and the special report of the
Statutory Auditors:
1) delegates to the Board of Directors, in accordance with the
provisions of Articles L. 225-129 to L. 225-129-6, L. 225-
135, L. 225-136, L. 225-148 and L. 228-91 to L. 228-
94 of the French Commercial Code, the authorization to
decide on, through an offer to the public or, if applicable,
subject to the approval of a specific resolution to this
effect by the General Meeting, through an offer pursuant
to section II of Article L. 411-2 of the French Monetary
and Financial Code, in one or several transactions, at the
time or times it selects, in the proportions that they deem
appropriate, both in France and abroad:
a)
the issue of shares and/or equity securities giving
access to other equity securities or giving rights to debt
securities of the Company and/or all other securities
giving access to equity securities of the Company to be
issued,
b)
c)
d)
the issue of shares and/or equity securities giving
access to other equity securities or giving rights to debt
securities of the Company and/or all other securities
giving access to equity securities of the Company to be
issued following the issue by a company, in which it
directly or indirectly holds more than half of the share
capital, equity securities or securities giving access to
equity securities of the Company to be issued,
the issue of shares and/or equity securities and/or
securities by the Company giving access to equity
securities to be issued by a company it directly or
indirectly holds more than half of the share capital,
the issue by the Company of securities giving access
to existing equity securities or giving rights to debt
securities of another company in which the Company
does not directly or indirectly hold more than half of
the share capital.
The Board of Directors may delegate all the powers
necessary to proceed with a capital increase to the Chief
Executive Officer, or with the latter’s agreement, to one
or several Deputy Chief Executive Officers under the
conditions permitted by law.
Such decision automatically entails by law that the
holders of securities that may be issued by subsidiaries
shall benefit from the waiving by the shareholders of their
pre-emptive rights to subscribe for the equity securities to
which these securities give entitlement;
2) stipulates that the maximum nominal amount of capital
increases that may be carried out in the near term and/
or the longer term under this authorization cannot exceed
€12 million; it being specified that this maximum amount
is set without taking into account the nominal amount
of shares to be issued to preserve the rights of holders
of securities or other rights giving access to the share
capital of the Company, in accordance with the applicable
legal and regulatory provisions and, if applicable, any
contractual conditions providing for other options to
modify the amount;
3) stipulates that the nominal amount that may be issued
under this resolution shall be included in the maximum
nominal amount for capital increases of €12 million set
under the sixteenth resolution of this General Meeting of
Shareholders;
4) expressly stipulates that the issue of preference shares
and securities giving access to preference shares is not
allowed;
5) stipulates that this capital increase may lead to the
exercise of an entitlement attached to securities issued by
a company in which the Company directly or indirectly
holds more than half of the share capital, with the latter’s
agreement;
6) stipulates, furthermore, that the nominal amount of debt
securities that may be issued under this authorization,
will be a maximum of €750 million or the equivalent
of this amount in a foreign currency or in monetary
units of account established with reference to several
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currencies, and will be included in the maximum amount
of €750 million set under the sixteenth resolution of this
General Meeting of Shareholders;
7) stipulates to eliminate the pre-emptive rights of
shareholders to subscribe for shares, equity securities and
other securities to be issued, it being understood that the
Board of Directors may give the shareholders a priority
subscription period in respect of all or part of the issue,
for the period and according to the conditions that it will
set, pursuant to the provisions of Article L. 225-135
of the French Commercial Code, and that such priority
subscription period shall not give rise to the creation of
tradable rights;
8) states that this authorization automatically entails by
law that the holders of securities giving access to the
Company’s share capital that may be issued shall benefit
from the waiving by the shareholders of their pre-emptive
rights to subscribe for the equity securities to which these
securities give entitlement;
9) stipulates that the amount received or that should be
received by the Company for each of the shares issued or
to be issued under this resolution will be at least equal to
the minimum value set by the applicable regulation at the
time this authorization is used, i.e. currently the average
weighted share price of the Company on Euronext Paris
on the three trading days prior to the setting of the issue
price, with the option to apply a maximum discount of
5%, with this amount being adjusted later, if applicable,
to take account of differences in dividend eligibility dates;
in whole or
10) stipulates that the Board of Directors may use this
authorization,
in part, to remunerate
securities tendered in a public exchange offer launched by
the Company, within the limits and under the conditions
in Article L. 225-148 of the French
provided for
Commercial Code;
11) stipulates that the Board of Directors may, if it deems it
appropriate, deduct any costs and expenses, including any
fees, of carrying out the issues from the issue premium(s),
and if applicable, deduct the sums needed to increase the
legal reserve to one-tenth of the new share capital after
each issue from this amount;
12) stipulates that this authorization cancels and replaces the
authorization with the same purpose that was granted
by the Combined General Meeting of Shareholders of
May 30, 2013 in its tenth resolution.
