2
0
2
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2018/2019/2020
Universal Registration Document
CONTENTS
1
2
General
Person Responsible
Presentation of the Company
2020 Performance and Strategy
1.1 Key data
1.2 Profile of Dassault Systèmes & Our Purpose
1.3 History and Development of the Company
1.4 Business Activities
1.5 Research and development
1.6 Company Organization
1.7 Financial Summary: five-year historical information
1.8 Extra-financial performance
1.9 Risk Factors
Social, societal and environmental
responsibility
2.1 Sustainability Governance
2.2 Social, societal and environmental risks
2.3 Social responsibility
2.4 Societal responsibility
2.5 Environmental responsibility
2.6 Business Ethics and Vigilance Plan
2.7 Environmental, Social and Governance metrics
2.8 Reporting Methodology
2
3
5
6
8
10
13
18
31
34
36
38
39
47
49
49
50
56
61
67
74
77
2.9
Independent verifier’s report on Consolidated Non-
financial Statement Presented in the management report 80
2.10 Statutory Auditors’ Attestation on the information
relating to the Dassault Systèmes SE’s total amount
paid for sponsorship
3
Financial review and prospects
3.1 Operating and Financial Review
3.2 Financial Objectives
3.3
Interim and Other Financial Information
83
85
86
102
103
4
5
6
7
Financial statements
4.1 Consolidated Financial Statements
4.2 Parent company financial statements
4.3 Legal and Arbitration Proceedings
Corporate governance
5.1 The Board’s Corporate Governance Report
5.2
Internal Control Procedures and Risk Management
5.3 Transactions in Dassault Systèmes shares by the
Management of Dassault Systèmes
5.4
Information on the Statutory Auditors
5.5 Declarations regarding the administrative
and management bodies
105
106
153
184
185
186
229
233
237
237
Information about
Dassault Systèmes SE, the share capital
and the ownership structure
239
6.1
Information about Dassault Systèmes SE
6.2
Information about the Share Capital
6.3
Information about the Shareholders
6.4 Stock Market Information
General Meeting
7.1 Presentation of the Resolutions Proposed
by the Board of Directors to the General
Meeting of May 26, 2021
7.2 Text of the Draft Resolutions Proposed by the Board
of Directors to the General Meeting of May 26, 2021
Cross-reference tables
240
244
247
253
255
256
264
276
UNIVERSAL
REGISTRATION DOCUMENT 2020
ANNUAL FINANCIAL REPORT
This document is an English-language translation of Dassault Systèmes’ Document d’enregistrement universel (Annual Report),
which was filled with the AMF (French Financial Markets Authority) on March 19, 2021, under regulation (UE) 2017/1129
without prior approval in accordance with Article 9 of such regulation. Only the French version of the Document d’enregistrement
universel is legally binding
1
DASSAULT SYSTÈMES ANNUAL REPORT 2020 GENERAL
This Annual Report also includes:
} 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
} the annual management report of Dassault Systèmes SE’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 and L. 22-10-34 et seq. of the French
Commercial Code.
The
index set forth on pages 276 and 277 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”, the
“Group” "we refer to Dassault Systèmes SE and all the
companies included in the scope of consolidation.
“Dassault Systèmes SE” refers only to the European parent
company of the Company, which is governed by French law.
In compliance with Article 19 of European Regulation
no. 2017/1129 of the European Parliament and of the
European Council, the following information is incorporated
by reference in this Annual Report:
} the consolidated financial statements on pages 94 to 137
(inclusive), the parent company financial statements on
pages 143 to 166 (inclusive), and the related audit reports
on pages 138 to 142 and 168 to 172 (inclusive) of the
Annual Report for the year 2019 filed with the AMF on
March 19, 2020, under no. D. 20-0144;
} the financial information on pages 73 to 91 (inclusive) of
the Annual Report for the year 2019 filed with the AMF on
March 19, 2020, under no. D. 20-0144.
} the consolidated financial statements on pages 88 to 129
(inclusive), the parent company financial statements on
pages 135 to 157 (inclusive), and the related audit reports on
pages 130 to 134 and 159 to 163 (inclusive) of the Annual
Report (Document de référence) for the year 2018 filed
with the AMF on March 26, 2019, under no. D. 19- 0202;
} the financial information on pages 69 to 86 (inclusive) of
the Annual Report (Document de référence) for the year
2018 filed with the AMF on March 26, 2019, under no.
D. 19-0202.
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 2020 DASSAULT SYSTÈMES PERSON RESPONSIBLE
Person Responsible for the Annual Report
Bernard Charlès – Vice-Chairman and Chief Executive Officer.
Certification by the Person Responsible
for the Annual Report
Vélizy-Villacoublay, March 19, 2021.
I hereby certify that the information contained in this
Annual Report (Document d’enregistrement universel) is,
to my knowledge, in accordance with the facts and that no
information liable to affect its significance has been omitted.
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 SE and
all the companies included in the scope of consolidation, and
that the “management report”, the content of which is cross-
referenced in a table at page 277, included in this Annual
Report, presents a faithful representation of the business
trends, results and financial situation of Dassault Systèmes SE
and all the companies included in the scope of consolidation
as well as a description of the principal risks and uncertainties
which they face.
Bernard Charlès
Vice-Chairman of the Board of Directors
and Chief Executive Officer
3
DASSAULT SYSTÈMES ANNUAL REPORT 2020 4
ANNUAL REPORT 2020 DASSAULT SYSTÈMES 1
PRESENTATION
OF THE COMPANY
2020 Performance and Strategy
1.1 Key data
1.2 Profile of Dassault Systèmes & Our
Purpose
Our Purpose
1.3 History and Development of the
Company
1.3.1 Summary
1.3.2 Our Summary Timeline
1.4 Business Activities
6
8
10
11
13
13
14
18
Stakeholder Value Creation Model for Dassault Systèmes 18
1.5 Research and development
1.5.1 Overview
1.5.2 Cloud and Services
1.5.3 Intellectual Property
1.5.4 Investments
1.6 Company Organization
31
31
31
32
32
34
1.6.1 Dassault Systèmes SE’s Position within the Company 34
1.6.2 Principal Subsidiaries of the Company
1.7 Financial Summary: five-year
historical information
1.8 Extra-financial performance
1.4.1 Dassault Systèmes
1.4.2 Dassault Systèmes’ Offering
1.4.3 Material Contracts
20
23
30
1.9 Risk Factors
1.9.1 Risks Related to the Dassault Systèmes’ Business
1.9.2 Financial and Market Risks
1.9.3 Insurance
35
36
38
39
39
45
46
5
DASSAULT SYSTÈMES ANNUAL REPORT 2020CONTENTS 1 Presentation of the Company
2020 Performance and Strategy
By Bernard Charlès, Vice-Chairman of the Board and CEO, and Charles Edelstenne, Chairman of the Board
(All figures are non-IFRS and in constant currencies)
How would you describe the way Dassault Systèmes went
through 2020?
strong recovery in the fourth quarter, underscoring its market
leadership in PLM for Home & Lifestyle.
This unprecedented period has been a challenging, learning
and revealing experience, all at the same time. We overcame
the challenge with all our employees, by learning new
working methods of course, but also by paying close attention
to all the situations created by the crisis among our customers,
our distributors, our suppliers and our employees. This crisis
has also played a revealing role and accelerated a number
of trends. It revealed the critical importance of collaborative
innovation across the three sectors we serve as a strategic
partner in value creation. Through close engagement, we
have helped our clients in running their operations during the
pandemic – especially for businesses in the manufacturing
industries. At the same time, our innovation platform also
enabled our clients to prepare for the future and advance their
next generation portfolios for sustainable development.
Summarizing our performance during 2020, it was about
delivering on our objectives, as revised in April due to the
pandemic, with revenue increasing 12% to €4.5 billion.
Our financial results underscored our recurring revenue
resiliency, representing 80% of our total software revenue.
We delivered 2020 diluted net earnings per share (“EPS”) of
€3.77, up 5%. Finally, cash flow from operations increased
5% to €1.24 billion.
We enter 2021 with significant momentum in Life Sciences
anchored by MEDIDATA, which enters this year with 94%
coverage of its annual target revenue thanks to significant
progress achieved in 2020: MEDIDATA expanded its customer
base by 16%, signed record multi-year renewals for Rave
EDC in clinical trials, expanded product line attach rates,
and experienced significant traction with Patient Cloud.
Underscoring our platform offer for Life Sciences, we signed
our first large transaction, combining engagement using on
the one hand, MyMedidata and Rave with manufacturing
operations and, on the other hand, supply chain process
optimization provided by other Dassault Systèmes’ brands.
For small and medium-sized enterprises, we are expanding
our levers of growth with SOLIDWORKS, 3DEXPERIENCE
WORKS, and CENTRIC PLM. During 2020, SOLIDWORKS
welcomed over 20,000 new customers, reached 230,000
paid subscription Draftsight users and saw progressive
traction with 3DEXPERIENCE WORKS. Centric PLM delivered a
Finally, with big industrial companies, we delivered in 2020 a
significant number of 3DEXPERIENCE go lives , which in most
cases, were performed remotely. We also signed a number of
significant transactions, demonstrating our market leadership
and positioning us for improved performance in 2021.
What are Dassault Systèmes strategic prospects?
Our strategy consists in helping in the transformation of
the three major sectors of the economy: Manufacturing
Industries, Life Sciences and Healthcare, and Infrastructure
& Cities. As we look to the next five years, we believe we
are poised to accelerate Dassault Systèmes’ contribution to
those three sectors, leveraging industry platformization and
data intelligence. The Manufacturing Industries sector is
accelerating its sustainable innovation initiatives thus creating
demand for data modeling simulation, and eco-design, a sweet
spot for Dassault Systèmes. For example, we are working with
clients to redefine the future of Mobility, enabling an end-to-
end perspective of the customer experience from conception
to engineering to new mobility services. For our clients, our
solutions are critical to enable them to be the first to market
responding to changing consumer behaviors across many
aspects of their lives. In the Life Sciences & Healthcare sector,
we are working with industry participants to move toward
a patient-centric perspective. Finally, we are advancing
initiatives with multiple industries, government entities and
new emerging disruptors to reinvent Infrastructure & Cities to
create a sustainable future.
Overall, we believe that market opportunities for Dassault
Systèmes are significant. Our underlying five-year plan
includes revenue growth of about 10%, with an operating
margin improvement, together leading to a circa 13% four- year
CAGR for EPS. Our revenue initiatives will likely drive our
Cloud footprint up significantly, representing about €2 billion
in potential cloud software revenue by 2025. Thus, we are
positioned to achieve another doubling of our EPS to about
€6 per share in 2024, driven by 3DEXPERIENCE adoption by
our installed base and the expansion of our customers’ base.
6
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
1
At the outset of 2020, we expanded Dassault Systèmes’
multi- decade ambition – challenging ourselves to help enable
the virtual twin experience of Humans. Adding to our current
capabilities to serve three sectors, with a leading market
position in two of them – Manufacturing Industries and
Life Sciences & Healthcare, we believe that this represents
a potential available market of $100 billion, which we are
addressing with our Research & Development initiatives.
How are the Company's strategic developments structured
around environmental, social and governance issues?
If the year 2020 has taught us anything, it is of the importance
of building a more sustainable, resilient world. To that end, we
announced the launch of Dassault Systèmes’ sustainability
strategy for 2025 and beyond. This is an important milestone
in our journey to become the world’s #1 partner for sustainable
innovation.
As a purpose driven company, we are convinced that Dassault
Systèmes can be a tremendous lever for sustainable innovation
to meet contemporary challenges. To create a better world,
you need to offer solutions enabling to explore what might
be possible and to imagine not just enable the methods of
yesterday or even today. With Accenture, we have co- authored
a study, revealing the critical role of Dassault Systèmes’ virtual
twins bringing 1.3 Trillion dollars of economic value and an
estimated 7.5 Gt CO2 emissions reductions between now and
2030 for five use cases selected in the study. Our handprint is
of essence and, if we are a digital transformation enabler, we
are also critical for energy transition thanks to our ability to
manage the end- to-end lifecycle of products.