The authorization thus granted to the Board of Directors is
valid for 26 months from the date of this General Meeting.
❘ Eighteenth resolution
A uthorization of the Board of Directors to increase the share
capital through the issue of shares or securities giving access
to other equity securities or giving rights to debt securities
and to issue securities giving access to equity securities to be
issued, without pre-emptive rights, in the form of a private
placement, as referred to in section II of Article L. 411-2 of the
French Monetary and Financial Code
The General Meeting of Shareholders, having reviewed the
report of the Board of Directors and the special report of the
Statutory Auditors:
1) delegates to the Board of Directors, in accordance with
the provisions of Articles L. 225-136 of the French
Commercial Code, the authorization to proceed,
in
accordance with and under the conditions set by the
seventeenth resolution of this General Meeting of
Shareholders and within the maximum nominal amount
of €12 million, with the issue of equity or debt securities,
through an offer pursuant to section II of Article L. 411-2
of the French Monetary and Financial Code;
2) stipulates that the maximum nominal amount of capital
increases that may be carried out in the near term and/
or longer term under this authorization shall be included
in the maximum nominal amount for capital increases
of €12 million set under the sixteenth resolution of this
General Meeting of Shareholders;
3) stipulates that this authorization cancels and replaces the
authorization with the same purpose that was granted
by the Combined General Meeting of Shareholders of
May 30, 2013 in its eleventh resolution.
The authorization thus granted to the Board of Directors is
valid for 26 months from the date of this General Meeting.
❘ Nineteenth resolution
A uthorization given to the Board of Directors to increase the
share capital by incorporation of reserves, profits or premiums
The General Meeting of Shareholders, voting in accordance
with the quorum and majority requirements for Ordinary
General Meetings, in accordance with the provisions of Article
L. 225-130 of the French Commercial Code, and after having
reviewed the report of the Board of Directors:
1) delegates, to the Board of Directors, the authorization to
increase the share capital, in one or several transactions,
at the time or times it selects, in the proportions it deems
appropriate, through the incorporation of reserves, profits
or premiums or other sums for which capitalization is
allowed, or through the combination of such a capital
increase with a cash capital increase carried out under
the sixteenth, seventeenth or eighteenth resolutions
of this General Meeting of Shareholders, through the
issue and allocation of free shares or the increase in the
nominal value of existing shares, or by combining the two
transactions, it being specified that the Board of Directors
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may delegate all the powers necessary to proceed with
a capital increase to the Chief Executive Officer, or with
the latter’s agreement, to one or several Deputy Chief
Executive Officers, under the conditions permitted by law;
2) stipulates that the maximum nominal amount of capital
increases that may be carried out under this authorization
cannot exceed €12 million; it being specified that this
maximum amount is set without taking into account
the nominal amount of shares to be issued to preserve
the rights of holders of securities or other rights giving
access to the share capital of the Company, in accordance
with the applicable legal and regulatory provisions and, if
applicable, any contractual conditions providing for other
options to modify the amount;
3) stipulates that this maximum nominal amount shall be
included in the maximum nominal amount of the capital
increases that may be carried out under the sixteenth
resolution of this General Meeting of Shareholders;
4) stipulates that the rights to fractional shares cannot be
traded, and that the corresponding shares shall be sold.
The proceeds from such sales will be allocated to the
rights holders no later than 30 days from the date on
which the whole number of shares allocated is registered
on their accounts;
5) stipulates that the Board of Directors may, if it deems it
appropriate, deduct any costs and expenses, including any
fees, of carrying out the issues from the issue premium(s),
and if applicable, deduct the sums needed to increase the
legal reserve to one-tenth of the new share capital after
each issue from this amount;
6) stipulates that this authorization cancels and replaces the
authorization with the same purpose that was granted
by the Combined General Meeting of Shareholders of
May 30, 2013 in its thirteenth resolution.
The authorization thus granted to the Board of Directors is
valid for 26 months from the date of this General Meeting.
❘ Twentieth resolution
A uthorization of the Board of Directors to increase the capital
through the issue of shares or equity securities giving access
to other equity securities or giving rights to debt securities and
securities giving access to equity securities to be issued, up to
the limit of 10%, to remunerate contributions in kind of shares
or equity-linked securities
The General Meeting of Shareholders, having reviewed the
report of the Board of Directors and the special report of the
Statutory Auditors:
1) delegates to the Board of Directors, in accordance with
the provisions of Articles L. 225-147 of the French
Commercial Code, the powers necessary to increase the
share capital through the issue of shares and/or equity
securities giving access to other equity securities or giving
rights to debt securities of the Company and/or securities
giving access to equity securities of the Company to be
issued, up to the limit of 10% of the share capital, based on
the report of the court-approved expert valuer of in-kind
contributions, in order to remunerate the contributions
in kind made to the Company and comprising of equity
securities or securities giving access to share capital,
where the provisions of Article L. 225-148 of the French
Commercial Code do not apply;
2) stipulates that the Board of Directors will have all the
powers necessary to
implement this authorization,
notably, with regard to determining all the terms
and conditions of the transactions authorized, and in
particular, assessing the contributions and the granting,
if applicable, of special benefits, to decide on the number
of securities to be issued to remunerate contributions in
kind and the dividend eligibility date of the securities to
be issued, to make any applicable deductions from the
contribution premium(s), principally of the fees involved
in carrying out the issues, to record the implementation of
the capital increase and amend the by-laws accordingly,
and, more generally, to make all the appropriate
arrangements, enter into any agreements required and
carry out all the necessary formalities, especially with
regard to the admission to trading of the shares;
3) acknowledges, that this authorization automatically
entails that the shareholders waive their preemptive
rights regarding equity securities of the Company, on
which the securities that would be issued on the basis of
this authorization may grant rights;
4) stipulates that this authorization cancels and replaces the
authorization with the same purpose that was granted
by the Combined General Meeting of Shareholders of
May 30, 2013 in its fourteenth resolution.
The authorization thus granted to the Board of Directors is
valid for 26 months from the date of this General Meeting.
❘
Twenty-first resolution
Authorization granted to the Board of Directors to make
grants of Company shares to the employees and to the
directors of Dassault Systèmes SA and its related companies
The General Meeting, after review of the report of the Board
of Directors and the special report of the Statutory Auditors:
1) authorizes the Board of Directors, in accordance with
Articles L. 225-197-1 et seq. of the French Commercial
Code, to grant, in one or several transactions, free
shares of the Company, existing or to be issued, for the
benefit of employees or certain categories of employees,
determined amongst eligible employees and directors of
the Company or its affiliates as defined by Article L. 225-
197-2 of the French Commercial Code;
2) stipulates that the Board of Directors will determine
the identity of the beneficiaries of the grants as well as
the conditions and, as the case may be, the criteria for
the grants;
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3) stipulates that free share grants made under this
authorization may not give rise to a total number of shares
greater than 2% of the share capital of the Company at
the date of this General Meeting, it being understood
that this amount does not take into account possible
adjustments which may be made pursuant to applicable
legislative and regulatory provisions and, as the case may
be, to contractual terms and conditions providing for
other cases of adjustment, in order to preserve the rights
of the holders of securities or other rights giving access
to the share capital of the Company. Toward this end,
the General Meeting authorizes, if need be, the Board of
Directors to increase the share capital by incorporation of
reserves accordingly;
4) stipulates (a) that the grant of shares to the beneficiaries
will be final after the expiration of an acquisition period
the duration of which will be determined by the Board of
Directors, it being specified that such period may not be
less than two years and (b) that the beneficiaries will be
required to hold the aforementioned shares for a duration
determined by the Board of Directors and which may
not be less than two years as from the final grant of the
shares. However, and without prejudice to the provisions
set forth under Article L. 225-197-1-II of the last
paragraph of the French Commercial Code, the General
Meeting authorizes the Board of Directors, only where the
acquisition period for all or part of one or several grants is
at least equal to four years, to provide for a holding period
of less than two years or to not provide a holding period
for the said shares;
5) stipulates, as an exception to the preceding paragraph, that
in the event that legal or regulatory provisions applicable
to free shares were amended, especially with respect
to reducing or eliminating the minimum acquisition or
holding periods, the Board of Directors could determine
the durations of the acquisition and holding periods of the
granted shares pursuant to the new applicable provisions;
it being stated that the cumulative acquisition and holding
periods cannot be, in any event, less than two years;
6)
furthermore stipulates that in the event of disability of
the beneficiary, as defined under the second or third
categories set out in Article L. 341-4 of the French Social
Security Code, the shares will be definitively granted to
the beneficiary before the expiration of the remainder
of the acquisition period. The said shares may be freely
transferred from the date of their delivery;
7)
this authorization provides, in favor of the beneficiaries
of free share grants, a waiver by the shareholders of their
pre-emptive subscription right to the shares which may
be issued pursuant to this resolution;
8) stipulates that the Board of Directors shall have any and all
powers, including the power of delegation, subject to legal
and regulatory terms, to implement this authorization
under the conditions set forth above and within the limits
authorized by the laws and regulations in effect, and, in
particular, to determine the terms and conditions of each
issuance pursuant to this authorization, to set the dates
after which the new shares will give right to dividends,
to take any measures, as may be decided by it, to protect
the rights of the beneficiaries of the free share grants by
making appropriate adjustments, to record the resulting
capital increases, to amend the by-laws accordingly, and
more generally, to carry out any formalities required for the
issuances, the listing or the administration of the issued
shares and take any measures which may be appropriate
and required by applicable law and regulations;
9) stipulates that this authorization shall be valid for a term
of 38 months from the date of this meeting;
10) stipulates that this authorization shall replace and
supersede the previous authorization of the same nature
granted by the Combined General Meeting of Shareholders
held on May 30, 2013, in its fifteenth resolution.