At the company-level, we have been committed to reducing
our footprint and operate our activities in a more sustainable
manner. We have therefore set an ambitious target for reducing
our C02 emissions to 5 tons per employee by 2025, and are
going to announce our reduction target this year as part of
the Science Based Targets initiative (SBTi). We are members of
the United Nations Global Compact and the European Union's
Green Digital Coalition. Within the company, a leadership
team directing our environmental initiatives is comprised
of a dedicated Board Director, a member of the Operations
Executive Committee, and a Chief Sustainability Officer.
Looking at social issues, we committed to maintaining our
global people resources, with no outside governmental support
throughout the crisis, as we had done previously in 2009
during the global economic downturn. Moreover, we continued
to invest in expanding our Research & Development teams,
adding critical resources around our data science initiatives,
as our Research and Development is about supporting our
clients’ next generation of innovation.
What is Dassault Systèmes’ outlook for 2021?
Assuming a gradual recovery in the business environment in
2021, we are targeting a revenue growth of 9 to 10% for 2021
and anticipate recurring software revenue to increase by 8 to
9%, with double-digit licenses revenue growth. We are very
progressively transitioning to a cloud and subscription model,
but not at the expense of growth.
In 2020, our operating initiatives enabled us to sustain a
stable organic operating margin, only the dilution related to
the acquisition of MEDIDATA explaining the decrease of our
margin to 30.2%. In 2021, we are aiming for a 60 basis points
improvement, to reach a margin of 30.8%. Our EPS range is
4.10 to 4.15 euros, growing 13 to 14% excluding currency
headwinds.
Hence, we see a year of good organic revenue growth in 2021
and are confident in our mid-term growth drivers thanks to our
Industry Solutions, to our talented teams and to our partners’
ecosystem across the globe
In closing, none of us could have imagined 2020 in advance,
but despite the difficulties, we became closer as a company.
We sincerely want to extend our thanks to our colleagues,
partners and our customers. Moreover, we will not forget the
trust and support we received from financial analysts and
investors.
7
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Key data
1.1 Key data
A Global Company
19,789 employees from 133 countries
290,000 entreprise customers in 11 industries
#33 Forbes World's Best Employers (2020)
188 sites worldwide
12 Brands
An Innovative Company
A Sustainable Company
+7.7% R&D headcount in 2020
41% of total employees in R&D
#48 Forbes World’s Most Innovative Companies (2020)
#35
Fortune Future 50 (2020)
“companies with the strongest long-term
growth potential”
8
A Growing & High-Performance Company
+12%*
€4.5bn* revenue (80% of software
revenue is recurring)
21%*
of the total software revenue comes
from the Life Sciences & Healthcare sector
30.2%* Operating Margin
EPS up 5%*
#2 Fortune Future 50 (2019) Sustainability All Stars
#21
Corporate Knight (2020)
world's most sustainable corporations
#2
in peer group (Software)
AA MSCI Rating (2020)
* Non-IFRS, growth rates in constant
currencies, including end of 2019
Medidata’s acquisition
ANNUAL REPORT 2020 DASSAULT SYSTÈMES
A Global Company
A Growing & High-Performance Company
Presentation of the Company
Key data
1
+12%*
€4.5bn* revenue (80% of software
revenue is recurring)
21%*
of the total software revenue comes
from the Life Sciences & Healthcare sector
30.2%* Operating Margin
EPS up 5%*
An Innovative Company
A Sustainable Company
#2 Fortune Future 50 (2019) Sustainability All Stars
#21
Corporate Knight (2020)
world's most sustainable corporations
#2
in peer group (Software)
AA MSCI Rating (2020)
* Non-IFRS, growth rates in constant
currencies, including end of 2019
Medidata’s acquisition
9
19,789 employees from 133 countries
290,000 entreprise customers in 11 industries
#33 Forbes World's Best Employers (2020)
188 sites worldwide
12 Brands
+7.7% R&D headcount in 2020
41% of total employees in R&D
#48 Forbes World’s Most Innovative Companies (2020)
#35
Fortune Future 50 (2020)
“companies with the strongest long-term
growth potential”
DASSAULT SYSTÈMES ANNUAL REPORT 20201
1 Presentation of the Company
Profile of Dassault Systèmes & Our Purpose
1.2 Profile of Dassault Systèmes & Our Purpose
The purpose of Dassault Systèmes is to provide business and people with 3DEXPERIENCE universes to imagine sustainable
innovations capable of harmonizing product, nature and life.
Dassault Systèmes is a global leader in sustainable innovation.
We provide a virtual experience platform that allows customers
to create innovative new products and services, and ultimately
address the major challenges facing the world today: cities
(how to create cities that are great places to live in?); resources
(how to use them in a sustainable way?); healthcare (how can
it be both globally managed and personalized?); how to supply
and produce; and education and research (how to empower
the workforce of the future?). We stand at the threshold of a
new world, where industry will need to create new landscapes
in terms of what we offer, decide between use case scenarios
and transform the art of how we produce. We believe that
there is a new world to imagine, create and build by combining
science, art and technology. This led us, in 2012, to define our
new horizon which we call 3DEXPERIENCE.
Indeed, achieving a more sustainable future is only possible
by leveraging the virtual world. At Dassault Systèmes
we believe that virtual worlds extend and improve the
real world.
The solutions of Dassault Systèmes transform the way
products are designed, simulated, produced, marketed and
supported, leveraging the virtual world to improve the real
world. We have helped industrials disrupt how products are
designed and produced - with 3D design, with 3D digital
mock-up (DMU), with 3D Product Lifecycle Management
(PLM) and now with 3DEXPERIENCE.
We want to be the catalyst and enabler of the real Industry
Renaissance of the 21st century. Combining the real and the
virtual leads to new ways of inventing, learning, producing
and doing business.
10
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
Profile of Dassault Systèmes & Our Purpose
1
We are a purpose-driven company. Our purpose is at the core
of who we are and why people are joining Dassault Systèmes.
We roll out our strategy by calling on our Strategic
Operational Elements: Brands, Industries and Geos.
and
long-term-oriented
Dassault Systèmes is a science-based, innovation-driven,
business-minded
company.
The Company’s 20,000 employees are driven by this ambition.
This also translates into a high level of market confidence and
trust among our 290,000 enterprise customers in almost
140 countries. We are a European company with a global
presence and market reach.
To fulfill this ambition, our strategy is to focus on Human
Industry Experiences. These three words encapsulate the
conditions to create sustainable innovations.
“Human” means that our ultimate ambition is the human
being. We build on imagination, knowledge and know-how to
make a lasting contribution for the benefit of all. “Industry”
means that we want to offer customers what they value the
most - a sustainable outcome. “Experiences” mean that we
aim to help businesses and people build and live in today’s
new “New World”.
To achieve this strategy, Dassault Systèmes will focus on
developing solutions in Life Sciences & Healthcare alongside
two other strategic sectors of the economy: Manufacturing
Industries and Infrastructure & Cities.
Our Purpose
Dassault Systèmes’ purpose is to provide business and people
with 3DEXPERIENCE universes to imagine sustainable
innovations capable of harmonizing product, nature and life.
It
is based on the premise that,
Through this ambition, we contribute to the improvement of
society and the quality of the environment. “Harmonizing
product, nature and life” is how we define sustainable
innovation.
in the
21st century, with a global population of more than seven
billion, we cannot produce and consume in the same way
that we did in the 20th century when the population was just
2.5 billion. A product cannot be sustainable if its impact on the
environment and on society has not been thought through.
And conversely, product design can be improved by observing
nature and other living creatures.
We believe that we should think about progress in terms of
balance. As we create products, what are we taking from and
Dassault Systèmes’ Brands create great user experiences
and build vibrant user communities. Our Industries develop
Solution Experiences, industry-focused offerings which deliver
specific value to companies and users in a particular industry.
Our twelve Geographies (GEOs) have the responsibility to
make GEOs the driving force for the development of our
business and drive the implementation of our customer- centric
engagement model.
What we sell is Dassault Systèmes’ 3DEXPERIENCE platform.
It is a platform for knowledge and know-how. It aims to
catalyze and enable innovation by allowing businesses
to connect the dots within and outside a company, from
upstream thinking, to design, engineering, manufacturing,
sales & marketing all the way to ownership.
The 3DEXPERIENCE platform is a game-changer in value
creation for organizations because it is the only platform
that’s both a system of operations to run their business and
a business model to transform their business. As a system of
operations, the 3DEXPERIENCE platform enables businesses
to improve their operational excellence. As a business model,
it allows businesses to set up the most innovative value
networks.
The 3DEXPERIENCE platform is structured in four quadrants
encompassing our twelve brands. Our 3DEXPERIENCE
portfolio is comprised of 3D modeling applications, simulation
applications, social and collaborative applications, and
information intelligence applications.
giving back to our planet? “Harmonizing product, nature and
life” lies at the heart of the industry of the 21st century –
the primary driver of innovation and the key to sustainable
enterprise in all sectors of the economy and to progress
in society.
At Dassault Systèmes we believe that virtual worlds extend
and improve the real world. Indeed, achieving a more
sustainable future is only possible by leveraging the virtual
world. This led us, in 2012, to define our new horizon which
we call 3DEXPERIENCE.
When we formulated our company purpose
in 2012
and defined ourselves as the 3DEXPERIENCE Company,
we anticipated that the world would shift from a product
economy to an experience economy that values the usage over
the product.
11
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Profile of Dassault Systèmes & Our Purpose
The experience economy is not just about “user experience”.
It is about the overall balance and impact of any service we
provide to society. This means seeing industry as a value
creation process for people, rather than the “means of
production”. The industry of the 21st century is a network of
creation, production and exchange of experiences.
In 2012 we also dared to imagine that the 3DEXPERIENCE
platform would become the most powerful vehicle
for sustainable
innovation. Our platform clearly met
the challenge.
The platform phenomenon redefines the industry. Far more
than simply a powerhouse of technology, these platforms
provide a holistic approach to innovation and an inspiration for
imagining new offerings.
As it is adopted by new categories of innovators, the
3DEXPERIENCE platform has become the catalyst and enabler
of the Industry Renaissance, today’s global transformation
that brings new ways of inventing, learning, producing and
trading.
Through virtual experiences, augmented reality and realistic
simulation, the virtual revolutionizes our relationship with
knowledge, just like the printing press did in 15th century
Europe. The new book is the experience! Indeed, the virtual
experience adds knowledge and know-how while eliminating
the gap between experimentation and learning. Through
the virtual world, that is today’s library and workshop,
new categories of industrial firms create new categories of
experiences for new categories of customers
Now we extend our focus from things to life.
Since 1981, we have been instrumental in sustainable
innovation for products. In parallel, our ambition to harmonize
product, nature and life has led us to develop a new
understanding of life and nature. Today, we are capable of
applying the knowledge and know-how we acquired in the
non-organic world to the organic – living – world.
With 3D design, we represented the surface of simple objects.
With the 3D digital mock-up (DMU), we represented the
surface and inside of complex systems. With 3D product
lifecycle management (PLM), we represented time. With
3DEXPERIENCE, we represent emotion.
In 2020, Dassault Systèmes announced its ambition to create
the virtual twin experience of the human body. A virtual twin
experience of the human body integrates modeling, simulation,
information intelligence and collaboration. It brings together
biosciences, material sciences and information sciences to
project the data from an object into a complete living virtual
model that can be fully configured and simulated. Industry,
researchers, physicians and even patients can visualize, test,
understand and predict what cannot be seen – from the way
drugs affect a disease to surgical outcomes – before a patient
is treated.
There was a before and an after 1989, the year we created
the first virtual twin of the Boeing 777. There was a before
and an after February 9, 2012, when we shifted the center
of gravity of the industry from product to experience. There
will be a before and an after the virtual twin experience of the
human body.
Our purpose is at the core of who we are and a motivation
for all our employees.
Dassault Systèmes is a science-based, innovation-driven,
business- minded and
long-term-oriented company. The
Company’s 20,000 employees are driven by this ambition.
This also translates into a high level of market confidence
and trust among our 290,000 enterprise customers in almost
140 countries. We are a European company with a global
presence and market reach.
Everything we do is geared to the future and to progress.