❘ Twenty-second resolution
A uthorization of the Board of Directors to increase the share
capital for the benefit of members of a corporate savings plan,
without pre-emptive rights
The General Meeting of Shareholders, having reviewed
the report of the Board of Directors and the special report
of the Statutory Auditors, pursuant to the provisions of
Articles L. 3332-1 et seq. of the French Labor Code and
Articles L. 225-138-1 and L. 225-129-6, first and second
paragraphs, of the French Commercial Code:
1) authorizes the Board of Directors to increase the share
capital of the Company, in one or several transactions,
at its sole discretion, by a maximum nominal amount
of €5 million through the issue of new shares or other
securities giving access to the share capital of the
Company under the conditions prescribed by
law,
reserved for members of corporate savings plans of the
Company and/or its affiliated entities within the meaning
of Articles L. 225-180 of the French Commercial Code
and L. 3344-1 of the French Labor Code;
2) stipulates to eliminate the pre-emptive rights of
shareholders to subscribe for the new shares to be
issued or other securities giving access to share capital
and securities to which these securities give entitlement
under this resolution for the benefit of the members of
the plans referred to in the previous paragraph and waives
the rights to the shares or other securities that would be
allocated through the application of this resolution;
3) stipulates that the maximum nominal amount that may
be issued under this authorization shall be included in
the maximum nominal amount for capital increases of
€12 million set under the sixteenth resolution of this
General Meeting of Shareholders;
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4) stipulates that the subscription price for the new shares
will be at least 80% of the average listed price of the
Company’s shares on Euronext Paris in the 20 trading
days preceding the day on which subscriptions open,
where the lock-up period set by the savings plan in
accordance with Article L. 3332-25 of the French Labor
Code is shorter than ten years, and 70% of this average
where the lock-up period is ten years or more. However,
the General Meeting of Shareholders expressly authorizes
the Board of Directors, if it deems it appropriate, to reduce
or cancel the above-mentioned discounts, within the legal
and regulatory limits, in order to take account of, inter
alia, the legal, accounting, tax and social security rules
applicable locally;
5) stipulates that the Board of Directors may also replace all
or part of the discount with the free allocation of shares
or other securities giving access to the share capital
of the Company, whether existing or to be issued, it
being specified that the total benefit resulting from this
allocation and, if applicable, from the discount mentioned
above, cannot exceed the total benefit that members of
the savings plan would have received if this difference
had been 20% or 30%, depending on whether the lock-
up period set by the plan is greater than or equal to ten
years;
6) stipulates that the Board of Directors may proceed, in
accordance with Article L. 3332-21 of the French Labor
Code, the free allocation of shares or other securities
giving access to the share capital of the Company to be
issued or already issued under a bonus scheme, provided
that the inclusion of their monetary value, valued at the
subscription price, does not result in the legal or regulatory
limits being exceeded;
7) stipulates that the characteristics of the other securities
giving access to the share capital of the Company will be
determined by the Board of Directors according to the
conditions laid down by the regulations;
8) stipulates that the Board of Directors will have all the
necessary powers, with the option for delegation or sub-
delegation, in accordance with the legal and regulatory
provisions, within the limits and under the conditions
specified above, to determine all the terms and conditions
of transactions and, in particular, to decide on the amount
to be issued, the issue price and the terms of each issue,
and to define the terms for the free allocation of shares or
other securities giving access to share capital, in application
of the authorization given above, to determine the
opening and closing dates for subscriptions, to set, within
the maximum limit of three years, the period granted to
subscribers to pay for their shares, to determine the date,
which may be retroactive, from which the new shares
will be eligible for dividends, to apply for their admission
to listing on the stock market wherever they are advised
to do so, to record the capital increase in the amount of
shares effectively subscribed for, to make all necessary
arrangements to carry out the capital increases, carry out
all formalities arising therefrom and amend the by-laws
accordingly, and at its sole discretion, and if it deems it
appropriate, to deduct the fees involved in carrying out
the capital increases from the premiums relating to these
capital increases as well as the sums necessary to increase
the legal reserve to one-tenth of the new share capital
after each capital increase;
9) stipulates that this authorization cancels and replaces
all previous authorizations relating to capital increases
reserved for members of corporate savings plans, and in
particular, that granted by the Combined General Meeting
of Shareholders of May 30, 2013 in the seventeenth
resolution;
10) the authorization thus granted to the Board of Directors is
valid for 26 months from the date of this General Meeting.
❘ Twenty-third resolution
Amendments to by-laws
The General Meeting of Shareholders wishes to amend (i)
paragraph 14.2 of the by-laws, which relates to the term of
office of directors, in order to remove any reference to the
transition period of 2009 when certain offices retained the
term of six years instead of four years; (ii) Article 22 of the
by-laws, which relates to regulated agreements, to reflect the
changes arising from the Order of July 31, 2014 on company
law ; and (iii) paragraph 1 of Article 27 of the by-laws, in order
to reflect the new deadline of two business days for admission
to General Meetings arising from Decree no. 2014-1466 of
December 8, 2014, as follows:
“14.2 Age limit – Term of office
The number of directors aged 70 or over cannot exceed half
the members of the Board of Directors at any time. If this limit
is reached, the oldest director other than the Chairman of the
Board shall automatically be considered to have resigned.
The term of office of directors is four years.
The directors’ offices expire at the end of the General
Meeting of Shareholders held to approve the annual financial
statements for the year just ended which takes place during
the year in which their term of office expires.
Directors shall always be eligible for re-election.”
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“Article 22 – Regulated agreements
❘ Twenty-fourth resolution
All agreements, whether direct or through an intermediary,
between the Company and one of its directors, its Chief
Executive Officer, one of its Deputy Chief Executive Officers,
one of its shareholders with more than 10% of the voting
rights, or in the case of shareholder that is a company, the
Company that controls it, within the meaning of Article
L. 233-3 of the French Commercial Code must be submitted
to the Board of Directors for prior authorization.
The same applies to agreements in which one of the persons
referred to in the previous paragraph has an indirect interest.
Prior authorization is also required for any agreement
between the Company and another company if one of the
latter’s directors, Chief Executive Officer or one of the Deputy
Chief Executive Officers is the owner, partner with unlimited
liability, general manager, director, member of the Supervisory
Board, or in general terms, a senior manager of that company.
For the prior authorization of the Board of Directors to be
given, reasons must be given to justify the agreement, based
on its interest to the Company, and in particular, the financial
conditions of the agreement must be specified.
The requirements set out in the previous paragraphs are not
applicable to agreements relating to current operations and
signed under normal conditions, nor to agreements entered
into with a company in which the Company directly or
indirectly holds 100% of the share capital under the conditions
stipulated under the law.”
“Article 27 – Admission to General Meetings of Shareholders
– Powers
1. Every shareholder has the right to participate in the
General Meeting of Shareholders and to vote either in
person or by proxy, provided his/her shares are fully paid-
up, and:
(cid:125) for holders of registered shares: that they are listed in
the registered share accounts held by the Company or its
intermediary at 0:00 a.m. Paris time two business days
prior to the meeting;
(cid:125) for holders of bearer shares: that they are recorded in a
bearer securities account maintained by the accredited
intermediary (bank, financial institution or stockbroking
firm) at 0:00 a.m. (Paris time) two business days prior to
the meeting, and in possession of a shareholder certificate
provided by the latter.”
Approval of the conversion of the Company into a European
company (Societas Europae), and the terms of the conversion
plan and intention to leave unchanged the Board of Directors,
the Statutory Auditors and the authorizations granted to the
Board of Directors by the General Meeting of Shareholders
The General Meeting of Shareholders, after having reviewed:
(cid:125) the Company’s plan for conversion
into a European
company, which was prepared by the Board of Directors
on March 21, 2014 and filed with the clerk's office of the
Commercial Court of Versailles on March 27, 2014 and the
draft of the amended by-laws, which was modified and
then filed on March 24 , 2015;
(cid:125) the report of the Board of Directors explaining and
justifying the legal and financial aspects of the conversion
and describing the consequences for shareholders and for
employees of becoming a European company;
(cid:125) the report by Ernst & Young et Autres and Finexsi, the
auditors appointed, on February 12, 2015 by order of the
President of the Commercial Court of Versailles from the
court-approved list, to appraise the Company’s assets;
(cid:125) the opinion of the Workers’ Council on the Company’s plan for
conversion into a European company dated February 13, 2014.