As a result, we have among our customers many companies
who are pioneers in their field (robotics, energy, mobility and
more). Our values are the core conditions to create sustainable
innovation and are set to build a questioning mindset, that
we call the IFWE mindset. “IF” refers to our passion to explore
new possibilities and “WE” to our belief that, by connecting
people we can bring about meaningful change.
12
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
History and Development of the Company
1
1.3 History and Development of the Company
1.3.1 Summary
Dassault Systèmes was established in 1981 through the
spin-off of a small team of engineers from Dassault Aviation,
which was developing 3D surfacing modeling software to
design wind tunnel models and reduce cycle times for wind
tunnel testing. We entered into a distribution agreement with
IBM the same year and started to sell our software under the
CATIA brand. With the introduction of our Version 3 (“V3”)
architecture in 1986, we laid the foundations of 3D modeling
for product design. Through our work with large industrial
customers, we 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 a systematic integrated product design.
The Version 4 (“V4”) architecture was thus created, opening
new possibilities to realize full digital mockups (DMU) of any
product. V4-architected software solutions helped customers
reduce the number of physical prototypes and substantially
shorten product development cycle times, while making
global engineering a reality as engineers were able to share
their work across the globe virtually.
13
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
History and Development of the Company
In 1999, we introduced our new Version 5 (“V5”) software
architecture, which served as the foundation for a robust 3D
product lifecycle management (PLM) solution. In conjunction
with our strategy and product portfolio development plans,
we undertook a series of targeted acquisitions to expand our
software applications offering to include digital manufacturing,
realistic simulation, product data management and enterprise
business process collaboration.
Building on our work in 3D, 3D DMU and 3D PLM, we unveiled
in 2012 our 3DEXPERIENCE platform, designed to support our
customers’ innovation processes and deliver truly new and
rewarding experiences for their end-users.
In 2020, we announced the extension of 3DEXPERIENCE from
things to life, with the ambition to invent the dynamic virtual
twin of the human body.
1.3.2 Our Summary Timeline
3D Design and 3D Digital mock-up
` 1981 – Creation of Dassault Systèmes to design products
in 3D through the spin-off of a team of engineers from
Dassault Aviation;
` 1981 – The Company’s flagship brand, CATIA, is launched;
` 1981 – Worldwide marketing, sales and support agreement
with IBM, beginning of a long-standing partnership;
` 1981 – Initial industry focus: automotive and aerospace;
` 1986 – V3 software introduced for 3D Design;
` 1994 – V4 architecture introduced offering a new technology
enabling the full 3D Digital Mock-Up (“DMU”) of a product,
enabling customers to significantly reduce the number of
physical prototypes and to have a complete understanding
of the virtual product;
` 1994 – Expansion of the Company’s industry focus to seven
industries, adding fabrication and assembly, consumer
goods, high-tech, shipbuilding and energy;
` 1996 – Initial public offering in June;
` 1997 – Broadening of our 3D Design offer to the entry 3D
market, with the acquisition of the start-up SOLIDWORKS,
with Windows-native architecture, targeting principally the
2D to 3D market migration opportunity;
` 1997 – Formation of the Company’s Professional channel,
focused on marketing, sales and support of SOLIDWORKS;
` 1998 – Creation of the ENOVIA brand, focused initially on
management of CATIA product data for larger clients with
the acquisition of IBM’s Product Manager software.
Expanding to 3D product lifecycle management
` 1999 – Launch of V5 architecture designed for both
Windows NT and UNIX environments;
` 1999 – Unveiling an expanded addressable market vision:
3D Product Lifecycle Management (PLM) for 3D design,
simulation analysis, digital manufacturing and product data
management;
` 1999 – ENOVIA’s portfolio expanded to product data
management for the small and mid-sized companies
(“SMB”) market with the SmarTeam acquisition;
` 2000 – Creation of the DELMIA brand, initially addressing
the digital manufacturing domain (digital process planning,
robotic simulation and human modeling technology);
` 2005 – Creation of the SIMULIA brand, addressing
realistic simulation, representing a significant expansion
of the Company’s simulation capabilities, leveraging the
acquisition of Abaqus;
` 2005 – Creation of the Company’s Value Solutions sales
indirect channel specifically focused on
channel, an
supporting SMB companies, including suppliers to OEMs.
This channel complemented Dassault Systèmes’ other
indirect channel, Professional channel, which is focused on
SOLIDWORKS users ;
` 2006 – Expansion of the ENOVIA portfolio with the
acquisition of MatrixOne, a global provider of collaborative
PDM software and services;
` 2007 – Amendment of the IBM partnership agreement,
outlining the Company’s progressive assumption of full
responsibility for the Value Solutions channel;
` 2007 – Creation of the 3DVIA brand, to bring 3D technology
to new users to imagine, communicate and experience in 3D;
` 2007 – CATIA offer extended with ICEM acquisition, a
company well-known in the automotive industry for its
styling and high-quality surface modeling and rendering
solutions;
` 2008 – Unveiling of the Company’s V6 architecture;
` 2010 – We acquired full control of our 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 CATIA, ENOVIA and DELMIA brands
principally;
14
ANNUAL REPORT 2020 DASSAULT SYSTÈMES ` 2010 – Acquisition of EXALEAD, as part of long-term objective
around data analytics with search-based applications;
` 2011 – DELMIA’s offering expands with the acquisition
of
Intercim, offering manufacturing and production
management software for advanced and highly regulated
industries;
` 2011 – 100% of the Company’s total revenues are derived
from its wholly-directed three sales channels, completing
the transition from IBM begun in 2005.
Expanding to 3DEXPERIENCE
` 2012 – Expansion of
to
3DEXPERIENCE and expansion of the Company’s purpose,
harmonize product, nature and life. See paragraph 1.2
“Profile of Dassault Systèmes & Our Purpose”;
the Company’s strategy
` 2012 – 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;
` 2012 – Acquisitions of Netvibes, bringing
intelligent
dashboarding capabilities, and SquareClock, providing
cloud-based 3D space planning solutions;
` 2012 – 3DEXPERIENCE
launch announcement and
introduction of the Company’s first Industry Solution
Experiences;
` 2013 – 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,
the 3DEXPERIENCE platform;
` 2013 – Broadening of the Company’s manufacturing
offerings to Manufacturing Operations Management with
the acquisition of Apriso;
` 2014 – Introduction of 3DEXPERIENCE R2014x, the first
release of the Company’s new 3DEXPERIENCE platform,
offering end-to-end and integrated scientific, engineering,
manufacturing and business capabilities and services,
with the V6 architecture as its foundation;
` 2014 – 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;
` 2014 – Creation of a new brand, BIOVIA, addressing
combining
the Company’s
science- based
the acquisition of Accelrys and
internal developments;
principally,
industries
` 2014 – Quintiq acquisition in operations planning and
optimization;
` 2015 – Introduction of 3DEXPERIENCE R2015x, offering
a simplified and improved user experience, with powerful
enhancements that significantly increase productivity on
Presentation of the Company
History and Development of the Company
1
premise as well as on public or private cloud. In addition,
R2015x introduces groupings of applications called “roles”,
to cover industry-specific user needs;
` 2015 – Legal transformation of Dassault Systèmes from
a French public limited company (société anonyme) to a
European company (Societas Europaea, SE). The adoption
of the status of European company well reflected the
international dimension of the Company and its growing
presence throughout Europe;
` 2015 – CATIA’s capabilities were expanded to further
enhance its coverage of complex mechatronics systems
engineering, with the acquisition of Modelon GmbH,
an expert in “ready-to-experience” content for systems
modeling and simulation which are strategic to transform
the Transportation & Mobility industry;
` 2016 – 3DEXPERIENCE 2016x general availability;
` 2016 – Extension of SIMULIA’s multi-physics, multi-scale
offer with the acquisition of CST, a technology leader in
electromagnetic simulation, and the addition of Next Limit
Dynamics, bringing capabilities
in computational fluid
dynamics simulation;
` 2016 – Expansion of
the Company’s DELMIA’s
manufacturing portfolio with the acquisition of Ortems,
focused on production planning and scheduling;
` 2016 – Acquisition of full ownership of 3D PLM Software
Solutions Ltd (3DPLM), our joint venture in India with
Geometric Ltd;
` 2017 – We entered into a new, extended partnership with The
Boeing Corporation. Boeing will expand its deployment of our
products across its commercial aircraft, space and defense
programs. Boeing will be adopting Dassault Systèmes’
3DEXPERIENCE platform for Manufacturing Operations
Management and for Product Lifecycle Management and
extending its usage of our design, engineering simulation
and digital manufacturing software;
` 2017 – Extension of our simulation capabilities with the
acquisition of Exa Corporation for highly dynamic fluid flow
analysis, a complex simulation critical to designers and
engineers at more than 150 leading companies including
Transportation and Mobility, as well as Aerospace and
Defense, Natural Resources, and other industries to evaluate
highly dynamic fluid flow throughout the design process;
` 2017 – Extension of CATIA’s Marine and Offshore industry
capabilities with the acquisition of AITAC B.V., where its
“Smart Drawings” software application is used to automate
the creation of drawings;
` 2017 – Strengthening the management of our cloud
resources and services, increasing our interest in Outscale to
a majority stake, a global provider of enterprise-class cloud
services. Founded in France in 2010, Outscale is an ISO/
IEC 27001:2013 security certified company that provides
enterprise-class cloud computing infrastructure services
(IaaS) to customers through its ten data centers in Europe,
North America and Asia. With this investment, Dassault
15
DASSAULT SYSTÈMES ANNUAL REPORT 20201 ` 2019 – The acquisition of Argosim strengthens Dassault
Systèmes’ simulation and modeling portfolio for embedded
systems;
` 2019 – Acquisition of Elecworks, the suite of CAD
software developed by Trace Software, to better respond
to the challenges posed by electrical product design and
in particular to develop smart products for the high-tech,
equipment and energy industries;
` 2019 – Acquisition of a non-controlling
in
BioSerenity, a firm specializing in the development of
connected medical devices and remote-monitoring solutions
for patients with cardiac, neurological and sleep disorders;
interest
` 2019 – Acquisition of Medidata Solutions, Inc., the world
leader
in clinical testing. Medidata’s clinical expertise
and cloud solutions enable development and marketing
of smarter therapies. With this acquisition, the life and
health sciences industry is now the second largest source
of revenue for Dassault Systèmes, placing it in the forefront
of the virtual transformation of life sciences for the era of
personalized medicine and patient-centered care;
` 2019 – Acquisition of Distene, the developer of market- leading
meshing software;
` 2019 – Launch of the 3DEXPERIENCE WORKS family
of applications aimed at small and midsized companies,
bundling
DELMIAWORKS,
ENOVIAWORKS and SIMULIAWORKS.
SOLIDWORKS,
together
` 2020 – Acquisition of PROXEM, a firm specialized in
semantics software and services bases on artificial
inteligence, to strengthen the collaborative data science
capabilities of the 3DEXPERIENCE platform.
` 2020 – Acquisition of NuoDB, a cloud-native distributed
leader, to advance Dassault Systèmes’
SQL database
3DEXPERIENCE platform cloud and data science strategy.
For further information on acquisitions over the last three
years, see paragraph 1.5.4 “Investments” below.
1 Presentation of the Company
History and Development of the Company
Systèmes is now able to adjust and control its cloud resources
and services to manage peaks in activity, further diversify
its industry segments, deploy new features, and provide
advanced on premise, private and hybrid cloud solutions for
its customers;
` 2018 – Power’By launch as part of 3DEXPERIENCE R2018x
and
introduction of the 3DEXPERIENCE Marketplace.
The objective of Power’By is to enable all customers to benefit
from the 3DEXPERIENCE platform’s value immediately
without any need for migration of legacy data. There are
three levels: to enable social collaboration; to leverage hybrid
data for product configuration and bill of materials; or to use
the full capabilities of the 3DEXPERIENCE platform;
` 2018 – Acquisition of majority ownership of Centric
Software, a privately-owned company present in the domain
of PLM for the fashion, apparel, luxury and retail sectors.