After having noted that the Company meets the conditions
required by the provisions of Council Regulation (EC)
no. 2157/2001 of October 8, 2001 on European company
status, and in particular, those referred to in Articles 2,
paragraph 4 and 37 of the said regulation and Article L.
225-245-1 of the French Commercial Code, relating to the
conversion of a limited liability company (société anonyme)
into a European company;
a nd after having duly noted that:
(cid:125) the conversion of the Company into a European company
does not entail the dissolution of the Company or the
creation of a new legal entity;
(cid:125) the term of the Company, its purpose and registered office
remain unchanged;
(cid:125) the share capital of the Company remains set at the same
amount and at the same number of shares with a par value
of €0.50 each, which shall remain admitted to trading on
Euronext Paris;
(cid:125) the duration of the current fiscal year, which will end on
December 31, 2015, has not been changed as a result of
the conversion into a European company and the financial
statements for this fiscal year will be drawn up, presented
and audited under the conditions stipulated by the by-laws
of the Company in its new form and the provisions of the
French Commercial Code relating to European companies;
(cid:125) the terms of office of the directors, the Chairman of the
Board of Directors, the Chief Executive Officer and the
Statutory Auditors and Deputy Statutory Auditors in post at
the time of the conversion of the Company into a European
company will continue until their normal respective expiry
dates;
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(cid:125) all authorizations and delegations of powers that have been
and will be granted to the Board of Directors as a limited
liability company (société anonyme) by any General Meeting
of Shareholders of the Company that are valid on the date
of the Company’s conversion into a European company,
will, as of the said date, be automatically transferred to the
Board of Directors of the Company, in its new form as a
European company;
(cid:125) the conversion of the Company into a European company
will be definitive from the date on which it is registered as a
European company with the Versailles trade and companies
registry;
a fter having noted, in accordance with Article 12, paragraph 2
of the above-mentioned regulation, that the registration of the
European company cannot take place before the procedures
relating to the involvement of employees, pursuant to
Articles L. 2531-1 et seq. of the French Labor Code have been
completed;
Approves the conversion of the Company into a European
company (Societas Europae) with a Board of Directors and the
terms of the plan for the conversion of the Company into a
European company, and duly notes that this conversion will
take effect from the date of the registration of the Company
in its new form,
Grants to the Board of Directors all the necessary powers to
(i) record the completion of the negotiations relating to the
terms for the involvement of employees within the European
company and record, if applicable, the signature of an
agreement to this effect, (ii) note, accordingly, that the pre-
condition for the registration of the Company in its new form,
i.e. the completion of the above-mentioned procedures relating
to the involvement of employees, has been fulfilled and (iii)
carry out all the necessary formalities for the registration of
the Company in its new form as a European company.
❘ Twenty-fifh resolution
Approval of the company name of the Company in its new
form as a European company
The General Meeting of Shareholders, having reviewed the
report of the Board of Directors, resolves, subject to the
adoption of the previous resolution, that from the date of
the definitive conversion of the Company into a European
company, the current name of the Company will be followed
by the initials “SE”, in accordance with the provisions of
Article 11 of Council Regulation (EC) no. 2157/2001 of
October 8, 2001 on European company status. The name of
the Company will therefore become “Dassault Systèmes SE”.
This change will be reflected in the by-laws of the Company in
its new form as a European company.
❘ Twenty-sixth resolution
Approval of the by-laws of the Company in its new form as a
European company
In accordance with the decision on the conversion of the
Company into a European company, and having reviewed
the draft by-laws of Dassault Systèmes SE and the report of
the Board of Directors, the General Meeting of Shareholders,
subject to the adoption of the twenty-fourth and twenty-fifth
resolutions, adopts, article by article and then in its entirety,
the text of the by-laws, which, from the date of the definitive
conversion of the Company into a European company, will
govern the Company in its new form. These by-laws will
take effect from the date of the definitive conversion of
the Company into a European company, i.e. the date of its
registration.
The General Meeting of Shareholders duly notes that, subject
to the adoption of the twenty-third resolution, the by-laws of
the European company, as adopted by this resolution, will be
amended to reflect the changes to the by-laws approved in the
said resolution.
A copy of the by-laws of Dassault Systèmes SE is attached to
the minutes provided at this General Meeting of Shareholders.
7
Ordinary and Extraordinary General Meeting
❘ Twenty-seventh resolution
Powers for formalities
The General Meeting hereby grants any and all powers to the bearer of an original, a copy or an excerpt of the minutes of these
deliberations for the purpose of carrying out any legal formalities for publication.
DASSAULT SYSTÈMES ANNUAL REPORT 2014 219
CROSS-REFERENCE TABLES
Annual financial report
The cross-reference table below allows to identify the information included in the annual financial report provided by the
Article L. 451-1-2 of the Monetary and Financial French Code and by the Article 222-3 of the General Regulation of the Autorité
des marchés financiers.
Annual financial report
1. Parent Company Financial Statements
2. Consolidated Financial Statements of the Group
3. Management Report
4. Certification of the Person Responsible for the Reference Document
5. Statutory Auditors Report on the Parent Company Financial Statements
6. Statutory Auditors Report on the Consolidated Financial Statements
7. Principal Accountants Fees and Services
Reference Document
Paragraphs
4.2
4.1
Pages
123
84
See Annual Management report
cross-reference table below
–
4.2.5
4.1.2
5.5
3
145
171
186
220 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Cross-reference tables
Draft Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
T
Annual management report
The cross-reference table below identifies in the Reference Document the information included in the annual management report
to be provided by the Company’s Board of Directors, as required by Articles L. 225-100 and seq. of the French Commercial Code.
Annual management report
1. Business Trends Analysis
2. Analysis of Results
3. Financial Operations Analysis
4. Description of Main Risks and Uncertainties
5. Financial Instruments Use
Reference Document
Paragraphs
Pages
3.1
3.1
3.1
1.6
70
70
70
27
4.1.1 – Notes 2, 21
90,112
6. Risk Factors such as Pricing, Credit, Liquidity in Cash and Treasury
7. Current Delegations to the Board of Directors and their Use during the Fiscal Year 2014
8.
9.
Information Required by the Article L. 225-100-3: Possible Consequences in Case of a Public
Tender Offer
Information Required by the Article L. 225-211 of the French Commercial Code, Relating to the
Shares Repurchases
10. Situation during the Fiscal year 2014
11. Foreseeable Trend of the Situation
12. Substantial Events Occurred since the End of 2014
13. Research & Development Activities
14. Business and Results of Operations of the Parent Company Dassault Systèmes SA
15. Business and Results of the Parent Company’s Subsidiaries during the Fiscal Year 2014
16. 2015 Business Outlook
17. Selected Financial Information of Dassault Systèmes SA over the Last Five Fiscal Years
18. Employees’ Involvement in the Capital of the Issuer the Last Day of the Fiscal Year
19. Compensation and Benefits Granted to each Director (mandataires sociaux)
of Dassault Systèmes in 2014
20. List of the Terms and Responsibilities of the Directors (mandataires sociaux) of Dassault
Systèmes in 2014
21. Social and Environmental Information
1.6.2
6.2.4
5.1.7.2
6.2.5
3.1, 4.1, 4.2
3.1.1.1, 3.2
4.2.3 – Note 23
1.5
1.3, 1.4, 4.2
1.3.2, 1.4
3.1.1.1, 3.2
4.2.4
6.3.1
5.3
5.1.1.1
2
22. Equity Holdings or Controlled Companies, Subsidiaries with a French Head-Office
4.2.3 – Notes 1, 24
23. Table of Transactions in the Company’s Shares by the Management of the Company
24. Information on the Payment Cycles for Suppliers
25. Chairman of the Board’s Report on Corporate Governance and Internal Control
26. Dividends Paid over the Last Three Fiscal Years
5.4
4.2.3 – Note 19
5.1
7.1
34
193
170
195
70, 84, 123
70, 81
142
26
12, 14, 123
13, 14
70, 81
144
196
172
152
37
127, 143
181
126, 140
152
202
T
DASSAULT SYSTÈMES ANNUAL REPORT 2014 221
T Cross-reference tables
Draft Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
Cross-reference table including the European Directive no. 809/2004 – Annex 1 items
The cross-reference table below identifies the information included in the Reference Document, and reflects the transposition of
the European Directive no. 809/2004 in its Annex 1, adopted by the European Commission of April 29, 2004.
European directive – Annex 1 items
1. PERSONS RESPONSIBLE
1.1 Name and function of the persons responsible
1.2 Declaration of the persons responsible
2. STATUTORY AUDITORS
3. SELECTED FINANCIAL INFORMATION
4. RISK FACTORS
5.