With this investment, Dassault Systèmes aims to accelerate
the digital transformation of companies seeking solutions
for the increasingly complex development of collections that
respond to on-trend and on-demand consumers;
` 2018 – Acquisition of No Magic - a global solutions
company focused on model-based systems engineering,
architecture modeling for software, system of systems
and enterprise business processes modeling - reinforcing
CATIA applications. This provides a “single source of
truth” allowing any user within a company to implement
continuous 3D digital processes and to address all lifecycle
aspects of an experience ;
` 2018 – Acquisition of Cosmologic, a developer of fluid phase
modeling software;
` 2019 – Acquisition of IQMS, a leading manufacturing
ERP software company. Dassault Systèmes extends
the 3DEXPERIENCE platform to small and midsized
manufacturing companies seeking to digitally transform
their business operations. IQMS provides all-in-one solutions to
optimize engineering, manufacturing and business processes;
16
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
History and Development of the Company
1
17
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Business Activities
1.4 Business Activities
Stakeholder Value Creation Model for Dassault Systèmes
Stakeholder Value Creation
Model for Dassault Systèmes
Our Resources
Our
Business
Our Shared Value (Impact)
Intellectual Capital
12 technology portfolios serving the full
innovation cycle
40 years of accumulated industry knowledge
935.4 M€ R&D investment (+26,8%)
Human Capital
19,789 people from133 nationalities
41% working in R&D
Social Capital (Ecosystem)
12,260 people in commercial partners
ecosystem (VaRs & CSI)
150+ scientific & research partners
33.4 M€ in research grants
Financial Capital
Long term & stable shareholders structure
x1.8 adjusted net debt / EBITDAO
1,241M€ operating cash flow
Natural Capital
65,657 MWh of energy (43.9% renewables)
26,982 tCO2-eq in purchase capital goods
18
Our Purpose
To provide business &
people with 3DEXPERIENCE
universes to imagine
sustainable innovation
capable of harmonizing
Product, Nature & Life.
Serving
3 key sectors
Manufacturing
Industries
Life sciences
& Healthcare
Infrastructure
& Cities
Diverse client base
290K customers ranging
from entrepreneurs to
multinationals in
11 industries.
Geographies
12 GEOs drive the
development of our business
in 180+ countries.
Human Industry
Experiences
Dassault Systèmes is a
scientific company serving
science and technology for
a sustainable society.
Flexible solutions
Delivering roles, processes,
& solutions on public/private
cloud or on premise, via
license or subscription, and
accompanied by consulting
and services.
Multi-channel
engagement
Reaching clients and new
markets via direct, indirect and
online through our channels.
Intellectual Capital &
Customer Relationships
44 filed patents
53 granted patents
25 years average length collaboration with our
TOP 20 clients
Human Capital (Employees)
87.6% employees trained
82.5% level of employee pride & satisfaction
99% of employees under permanent contracts
Social Capital (Society)
161 M€ in income tax expenses (24.9% ETR)
38 projects supported via our foundations
6 million students using 3DEXPERIENCE Edu
solutions
Financial Capital (Shareholders)
3.77 € earnings per share (Non-IFRS)
Natural Capital (Environment)
39% CO2 emissions reduction (incl. COVID-19
impacts)
88.3% of main sites offering recycling
ordinary waste (+5% versus 2019)
ANNUAL REPORT 2020 DASSAULT SYSTÈMES
Presentation of the Company
Business Activities
1
Stakeholder Value Creation
Model for Dassault Systèmes
Our Resources
Our
Business
Our Shared Value (Impact)
Intellectual Capital
12 technology portfolios serving the full
innovation cycle
40 years of accumulated industry knowledge
935.4 M€ R&D investment (+26,8%)
Human Capital
19,789 people from133 nationalities
41% working in R&D
Social Capital (Ecosystem)
12,260 people in commercial partners
ecosystem (VaRs & CSI)
150+ scientific & research partners
33.4 M€ in research grants
Financial Capital
Long term & stable shareholders structure
x1.8 adjusted net debt / EBITDAO
1,241M€ operating cash flow
Natural Capital
65,657 MWh of energy (43.9% renewables)
26,982 tCO2-eq in purchase capital goods
Our Purpose
To provide business &
people with 3DEXPERIENCE
universes to imagine
sustainable innovation
capable of harmonizing
Product, Nature & Life.
Serving
3 key sectors
Manufacturing
Industries
Life sciences
& Healthcare
Infrastructure
& Cities
Diverse client base
290K customers ranging
from entrepreneurs to
multinationals in
11 industries.
Geographies
12 GEOs drive the
development of our business
in 180+ countries.
Human Industry
Experiences
Dassault Systèmes is a
scientific company serving
science and technology for
a sustainable society.
Flexible solutions
Delivering roles, processes,
& solutions on public/private
cloud or on premise, via
license or subscription, and
accompanied by consulting
and services.
Multi-channel
engagement
Reaching clients and new
markets via direct, indirect and
online through our channels.
Intellectual Capital &
Customer Relationships
44 filed patents
53 granted patents
25 years average length collaboration with our
TOP 20 clients
Human Capital (Employees)
87.6% employees trained
82.5% level of employee pride & satisfaction
99% of employees under permanent contracts
Social Capital (Society)
161 M€ in income tax expenses (24.9% ETR)
38 projects supported via our foundations
6 million students using 3DEXPERIENCE Edu
solutions
Financial Capital (Shareholders)
3.77 € earnings per share (Non-IFRS)
Natural Capital (Environment)
39% CO2 emissions reduction (incl. COVID-19
impacts)
88.3% of main sites offering recycling
ordinary waste (+5% versus 2019)
19
DASSAULT SYSTÈMES ANNUAL REPORT 20201
1 Presentation of the Company
Business Activities
1.4.1 Dassault Systèmes
1.4.1.1 Our Strategy: Human Industry
Experiences
To fulfill this ambition toward sustainable innovation
encapsulated in our corporate purpose, our strategy is to
focus on Human Industry Experiences.
In 2020, we evolved our strategy from Social Industry
Experiences to Human Industry Experiences.
“Human” means that our ultimate ambition and primary
resource are one and the same, the human being.
We build on imagination, knowledge and know-how to
make a lasting contribution for the benefit of all. We firmly
believe that the greatest value of virtual worlds lies in the
potential it offers for imagining the future, much more than
exponential computing capability. We are also convinced that
tomorrow’s leaders will not be those with the most automated
production systems, but those with the best-developed legacy
of knowledge and know-how, whose business environments
involve suppliers as full-fledged partners in value creation.
Industry is about offering what customers value the most,
that is to say creating the knowledge and know-how needed
to match closely the needs of the industries we address.
To succeed in the experience economy, it is no longer enough
to be an expert in a specific technology or production method.
You need to be an expert in experience, in other words have
a deep understanding of usages. The “customer’s world” is
what, at Dassault Systèmes, we call “Industry”. Our customers
do not expect us to provide them with a technology but
rather that this technology helps their organization grow and
move forward. To meet those challenges, we offer Industry
Solutions on the 3DEXPERIENCE platform that are tailored for
each of the industries we serve.
“Experiences” mean that we aim to help businesses and
people build and live in today’s new “New World”.
The 20th century was the century of products; today, we have
entered the experience economy. The usage holds more value
that the object itself. This phenomenon is poised to touch all
sectors of the economy- from the very nature of offerings to
the buying decision- and all areas of our everyday lives, both
at home and in the workplace.
To achieve this Human Industry Experiences strategy,
Dassault Systèmes will focus on developing its leadership
in Life Sciences & Healthcare alongside two other strategic
sectors of the economy: Manufacturing Industries and
Infrastructure & Cities.
These sectors share similar development processes and
sustainability needs in their efforts to improve quality of
life, whether through more affordable and precise therapies,
optimized infrastructures, or better use of the environment.
1.4.1.2
Strategic operational elements
We roll out our strategy by calling on our Strategic Operational
Elements: Brands, Industries and Geos.
Brands
Dassault Systèmes’ Brands create great user experiences
and build vibrant user communities. With our twelve brands,
powered by the 3DEXPERIENCE platform, we have the
broadest portfolio of software applications in the market.
Our brands are organized into four quadrants around the
compass that symbolizes our platform:
} social and collaborative applications: 3DEXCITE, CENTRIC
PLM, ENOVIA;
} 3D modeling applications: SOLIDWORKS, CATIA, GEOVIA,
BIOVIA;
} simulation applications: SIMULIA, DELMIA, 3DVIA;
} information intelligence applications: NETVIBES, MEDIDATA.
Industries
Dassault Systèmes’ Industries develop Solution Experiences,
industry-focused offerings which deliver specific value
to companies and users in a particular industry. Dassault
Systèmes serves eleven industries structured into three
sectors: Manufacturing Industries (Transportation & Mobility;
Industrial
Aerospace & Defense; Marine & Offshore;
Equipment; High- Tech; Home & Lifestyle; Consumer Packaged
Goods & Retail) – Life Sciences & Healthcare (Life Sciences) –
Infrastructure & Cities (Energy & Materials; Construction, Cities
and Territories; Business Services).
Geos
Our twelve GEOs have the responsibility to drive the
development of our business and the implementation of
our customer-centric engagement model. To do so, they will
also leverage our strong network of local customers, users,
partners, and influencers.
20
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
Business Activities
1
1.4.1.3
Key Competitive Strengths
of Dassault Systèmes
Dassault Systèmes is a World leader in industry transformation.
The company benefits from unique assets, allowing it to engage
in the new ambition announced in February 2020: achieve
the virtual twin experience of Human. After accompanying
the economy transition from product to experience, Dassault
Systèmes will thus serve the new transition “from things
to life”.
Dassault Systèmes is a scientific company. It is positioned at
the heart of Industry Renaissance by combining art, science
and technology for a sustainable society.
The company defines itself by its purpose of “harmonizing
products, nature and life”. Its distinctive DNA gives it the
ability to scientifically model and accurately represent the
world through a multidiscipline and multiscale approach.
Built on the notion of “virtual twin experience”, our Industry
Solutions Experiences portfolio relies on a deep understanding
of industrial processes.
Dassault Systèmes has acquired its longstanding leadership
position through its ability to define new markets and
create new offers, expanding from 3D design and 3D
digital mock-ups to product lifecycle management and now
3DEXPERIENCE. This market leadership is underpinned by a
clear and strong commitment to innovation in all its forms,
either internally at Dassault Systèmes or with our customers
and their ecosystems.
Dassault Systèmes therefore strongly invests in R&D, with a
long-term view. Important areas of investment in R&D include
the 3DEXPERIENCE business platform architecture, modeling
technologies (3D, systems engineering, natural resources and
biosystems), technologies for realistic simulation of products,
production processes and usage, technologies for intelligence
information (artificial intelligence, optimization, big data
analytics, with a notable focus on healthcare) and connectivity
technologies (for social or structured collaboration and program
management & compliance). The Company’s R&D efforts
aim at always advancing breakthrough user experiences and
expanding the usage domain through immersive experiences,
native cloud and mobility solutions.
Dassault Systèmes’ long-term vision is supported by a solid
financial model with a high level of recurring software
revenue.
leadership requires
We believe that sustainable market
such a long-term vision realized by investing in people
and maintaining a long-term financial model. We have a
diverse, highly educated workforce, which as of the end
of 2020 totaled 19,789 employees from 133 countries.
The Company’s financial model, with a high level of recurring
software revenue representing 80% of our total non-IFRS
software revenue in 2020, has enabled us to maintain and
indeed increase investments in R&D and customer support.
The significant level of diversification of Dassault Systèmes
revenue across eleven industries and twelve geos supports
a robust and sustained growth even through unsteady
macroeconomic context.
Dassault Systèmes’ 3DEXPERIENCE software applications
have been integral to our success and continue to be the
principal areas of investment through internal research and
development and selective acquisitions.
Our 3DEXPERIENCE portfolio is comprised of 3D modeling,
simulation, social and collaborative applications, and
intelligence applications. One of our key
information
objectives is to create a portfolio of brands that are leaders in
their respective markets (see paragraph 1.4.2.3 “Our Software
Applications Portfolio”). In support of our “Human Industry
Experiences” strategy, our portfolio architecture is designed
to create value at three levels: Solutions for the company,
Processes for the organization or team, and Roles & Apps for
each user. Dassault Systèmes thus contributes to transform
industries by creating the new jobs for the workforce of the
future, notably around its "3DEXPERIENCE EDU” initiatives.
Dassault Systèmes has a diverse customer base in terms
of size and geographic origin. Our clients range from the
smallest companies in the world to global leaders and the
disruptors who redefine their industry in the 21st century.
We distribute our products through direct and indirect sales
channels, working with our commercial partners. And we are
continuing to pursue our strategy of customer and market
diversification.
Dassault Systèmes has forged a strong and vibrant ecosystem
of commercial and software development partners,
technology and education institutes, research bodies and
systems integrators. Dassault Systèmes also supports a
wide ecosystem of start-ups around its "3DEXPERIENCE
LAB” initiative.
Since its inception in 1981, Dassault Systèmes has worked
in close partnership with other professionals in software
development and technology, in sales and marketing, in
services and in education and research. More recently, we
have extended our relationships with systems integrators
offering strong industry expertise and regional presence
for both sales and services. The Company has a strong
ecosystem of more than 400 software development partners
building applications to complement its software portfolio.
The 3DEXPERIENCE Marketplace gathers around 300 partners
providing “make” or “engineering” services or sharing data
on parts (PartSupply). With its sights on the future, Dassault
Systèmes is working closely with academic, research and
medical organizations around the world to equip students with
a learning environment augmented by virtual technologies.
21
DASSAULT SYSTÈMES ANNUAL REPORT 20201 } Domain diversification: We continue to invest in expanding
the coverage of each of our brands and in broadening
their respective bases. Within a company or ecosystem,
our applications now cover a large portion of employees
working to create the product experience for the end-user,
from design, engineering and simulation to production,
quality assurance and compliance, operations planning,
marketing and points of sale. For further information, see
paragraph 1.4.2 “Dassault Systèmes’ offering”;
} Geographic diversification: We have identified opportunities
to step up our presence and strengthen and expand our
global footprint, through twelve regional field organizations
designed to drive the Company’s growth initiatives at local
level and stay closely aligned with our customers’ needs;
} Acquisitions expanding our addressable market: Acquisitions
are consistent with our purpose and strategy. We review
potential acquisitions that expand the domain expertise
of our brands, enhance our industry offering and address
our customers’ growing needs. To execute this strategy
and create brand value, we complement our internal
developments through key selected acquisitions. For further
information, see paragraphs 1.4.2 “Dassault Systèmes’
offering”, 1.5 “Research and Development” and 1.5.4
“Investments”;
} Sustainable
innovation
industry: Through
its
for
ambition to assist its customers in developing sustainable
innovations, Dassault Systèmes is meeting the sustainable
development challenges of the 21st century head on
and thus nurturing significant commercial opportunities
through the transformation of global industries.
For a description of the challenges that must be met to
maintain growth, see paragraph 1.9.1 “Risks Related to the
Dassault Systèmes’ Business”.
1 Presentation of the Company
Business Activities
1.4.1.4 Growth Strategy
Based on our 3DEXPERIENCE platform and software portfolio,
we estimate that our current total addressable market (TAM)
in the software domain is approximately $41 billion, based on
external data as of end 2019. Dassault Systèmes benefits from
large levers for further growth with a potentially accessible
market (PAM) amounting to $100 billion. This addressable
market is split across the three main economic sectors served
by Dassault Systèmes: manufacturing industries ($24 billion
TAM),
($8 billion TAM),
infrastructures and cities ($9 billion TAM).
lifesciences and healthcare
Dassault Systèmes is developing its business through several
growth drivers, notably:
} 3DEXPERIENCE platform:
this platform offers
two
complementary opportunities. First, it is a system of
operations enabling users to achieve business excellence;
second, it provides a business model to connect clients and
partners through a global network including marketplace
services. The platform is also the favorite channel for
relationship between Dassault Systèmes and its clients,
allowing to capitalize and accelerate customer experience;
} Industry diversification: Dassault Systèmes provides
tailored solutions for eleven vertical industry sectors.
These solutions are structured within a broad portfolio of
Industry Solution Experiences, Industry Process Experiences
and roles. We therefore have many opportunities to
expand our presence in each of our target industrial
sectors, notably through coverage of new sub-segments.
For further information, see paragraph 1.4.2.1 “Industries
and Customers”;
} Cloud and mobile applications bringing new users and
usages: The 3DEXPERIENCE platform is built around an
online architecture. With our portfolio now increasingly
accessible in the cloud, we have new opportunities to
develop our cloud and mobile offerings to reach new users
and usages. For further information, see paragraph 1.5
“Research and Development”;
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1
1.4.2 Dassault Systèmes’ Offering
1.4.2.1
Industries and Customers
Every day our customers turn industry challenges into
business opportunities and deliver value to their customers.
The 3DEXPERIENCE platform combines applications, content
and services to help them conceive innovative solutions.
Our customer base is comprised of global leaders, mid-market
companies, small companies and startups, and also includes
government and educational institutions.
Our market strategy is industry-based. Commencing in 2012,
we undertook a significant shift in this strategy, moving to
a multiyear industry-focused approach aligned with the key
business objectives and processes of our target industries and
market segments.
For 2020, we have grouped the eleven industries we serve into three main sectors of the economy: Manufacturing Industries, Life
Sciences & Healthcare, and Infrastructures & Cities.
Each of our eleven industries is divided into market segments.
Sector/Industry
MANUFACTURING INDUSTRIES
Transportation & Mobility
Aerospace & Defense
Marine & Offshore
Industrial Equipment
High-Tech
Home & Lifestyle
Consumer Packaged Goods & Retail
LIFE SCIENCES & HEALTHCARE
Life Sciences
INFRASTRUCTURE & CITIES
Energy & Materials
Construction, Cities & Territories
Market Segments We Address
Cars & Light Trucks OEMs, Racing Cars, Motorcycles, Transportation and Mobility
Industry Suppliers, Trucks and Buses, Trains
Airframe OEMs, Aerospace Industry Suppliers, Propulsion, Defense, Airlines, Space
Naval Shipyards, Commercial Shipyards, Offshore, Yachts & Workboats, Marine
Suppliers, Marine & Offshore Specialists
Industrial Robots, Machine Tools & 3D printers, Specialized Manufacturing Machinery,
Heavy Mobile Machinery & Equipment, Building Equipment, Power & Fluidic
Equipment, Fabricated Metal & Plastics Products, Tire Manufacturers, Professional
Services
Consumer Electronics, Security, Control & Instrumentation, Computing,
Software & Communications, Contract Manufacturing Services, Technology Suppliers,
Semiconductors, Telecom & Media Operators
Furniture & Home Goods, Sports & Leisure Goods, Fashion & Luxury Goods,
Specialist Retailers
Food & Beverage, Beauty & Personal Care, Household Products, Packaging,
General Retailers
Pharmaceuticals & Biotech, Medical Devices & Equipment, Patient Care
Mining, Metals & Materials, Oil & Gas, Chemicals, Power
Cities & Territorial Authorities, Utilities, Transportation Infrastructure, Buildings &
Facilities, Construction Products & Services, Agriculture and Forestry
Business Services
Banking & Financial Markets, Insurance, Logistics Solutions, Education
The composition of our non-IFRS software revenue
in
2020 by our main industries was approximately as follows:
Transportation & Mobility about 24% (29% in 2019); Life
Sciences: about 21% (8% in 2019) Industrial Equipment about
18% (16% in 2019); Aerospace & Defense about 13% (14%
in 2019).
1.4.2.2
3DEXPERIENCE platform
Virtual experience platforms for industry, urban development
and healthcare will become the infrastructures of the
21st century.
Today, the sustainable innovation model is predicated on
creating holistic experiences. Only by connecting all the
dots between people, ideas, and data can a business create
differentiating customer experiences and drive consumer
loyalty, engagement, and value.
Dassault Systèmes’ 3DEXPERIENCE platform catalyzes and
fuels innovation, enabling businesses to connect the dots
within and outside a Company, from upstream thinking to
design, engineering, manufacturing and sales & marketing,
all the way to ownership.
The 3DEXPERIENCE platform is a game-changer in delivering
value to businesses because it is the only platform that is
both a system of operations to run their business and a
business model to transform it. As a system of operations,
the 3DEXPERIENCE platform enables businesses to enhance
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DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Business Activities
their operational excellence; and as a business model,
it helps them to create the most innovative value networks.
Our platform offers both a fresh approach to innovation by
connecting R&D, engineering, production, marketing and end-
users, and an innovative business model directly linking sellers
and buyers, purchasers and subcontractors, service providers
and end-customers.
The 3DEXPERIENCE platform powers by enriching them
the twelve Dassault Systèmes brands and addresses the
needs of the eleven industries we serve. It connects all
Dassault Systèmes applications, as well as those deployed by
our customers. It allows everyone involved in an innovation
project—from the research lab to the consumer—to work
together, while giving them unified access to all the necessary
data.
The 3DEXPERIENCE platform as a system
of operations
Our platform provides all organizations with a holistic
real- time vision of their own business and ecosystem, unifying
all of their activities from engineering, manufacturing and
marketing to value networks and end-customers in a single
collaborative and interactive environment.
It thus empowers them to test consumer experiences
holistically before actually producing them.
As a system of operations, the 3DEXPERIENCE platform
delivers value to 3 audiences:
} for companies looking to transform their business: Industry
Solution Experiences;
} for efficient teams: Industry Process Experiences;
} for Champion users: Roles & Apps.
The 3DEXPERIENCE platform as a business model
The 3DEXPERIENCE platform is meant to be a catalyst fueling
innovation for companies looking to adopt a platform-based
business model.
This is why the platform also acts as a marketplace, connecting
service providers (3D printing, design, etc.) and buyers.
Through our 3DEXPERIENCE Marketplace, we offer a seamless
way to connect companies and providers, giving them a single
unified environment to manage the entire value network.
The 3DEXPERIENCE Marketplace spans the full design,
engineering and virtual manufacturing processes. The first
two services are Make, for on-demand manufacturing, and
Part Supply, for intelligent part sourcing.
The Marketplace offers two categories of services:
} community services are available to everyone. All users in
our installed base have access to our 3DEXPERIENCE Cloud
platform and can buy or sell on the Marketplace. They can
also select partners according to specific criteria, and we
process the actual transactions;
} enterprise services give companies the ability to have
their own private Marketplace. We check their credentials
to qualify for more advanced dynamic services, and also
conduct transactions.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES 1.4.2.3 Our Software Applications Portfolio
3DS Brands by quadrants of the Compass
Symbolized by the Compass, the 3DEXPERIENCE platform
is structured
four quadrants encompassing our
twelve Brands.
in
3D Modeling Applications
SOLIDWORKS – Authentic Design Experience
SOLIDWORKS is focused on providing design solutions that are
simple to use and deploy, yet very powerful and accurate.
SOLIDWORKS solutions are multi-disciplinary and cover 3D
design, electrical and printed circuit board design, product
data management, simulation, manufacturing and technical
communication. All SOLIDWORKS solutions are integrated in
the 3DEXPERIENCE platform. SOLIDWORKS is also defining
the future of design with a new lineage of 3DEXPERIENCE
applications—“X” Apps—that run on any device with an
internet browser and offer an innovative design guidance
approach.
Industry leaders, SOLIDWORKS programs also have great
success with early adopters, for example in the field of
education, where we are present in more than 80% of the
world’s top engineering schools, and in fablabs, maker spaces
and innovation accelerators.
Presentation of the Company
Business Activities
1
CATIA – Shape the World We Live in
CATIA
leading solution spanning the complete
development and innovation process, from early concept
definition to experience delivery.
is the
CATIA shifts traditional 3D CAD (computer-aided design)
expectations to cognitive augmented design, which fuses
simulation and modeling. Leveraging knowledge, know-how
and proven technology to automate design and systems
engineering, CATIA is helping to shape a connected world by
offering all the features for design of connected objects and
experiences powered by cyber-systems.
CATIA affords an intuitive user experience, powered by 3D,
Web services, and mobile and augmented reality technologies.
CATIA ultimately allows innovator social communities to
collaborate virtually and co-design experiences.
Lastly, through its cyber-physical systems modeling and
simulation capabilities, CATIA is integral to 3DEXPERIENCE-
based industry solutions for model-based systems engineering,
enterprise architecture, concept modeling, and ontologies.