INFORMATION ABOUT THE ISSUER
5.1 History and development of the Company
5.2
Investments
6. BUSINESS OVERVIEW
6.1 Principal activities
6.2 Principal markets
6.3
6.4
Exceptional factors
Extent to which the issuer is dependent on patents or licenses, industrial, commercial
or financial contracts or new manufacturing processes
6.5 Basis for any statements made by the issuer regarding its competitive position
7. ORGANIZATIONAL STRUCTURE
7.1 Brief description of the Group
7.2
List of the significant subsidiaries
8. PROPERTY, PLANT AND EQUIPMENT
8.1
Existing or planned material tangible fixed assets
8.2 Any environmental issues that may affect the issuer’s utilization of the tangible fixed
assets
9. OPERATING AND FINANCIAL REVIEW
10. CAPITAL RESOURCES
11. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES
12. TREND INFORMATION
13. PROFIT FORECASTS OR ESTIMATES
14. ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND SENIOR
MANAGEMENT
14.1
Information relating the Board of Directors and Senior Management
14.2 Administrative, Management and Supervisory Bodies and Senior Management
Conflicts of Interests
15. REMUNERATION AND BENEFITS
Reference Document
Paragraphs
Pages
3
3
186
6
27
7
10
14
17
27
14
12
13
5.5
1.1
1.6
1.2.1
1.2.2
1.4.1
1.4.2
None
1.6
1.4.1
1.3.1
1.3.2
1.2.3.3,
4.1.1 – Notes 14,
25
12
105, 118
1.2.3.2
3.1
3.1.4
1.5
1.6.1.1
3.2
11
70
81
26
27
81
5.1.1, 5.1.2
5.1.3
152, 162
163
15.1 Amount of remuneration paid and benefits in kind
5.3
15.2 Amount set aside or accrued to provide pension, retirement or similar benefits
5.3.1 – Table 11
172
176
222 ANNUAL REPORT 2014 DASSAULT SYSTÈMES
Cross-reference tables
Draft Resolutions Proposed by the Board of Directors to the General Meeting of Shareholders on May 28, 2015
T
European directive – Annex 1 items
16. BOARD PRACTICES
16.1 Date of expiration of the current term of office
16.2 Service contracts with the issuer
16.3
Information about the committees
Reference Document
Paragraphs
5.1
5.1.1.1
5.1.3
5.1.1.3
Pages
152
152
163
161
16.4 Statement of compliance with the regime of corporate governance
5.1, 5.1.5
152, 166
17. EMPLOYEES
17.1 Number of employees
17.2 Shareholdings and stock options
17.3 Arrangement involving the employees in the issuer’s capital
18. MAJOR SHAREHOLDERS
18.1 Shareholders having more than 5% of interest in the issuer’s capital or of voting rights
18.2 Existence of different voting rights
18.3 Control of the issuer
18.4 Arrangement, known to the issuer, the operation of which may at a subsequent date
result in a change in control of the issuer
19. RELATED PARTY TRANSACTIONS
20. FINANCIAL INFORMATION CONCERNING THE ISSUER’S ASSETS AND
LIABILITIES, FINANCIAL POSITION AND PROFITS AND LOSSES
20.1 Historical Financial Information
20.2 Pro forma Financial Information
20.3 Financial Statements
20.4 Auditing of Historical Annual Financial Information
20.5 Date of the latest financial statements
20.6
Interim and Other Financial Information
20.7 Dividend Policy
20.8 Legal and Arbitration Proceedings
20.9 Significant Change in the Issuer’s Financial or Trading Position
21. ADDITIONAL INFORMATION
21.1 Share Capital
21.2 Memorandum and By-laws
22. MATERIAL CONTRACTS
23. THIRD-PARTY INFORMATION, EXPERTS’ STATEMENTS AND DECLARATION
OF ANY INTEREST
24. DOCUMENTS AVAILABLE TO THE PUBLIC
25.
INFORMATION ON HOLDINGS
2.1.2
39
5.1.1, 5.3.2
152, 176
None
6.3
6.3.1
6.1.2.3
6.3.2
6.3.3
196
196
190
198
199
4.1.1 – Note 26,
4.2.6, 7.1
84, 119
147, 202
4.1
84
Not applicable
4.1, 4.2
84, 123
4.1.2, 4.2.5, 4.2.6
121, 145, 147
December 31, 2014
T
3.3
7.1
4.3
None
6.2, 6.3
6.1.2
1.4.3
Not applicable
6.1.1.6
1.3.2, 4.1.1 –
Note 27,
4.2.3 – Note 24
82
202
149
192, 196
189
26
188
13, 120
143
DASSAULT SYSTÈMES ANNUAL REPORT 2014 223
224 ANNUAL REPORT 2014 DASSAULT SYSTÈMES