These solutions enable global industry leaders to develop the
“internet of Experiences”—the smart and autonomous virtual
experiences that digitally connect products, nature and life in
the real world.
GEOVIA – Model the Planet
GEOVIA combines Earth sciences and engineering to connect
the natural and built environments and ultimately drive
sustained safety, predictability and productivity. Leveraging
the 3DEXPERIENCE platform, GEOVIA provides a single source
of truth to a community of geoscientists and engineers,
helping them to discover, model and harness the planet’s
resources fairly for the benefit of people, businesses and
governments.
GEOVIA’s solutions allow our customers
to optimize
their business processes through a unique and powerful
combination of scientific applications and collaborative
capabilities enabling data transparency.
In recent years, GEOVIA has helped its mining customers
to return to growth thanks to the increasing uptake of
3DEXPERIENCE and to its fit-for-purpose portfolio of geology
and mine planning applications. At the same time, GEOVIA has
initiated a diversification strategy aimed at delivering value for
civil engineering by informing the design and engineering of
heavy infrastructures.
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DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
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BIOVIA – Model the Biosphere
BIOVIA provides the scientific community with advanced
biological, chemical and materials science experiences to
create a healthier, more livable and sustainable world. BIOVIA
spurs scientific collaboration by making science accessible
through democratizing knowledge and know-how, driving
scientific innovation to achieve sustainable development
by creating new materials and identifying and developing
targeted life- saving therapeutics.
BIOVIA is uniquely positioned to provide high value to
science- driven companies, giving them the means to model,
simulate, organize, analyze and share data in unprecedented
ways. It offers solutions for research, formulation, development
processes, manufacturing and quality. BIOVIA connects the
virtual world of scientific modeling and simulation with the
real world of scientific physical laboratory experimentation
through data science and artificial intelligence. Partnerships
leveraging BIOVIA’s deep long-term scientific expertise are
advancing
increasing productivity while
assuring regulatory compliance, reducing costs and shortening
time to market.
innovation and
Simulation Applications
The 3DEXPERIENCE platform lets you test possible scenarios
against reality.
logistics operations and consumer usages
is made possible by real-time realistic
3DEXPERIENCE
simulation. Dassault Systèmes has made big investments
in technologies and services to simulate complex behaviors,
system execution, additive manufacturing
production
processes,
in
everyday life. It has unique assets for complexity management
and multiscale, multidiscipline simulation (structures, fluids,
electromagnetics, acoustics, etc.). Building simulation into the
design and virtual manufacturing process makes it possible to
optimize product design in accordance with the manufacturing
process and with robustness, weight, and cost constraints.
industry processes
SIMULIA – Reveal the World We Live in
SIMULIA helps the scientific and engineering communities
reveal the world we live in through realistic simulation of
products, nature and life. We provide robust, high-added- value,
for virtual engineering
end-to-end
that employ state- of- the- art connected multidisciplinary-
multiscale simulation applications. Using SIMULIA applications
to simulate behavior in the fields of electromagnetics, fluids,
structures and vibroacoustics, product development teams are
able to reduce testing, increase reliability and quality, and get
to market faster.
As an integral part of the 3DEXPERIENCE platform, SIMULIA
applications power sustainable innovation at all stages of the
product lifecycle from product requirements to design and
manufacturing data and in-use scenarios.
DELMIA – MAKE It Happen
A key feature of Dassault Systèmes’ 3DEXPERIENCE
platform is the connection between the virtual and real
worlds. Operational excellence requires harmonized design,
production, distribution, human resources management
and processes. DELMIA enables global industrial operations
to design and test the manufacturability of products in a
simulated, virtual environment; optimize the supply chain;
and operate factories, warehouses and distribution to manage
and fulfill customer demand.
3DVIA – Shape Your Dream
3DVIA helps consumers make important buying decisions in
their daily lives by delivering a fast, rich and visually stunning
3D experience for 3D space planning. The brand is driving
growth and proliferation of 3D among consumers via two
separate target audiences.
For consumers and
interior designers, the HomeByMe
application offers a free tool for consumers and is currently
used by over 2.3 million people to create images online every
40 seconds. Our professional subscriptions enable interior
designers to offer their customers a game-changing level of
speed, responsiveness, ease of use and visual impact with
360° virtual reality and augmented reality. For retailers, 3DVIA
offers two products that support a virtual omnichannel buying
experience: HomeByMe for Kitchen Retailers and HomeByMe
for Home Retailers. These products afford an interactive 3D
room-planning experience dedicated to furniture retailers and
their customers.
Information Intelligence Applications
The 3DEXPERIENCE platform allows you to calibrate and
contextualize experiences considering all the information
within and outside the Company.
The 3DEXPERIENCE platform provides unique intelligent
information, artificial intelligence, semantic indexing and
search capabilities. Leveraging the ultimate new data
science, machine learning technologies and modeling, the
3DEXPERIENCE platform makes it possible to understand,
analyze, correlate, infer, describe, predict and prescript very
complex information. This profound dialogue between the
virtual model and data is unique to Dassault Systèmes and
cannot be found elsewhere.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
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NETVIBES – Reveal Information Intelligence
In 2020, Netvibes, Exalead and PROXEM solutions have been
brought under one single and powerful brand, NETVIBES.
Social and Collaborative Applications
The 3DEXPERIENCE platform allows you to bring together
and catalyze a diversity of talents.
} NETVIBES transforms massive
into
actionable insight, providing industry perspective (including
customers, industry & market trends or competition).
information flows
} NETVIBES transforms intuition into real world evidence,
augmenting the virtual twin experience with contextualized
real world data.
} NETVIBES elevates any individual experience to reusable
knowledge and knowhow, transforming all historical actions,
documents, interactions into an enterprise patrimony.
MEDIDATA - Power Smarter Treatments for Healthier
People
MEDIDATA is leading the digital transformation of life sciences.
MEDIDATA, is dedicated to improving the way clinical research
is designed, conducted, analyzed, and utilized. Its ultimate
goals is to bring the right therapy to the right patient at the
right time and transform patient experience.
An enormous amount of safety and effectiveness information
is needed to gain regulatory approval for a new therapeutic
or diagnostic. Today, billions of data points exist in silos, in
different formats, across medical centers around the world.
MEDIDATA collects, cleans, standardizes, manages, and
analyzes numerous data types to support clinical development
and commercialization in more than 120 countries. Discovering
and modeling clinical insights helps pharmaceutical, biotech,
medical device and diagnostic companies, and academic
researchers accelerate value, minimize risk, and optimize
outcomes from their research programs.
MEDIDATA, comprising nearly 22,000 trials and nearly
six million patients, is always exploring new concepts and
techniques to introduce the next generation of solutions;
ones that can make precision medicine a reality across the
entire continuum of clinical development. ACORN AI, by
MEDIDATA, uses advanced analytics to uncover actionable
insights that accelerate breakthrough clinical innovations, and
optimize study execution and commercial success. Powered
by the 3DEXPERIENCE platform, MEDIDATA provides offers
end-to-end capabilities ‘including discovery, development,
insight generation, modeling, and manufacturing) and opens
up tremendous possibilities for life sciences and health care
innovation.
More than 1,700 customer and partner organizations access
the world’s largest, cloud-based platform of solutions for
clinical development, commercial, and real-world data.
On average, 40 percent of drugs approved by the US Food
and Drug Administration (FDA) during 2017 - 2019 were
powered by MEDIDATA’s technology. Globally, all of the
top 20 pharmaceutical companies, ranked by revenue, use
MEDIDATA technology.
The 3DEXPERIENCE platform allows any business to become
social, extending from structured program and organization to
social and open communities. The platform connects people,
ideas, data and solutions into a social innovation approach.
ENOVIA – Plan your Definition of Success
Innovation means global teams collaborating with clarity,
confidence and consistency. ENOVIA, powered by the
3DEXPERIENCE platform, enables to plan and track the
definition of success for your customer. With a broad
portfolio of technical and business applications, ENOVIA
enables stakeholders across the enterprise to contribute to
sustainable innovation.
these opportunities.
Intelligent Business Modeling and Planning allows to create
a virtual twin of the enterprise to more effectively identify
market opportunities and plan products and services to
capitalize on
Intelligent business
models deliver information in context, assisting the user in
making more effective plans aligned with business strategy
and corporate standards. Intelligent Product Configurations
delivers capabilities to develop transformational innovations
through multi-discipline collaboration, real-time operational
assessments and business intelligence.
Centric PLM – Plan your Collection’s Success
Centric PLM innovations drive digital transformation for the
most prestigious companies in fashion, retail, luxury, footwear,
outdoor and consumer goods. Centric’s flagship Product
Lifecycle Management (PLM) solution, Centric 8, includes
15 mobile apps and delivers enterprise-class merchandise
planning, product development, sourcing, business planning,
quality and collection management functionality tailored for
constantly moving consumer industries. Centric SMB, tailored
for emerging brands, packages innovative technology with
key industry learnings. Centric Visual Innovation Platform
(Centric VIP) is a touch-screen based family of Boards that
transforms group decision making and automates execution
to truly collapse time to market and distance to market trend
while optimizing collections.
3DEXCITE – Engineer the Excitement
3DEXCITE drives marketing transformation by game-changing
software solutions based on the 3DEXPERIENCE platform. We
call this transformation Marketing in the Age of Experience.
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DASSAULT SYSTÈMES ANNUAL REPORT 20201 } Industry process experience correspond to the business
process used by a team in the context of the solution: let’s
take the example of Aerospace Composite Engineering in
Engineered to Fly: this industry process experience aims at
helping to design, optimize and produce composites parts
with process-oriented applications;
} Roles correspond to the work of one individual in the context
of the industry process - for example Composites Braiding
& Forming Engineer in the context of Aerospace Composite
Engineering correspond to the job of an engineer.
3DS industry portfolio is forward looking. It is carefully crafted
by industry segment based on “what my industry values the
most” – its most important challenges. 3DS portfolio aims
at helping to answer to these challenges and ensure 3DS
customers that they become innovation and sustainability
front-runners.
Each Industry Solution and Industry Process Experiences has
a set of Key Value Indicators to explain the value to customers
and allow them to monitor it – these key value indicators can
be as broad as acceleration of innovation lifecycle, operational
efficiencies, reduction of time loss, reduction of CO2 emissions
or increase of revenues.
While crafting this portfolio, a specific attention is taken to
ensure that 3DS industry portfolio also helps their customers
become even more sustainable, by limiting footprint and
increasing handprint – for example: limiting physical test and
increase virtual tests; optimizing factory operations; simulating
the impact of a product or a process on the environment, etc.
Such a structuration of portfolio allows companies to embark
on significant digital transformation while being clear on
the impact and desired outcomes for the organizations, but
also the jobs and the skills of their teams. Both C-level and
operational teams can understand and monitor at their own
level the results of the transformation project.
Each industry solution & industry process experience also
encompass Dassault Systèmes’ knowledge and the know-
how in the eleven industries we serve, which allow our
customers to be quickly up to speed and mind the gap with
the competition.
By December 31, 2020, 3DS has a total of 88 Industry Solution
Experiences, 521 Industry Process Experiences and 437 roles.
1 Presentation of the Company
Business Activities
In the experience economy, the product alone is no longer
enough to guarantee success. Customer expectations for
personalization at all stages of the selection, buying and
ownership process. Marketers are transforming how they
think, operate and collaborate with their ecosystems to
dramatically improve customer experience and reduce time to
market. In parallel, the rise of the consumer is providing huge
opportunities for business to make the voice of the consumers
a source of innovation. In this context, 3DEXCITE provides
major assets. First, to reduce to zero the time required to reach
the customer by an industrialized automated mass personal
content pipeline. Second, to leverage all semantic and context
from the data integrated in the virtual twin of the product and
thus provide product facing intelligence that is always up to
date, consistent and impactful. Third, to quickly assemble and
orchestrate value networks across disparate organizations and
drive breakthrough innovation.
1.4.2.4
3DEXPERIENCE WORKS
In 2019, Dassault Systèmes
introduced 3DEXPERIENCE
WORKS, a new family of specialized business applications
on the 3DEXPERIENCE platform for small and medium- sized
companies that want to expand their business. Small and
midsized firms worldwide need digital solutions to grow
but have long been challenged to find ones that are right
for their size. By
introducing 3DEXPERIENCE WORKS,
Dassault Systèmes brings the platform benefits to them.
3DEXPERIENCE WORKS extends the ease of use and simplicity
that have been hallmarks of SOLIDWORKS applications to a
new category of solutions composed of fine-tuned and
simplified applications. 3DEXPERIENCE WORKS uniquely
combines social collaboration with design, simulation,
manufacturing and manufacturing ERP capabilities in a
single virtual collaborative environment to help growing
businesses become more inventive, efficient and responsive.
The 3DEXPERIENCE WORKS family includes SOLIDWORKS,
DELMIAWORKS, ENOVIAWORKS and SIMULIAWORKS.
1.4.2.5
Industry Solution Experiences
3DS teams engage with their customers based on a portfolio of
Industry Solution Experiences and Industry Process Experiences
that are meaningful combination of roles developed by brands.
3DS portfolio is structured as followed:
} Industry Solution Experiences answer the challenges of an
industry: for example Engineered to Fly in aerospace and
defense industry allows aerospace & defense suppliers to
accelerate production and go-to-market lifecycles from bid
to delivery while improving margins;
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1.4.2.6 How we engage with customers
Our customers range from startups, small and mid-sized
companies to the largest companies in the world and include
educational
institutions and government departments.
To engage with all customers in a seamless experience,
Dassault Systèmes builds on the 3DEXPERIENCE platform.
Together with our partners, we have developed four ways to
engage with our customers and provide them with the right
value at the right time:
} Customer Solution Experiences: for companies that are
under transformation and are looking for the best outcome;
} Customer Process Experiences: for organizations and
departments that seek the highest operational performance;
} Customer Role Experiences: for users who want to reach
excellence and need to be provided knowledge and know-
how to perform their job;
} Customer Online Experience: for users who expect an end-
to-end full online engagement, based on Cloud fundamental
roles. This continuous relationship with users helps growing
businesses become more inventive, efficient and responsive.
1.4.2.7
Estimated Addressable Market Size,
Market Position and Competitors
We have sized our current software Total Addressable Market
(TAM) at approximately $41 billion based upon end of year
2019 third-party data. Our total addressable market sizing
uses third party estimates of software domains which we
analyze and compare to our software capabilities to assess
whether such markets are part of what we can address
currently. The third party estimates we use do not take into
account internally developed software by companies but only
commercially sold software.
We are one of the world’s leading providers in the 3D Product
Lifecycle Management (PLM) market, comprising 3D software
for design, simulation, digital manufacturing, product data
management and collaboration. Based upon external and
internal analysis, we are also one of the world’s leading 3D
design and engineering simulation software providers with
our CATIA, SOLIDWORKS and SIMULIA brands. Through
3DEXPERIENCE, we simulate the user experience of which we
have a larger definition as that of our competitors’ as we go
beyond the simulation of the individual physics or multi- physics
capabilities. Based upon third-party information, we also believe
we are a global leader in the Life Sciences industry.
We operate in a highly-competitive marketplace. As we
continue to broaden our addressable market, by expanding
our current product portfolio, diversifying our client base,
and developing new applications and markets, we face an
increasing level of competition, from new competitors ranging
from technology start-ups to the largest technology and
industrial companies in the world.
from multiple
We evaluate our competitive position
perspectives, assessing our industry solution experiences and
how well they address the key needs of the industries and
the segments within industries that we are targeting, the
profile of the customers, and the needs and requirements of
users serving certain functions that we categorize internally
by brand.
Competition includes long-standing competitors in the PLM
market (as defined above) including Siemens, Autodesk and
PTC; simulation vendors including ANSYS, Altair Engineering,
MSC Software (owned by Hexagon), with respect to our
structural, fluid, electromagnetic and multi-physics simulation
software. With respect to our collaborative enterprise business
processes and industrial operations software offer, we also
compete with Oracle and SAP.
Following the acquisition of Medidata, and combined with
our other brands, Life Sciences is now our second largest
industry. At present, this is a highly fragmented market with
the three largest players including ourselves, representing
less than 30% of our defined addressable market. There
is a wide range of competitors across the key business
areas, including, among others, in research and discovery
(Schrödinger and Benchling),
in preclinical development
(Labware and Thermo Fisher Scientific), in Clinical Testing
(Oracle and Veeva), in Manufacturing (SAP, SAS and Tibco) and
in commercialization (Veeva, and Model N).
Among other actors (mostly software developers) that
occasionally compete directly or indirectly with us include
Adobe, ARAS, Aveva Group (owned by Schneider Electric),
Bentley Systems, Epicor, Infor, Intergraph (owned by Hexagon),
JDA Software, Microsoft, Nemetschek, Palantir Technologies,
Plex, Salesforce.com, and other software companies in the
mining sector or offering information intelligence, social
enterprise innovation, collaboration software capabilities or
digital marketing.
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1.4.3 Material Contracts
Other than contracts entered into by the Company in the
ordinary course of business, the Dassault Systèmes’ material
contracts are principally the distribution agreements with its
value-added retailers and system integrators, as described in
paragraph 1.4.2.6 “How we engage with customers”, and the
strategic partnership contracts described in paragraph 1.5
“Research and development” (see in particular paragraph 1.5.1
“Overview”).
In connection with the acquisition of Medidata, Dassault
Systèmes SE also received a financing commitment in the
form of a revolving line of credit of €750 million for a period
of 5 years from October 28, 2019. In May 2020, Dassault
Systèmes SE extended its maturity for an additional year,
bringing the maturity date of this credit facility to October 28,
2025. As of December 31, 2020, the line of credit was not
drawn down.
Business contracts
See paragraph 3.1.4 “Capital Resources” and Note 20 to the
consolidated financial statements.
The Boeing Corporation
In 2017, The Boeing Corporation and Dassault Systèmes
entered into a new, extended strategic partnership agreement
pursuant to which Boeing will expand its deployment of
Dassault Systèmes’ software across its commercial aviation,
space and defense programs to include Dassault Systèmes’
3DEXPERIENCE platform.
Boeing is aiming at modernizing its systems to maximize
economic benefit to the company and its shareholders.
By improving product quality, reducing production costs and
developing new innovative products, more value will be
delivered to Boeing’s customers.
Boeing will deploy the 3DEXPERIENCE platform worldwide
for the end-to-end product development and production of all
its new and existing commercial aviation, space and defense
programs. After an extensive and profound evaluation process,
Dassault Systèmes was selected as the only technological
partner for the entire scope of Boeing’s digitalization of
end-to-end processes: product lifecycle management (PLM),
all related authoring tools and manufacturing operations
management.
Financing
Bond
In September 2019, Dassault Systèmes SE
its
four- tranche fixed rate bond for a total of €3.65 billion.
This issuance was part of the financing of the acquisition of
Medidata completed in October 2019. See paragraph 3.1.4
“Capital Resources” and Note 20 to the consolidated financial
statements.
issued
Term loans and Line of credit
To finance the balance of the acquisition price of Medidata,
Dassault Systèmes SE subscribed two loans on October 28, 2019
with maturities on October 28, 2024 for respective amounts of
€500 million and $530 million. On October 28, 2020, Dassault
Systèmes SE proceeded to early repayments of these loans in
the amount of €200 million and $230 million respectively.
Leases
Dassault Systèmes signed long-term leases (for twelve 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, Dassault
Systèmes SE entered into a new lease for its headquarters
facilities for a non-cancelable initial term of 10 years as from
the delivery date of an additional building of approximately
13,000 square meters which took place in the fourth quarter
of 2016. Close to that site, Dassault Systèmes SE also leases
since October 2010 approximately 11,000 square meters in a
building located in Meudon- La- Forêt. In September 2016, the
3DS Boston Campus lease was extended for 25 months. The
initial lease contract provided for a period of 12 years and will
therefore end on June 30, 2026.
In December 2019, Dassault Systèmes SE signed a new lease
contract for a fixed term of 10 years from the delivery of an
additional building of approximately 28,000 square meters of
office space within the 3DS Paris Campus, which shall take
place during the second quarter of 2023. The minimum future
lease payments over the lease term amount to approximately
€81.1 million. In this context, lease contracts of existing
buildings have been renegotiated, notably to extend their term
from 2026 to 2032.
Medidata signed in October and December 2018 two new
lease contracts for additional office space scheduled to be
delivered during 2021. The minimum future lease payments
amount to approximately $66.4 million.
On February 14, 2020, Dassault Systèmes acquired the
leasehold rights, for a period of 75 years, for two buildings
located near the Dassault Systèmes offices in Pune, India
(the “3DS Pune Campus”), for an amount equivalent to
€42.8 million, as part of the expansion plan for this campus.
The first phase of this extension of the 3DS Pune Campus is
scheduled to be delivered in 2021.
See paragraph 1.9.2.1 “Liquidity Risk” and Notes 19 and 25
to the consolidated financial statements.
30
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
Research and development
1
1.5 Research and development
1.5.1 Overview
Principal areas of investment in R&D are related to the
3DEXPERIENCE business platform foundations and services.
Moreover, the Company’s R&D effort mainly aims at providing
major breakthrough on user experiences and on the expansion
of the reach of its portfolio with immersive, mobile and native
cloud solutions.
As of December 31, 2020, the Group’s R&D teams included
8,093 personnel, compared to 7,517 at year-end 2019,
representing approximately 41% of the total headcount.
The Group increased its total R&D headcount by 7.7%
in 2020, after a 26.4%
in 2019, reflecting
principally new recruitments and growth in R&D resources
through acquisitions, notably Medidata.
increase
The Company has R&D facilities in the countries where its clients
and high-talent employees are located: in Europe (mainly
France, Germany, the United Kingdom, the Netherlands,
Poland, and Lithuania), the Americas (mainly United States)
and Asia-Pacific (mainly India, Malaysia and Australia).
R&D expenses totaled €935.4 million for 2020, compared
to €737.9 million for 2019, increasing 26.8%. Dassault
Systèmes benefited from government grants and other
governmental programs supporting R&D of €33.4 million in
2020 and €28.3 million in 2019. These government grants
principally include research and development tax credits
received in France.
The Company conducts its R&D in close cooperation with
customers and users 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 these industries, customers and users.
1.5.2 Cloud and Services
We have established long-standing, scientific and technical
collaborations with key partners in order to maximize the
benefits from available technology and increase the value
for shared customers. Our research and technology alliances
are established with three objectives: to cover end-to-end
solutions with holistic offerings; to participate to the future
structure of industries; and to integrate the most advanced
features of these technologies into our solutions. Further,
Dassault Systèmes
in several hundred
is a participant
public- private projects (for example under the aegis of
the FDA, prestigious universities such as Harvard or MIT,
and world leading institutes such INRIA and INSERM),
collaborates with renowned scientists (including Nobel Prize
winners) and is engaged in technology partnerships across the
eleven industries (and industry sub-segments) it serves.
We have software development partners working in each
domain of our software solutions. Our global affiliate program
enables developers to create and market their own applications
fully integrated with and complementary to our software
solutions.
Dassault Systèmes is deeply committed to creating quality
solutions that allow its customers to meet the critical business
requirements of the
in which they operate.
This commitment to quality is evidenced by its well-established
Quality Management System certified ISO9001:2015 –
the latest version of the standard focusing on operational
excellence and performance.
industries
provides
cloud-based
platform
The 3DEXPERIENCE
technologies and services to enable secured and controlled
online collaborative environments to share and innovate on
any computer. This technology is unique, optimized for big
data and available for remote usage for a wide variety of
industry uses.
Since 2010, our cloud subsidiary Outscale SAS (3DS OUTSCALE)
has been providing companies and public organizations with
reliable, secure and customized IaaS-type Cloud Computing
services, deployed on trusted industrial infrastructures. The 3DS
OUTSCALE’s multi-local cloud provides a complete governance
in terms of security and digital sovereignty. Compatible with
market standards, this cloud allows 3DS OUTSCALE clients
to deploy their applications with a genuine mastering of the
performance.
On December 4, 2019, 3DS OUTSCALE announced that it
had obtained from the ANSSI (French National Agency for
the Security of Information Systems) the SecNumCloud
qualification of its entire “Public Sector Cloud” offering, aimed
at public and para-public organizations and Vital Importance
31
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Research and development
Operators (OIV): a premiere for a Cloud infrastructure services
provider. Obtaining this Security Visa demonstrates the
highest level of commitment and compliance with security
regulations.
privacy in the Cloud) and Health Data Hosting (by ASIP Santé),
3DS OUTSCALE is the Cloud of hyper-confidence and has
been awarded the LUCIE ISO26000 label for its sustainable,
responsible and inclusive actions..
3DS OUTSCALE is fully certified to the highest standards
ISO27001:2013 (certification relating to the information
security management system), ISO27017 (specific to security
in the Cloud), ISO27018 (specific to the protection of data
Finally, 3DS OUTSCALE acts for strategic digital sovereignty in
Europe as a founding member of Gaia-X, the European Cloud
services federation project.
1.5.3
Intellectual Property
Dassault Systèmes protects
its technology by applying
a 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 without transfer of ownership.
The contracts contain various provisions protecting the
Company’s IP rights over its technology, as well as related
confidentiality rights.
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 Dassault Systèmes’ 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 Dassault Systèmes’ 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.
Dassault Systèmes 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, Dassault Systèmes’ policy is to
register trademarks for its principal products and services
in the countries where it does business. Protection through
international
the trademark
trademark, European Community trademarks and/or national
registrations.
is a combination of
law
In order to protect its technology and key product capabilities,
Dassault Systèmes generally files patent applications in
countries where many of its main customers and competitors
are located. At year-end 2020, Dassault Systèmes’ portfolio
comprised around 700 protected inventions, including 44
new inventions in 2020. Patents have been granted in one or
more countries for more than 70% of these inventions, and
patents for the others are pending. When a patent protection
is deemed unsuitable, certain inventions are kept secret, with
the proof of creation being saved. Dassault Systèmes also
has a cross-license policy for patents with major players in
its industry.
See paragraph 1.9.1 “Risks Related to the Dassault Systèmes’
Business”, and particularly paragraph 1.9.1.3 “Protection of
Dassault Systèmes’ Intellectual Property Rights and Assets”
for the difficulties in ensuring adequate protection for Dassault
Systèmes’ own intellectual property, and paragraph 1.9.1.13
“Infringement of Third-Party Intellectual Property Rights and
of Third-Party Technology’s Licenses” for risks concerning the
alleged unauthorized use of third-party’s intellectual property.
1.5.4
Investments
1.5.4.1 Overview
Dassault Systèmes is focused on three strategic sectors of
the economy: (i) Manufacturing Industries, where it has
had a long-standing leadership position; (ii) Life Sciences
& Healthcare; and (iii) Infrastructure & Cities. Critical to its
success has been its ability to define and penetrate new
markets, underpinned by a clear and strong commitment to
technological and business innovation.
32
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
Research and development
1
investments, both through expenditures
Our
internally
in research and development and through acquisitions,
are closely aligned with our strategic roadmap and are the
principal driver of our product innovations and enhancements.
Our research and development expenses totaled €935.4 million
and €737.9 million, for 2020 and 2019, respectively. We
continue to evaluate external investments, complementing
and extending the business value we bring to industries, clients
and users we address. In that regard, acquisitions, net of cash
acquired, and non-controlling interests totaled €89.5 million
in 2020 and €5,211.7 million in 2019.
Reflecting our Purpose and Human Industry Experiences
strategy we are growing our addressable market along multiple
axes: (i) broadening our offer to cover the key disciplines
of clients, from upstream consumer insights to design,
engineering, simulation and manufacturing, to business
planning and operations and point of sales and end- consumer
experiences; (ii) expanding our market coverage of the three
sectors of the global economy we address, and (iii) extending
the power of the platform as a system of operations with our
Marketplace and other initiatives.
For further information, see paragraphs 1.2 “Profile of
Dassault Systèmes”, 1.4.1.1 “Our Strategy: Human Industry
Experiences” and 1.4.1.2 “Strategic operational elements”.
1.5.4.2 Acquisitions in 2019 and 2020
Our principal acquisitions (including majority ownership
investments) completed over the
last two years were
undertaken in the following areas: (i) Life Sciences & Healthcare,
with the acquisition of Medidata Solutions, Inc., a leader of the
digital transformation of the Life Sciences industry for clinical
development, commercial, and real- world data intelligence;
(ii) Manufacturing ERP for small to mid- sized companies,
with the acquisition of IQMS, extending the market coverage
of our DELMIA brand; (iii) cloud and data science strategy,
with the acquisition of NuoDB that develops the most
advanced distributed elastic database for cloud environments;
and (iv) data science, with the acquisition of France-based
PROXEM, a specialist in AI-powered (artificial intelligence-
powered) semantic processing software and services that
transform text data into actionable content and insights.
} Clinical Software Leader in Life Sciences: On October 28,
2019, Dassault Systèmes completed the acquisition of
Medidata Solutions, Inc., opening up a new world of Virtual
Twin Experiences for Healthcare. The 3DEXPERIENCE
platform combines modeling, simulation, data science,
artificial intelligence, and collaboration in the virtual world to
achieve sustainable innovation in Life Sciences. Connecting
the 3DEXPERIENCE platform with Medidata’s Clinical
Trial platform will connect the dots between research,
development, manufacturing, clinical trials and commercial
deployment throughout the entire healthcare ecosystem
and positions Dassault Systèmes to be a leading partner
to the digital transformation of Life Sciences in the age of
personalized medicine and patient-centric experience. More
than 50% of drugs and medical devices are designed with
Medidata’s technology and more than 50% of new clinical
trials are supported by Medidata’s solutions. All of the top
20 Biopharmaceutical and MedTech companies and all top
10 CROs are among Medidata customers.
} Integrated Manufacturing ERP Solution: On January 3, 2019,
we completed the acquisition of IQMS, a California- based
manufacturing ERP software company, with a view to
extend the 3DEXPERIENCE platform to small and midsized
manufacturing companies seeking to digitally transform
their business operations. IQMS’ software – on premise
EnterpriseIQ and software as a service WebIQ – delivers
an all- in-one solution to mid-market manufacturers for
managing engineering, manufacturing and business
ecosystems by digitally connecting order processing,
scheduling, production and shipping processes in real time.
IQMS’ solutions are used by customers based primarily in the
United States with manufacturing facilities in 20 countries,
producing for the automotive, industrial equipment, medical
device, consumer goods, and consumer packaged goods
industries.
} Advanced 3DEXPERIENCE platform cloud and data
science strategy: On December 10, 2020 we completed the
acquisition of NuoDB. Founded in 2010 and headquartered
in Cambridge, Massachusetts, NuoDB provides a cloud- native
distributed SQL database that capitalizes on the competitive
advantages of the cloud, with on demand scalability,
continuous availability and
transactional consistency,
and is built for mission critical applications. We began our
investment and partnership with NuoDB in 2013.
} Enhanced Collaborative Data Science: On June 9, 2020
we completed the acquisition of PROXEM, a specialist in
artificial intelligence-based semantic processing software
and services, and provider of consumer experience analysis
solutions. With this acquisition, Dassault Systèmes extends
information intelligence on the 3DEXPERIENCE platform to
semantics with natural language processing technologies.
Customers can automate the interpretation of unstructured
text data to become more innovative, agile and sustainable.
PROXEM customers include Air France, Air Liquide and Total
among others.
33
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Company Organization
Our principal acquisitions with an individual purchase price greater than €100 million over the last three years include:
Acquisition
Medidata Solutions, Inc.
IQMS
Centric Software (majority ownership acquired in 2018)
Year
2019
2019
2018/2020
Purchase Price
€5.1 billion
($5.8 billion)
€379 million
€228 million
1.6 Company Organization
1.6.1 Dassault Systèmes SE’s Position within the Company
Dassault Systèmes SE, Dassault Systèmes’ parent company,
fulfills several roles: first, it is one of the Company’s largest
operating entities and one of its principal R&D centers,
responsible for the development of a number of the Company’s
software solutions integrated in the 3DEXPERIENCE platform.
Dassault Systèmes SE is also the holding company that owns
directly or indirectly all the companies that make up the
Company. Dassault Systèmes SE plays a centralizing role,
defining the Company’s overall strategy and the means for
its deployment, as well as the marketing and sales policy and
the three engagement models (described in paragraph 1.4.2.6
“How we engage with customers”). The parent company
generally manages cash for subsidiaries whose currency is the
euro, and provides support to the Company 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 SE receives dividends paid by
its
subsidiaries. It receives royalties related to the IP it holds and
separately charges centralized services to the subsidiaries
benefiting from support services and cost pooling.
34
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
Company Organization
1
1.6.2 Principal Subsidiaries of the Company
As at December 31, 2020, the Company included Dassault
Systèmes SE and 98 operational subsidiaries, as compared
to 100 operational subsidiaries as of December 31, 2019.
The decrease was due principally to the effort of the Company
The chart below sets forth Dassault Systèmes’ main subsidiaries:
to simplify the organization of its legal entities throughout the
world, partly offset by the entities acquired in 2020.
Dassault Systèmes SE
Dassault Systemes Deutschland GmbH
(Germany)
Dassault Systemes Americas Corp.
(United States)
%
0
0
1
100%
Medidata Solutions, Inc.
(United States)
Dassault Systemes UK Ltd
(United Kingdom)
Dassault Systemes SolidWorks
Corporation (United States)
Dassault Systemes K.K.
(Japan)
100%
Dassault Systemes Korea Corp.
(South Korea)
Dassault Systemes (Shanghai)
Information Technology Co., Ltd
(China)
Europe
Americas
Asia
Direct and indirect equity interest
See also Note 28 to the consolidated financial statements and the table of subsidiaries and shareholdings under Note 24 to the
parent company financial statements.
35
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Financial Summary: five-year historical information
1.7 Financial Summary: five-year historical
information
Sustaining Growth over the Long-term
Dassault Systèmes’ performance historically relies on a
financial model with a strong focus on recurring software
revenue, which represented over 80% of the total software
revenue during 2020.
financial data in the table below have 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 2019 and 2020
can be found in Chapter 3, “Financial Review and Prospects”.
Five-year Financial Summary
We have provided below summary income statement and
balance sheet information for the last five years. The selected
Income statements and dividends
(in millions of euros, except percentages and per share data)
Total revenue
Software revenue
Operating income
As a percentage of total revenue
Net income attributable to equity holders of the
Company
Diluted net income per share
Dividend per share
Dividend per share growth
2020
€4,452.2
4,012.6
669.7
15.0%
491.0
€1.86
€0.56(1)
(20.0%)
Year ended December 31,
2019(3)
€4,018.2
3,539.4
812.8
20.2%
615.3
€2.34
€0.70
7.7%
2018(2)(3)
€3,477.4
3,081.8
768.2
22.1%
569.4
€2.18
€0.65
12.1%
2017(2)(3)
€3,228.0
2,869.3
729.0
22.6%
519.4
€2.01
€0.58
9.4%
2016(2)(3)
€3,055.6
2,694.7
672.0
22.0%
447.2
€1.74
€0.53
12.8%
(1) To be proposed for approval at the General Meeting of Shareholders scheduled for May 26, 2021.
(2) The Group adopted IFRS 15 effective January 1, 2018 using the modified retrospective transition method (also called the cumulative effect method). Under this method, the
transition effect is accounted for within the consolidated equity at the date of initial application, i.e. January 1, 2018, without any adjustment to the prior year comparative
information.
(3) The Group adopted IFRS 16 for the fiscal year beginning January 1, 2019 using the simplified retrospective approach. Under this method, the transition effect is accounted for
within the consolidated equity at the date of initial application, January 1, 2019, without any adjustment to the prior year comparative information. See Note 2 to the consolidated
financial statements.
Supplemental non-IFRS financial information
Readers are cautioned that the supplemental non-IFRS
financial information presented below 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”.
36
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
Financial Summary: five-year historical information
1
(in millions of euros, except percentages and per share data)
Total revenue
Software revenue
Operating income
As a percentage of total revenue
Net income attributable to equity holders of the
Company
Diluted net income per share
Year ended December 31,
2020
2019(2)
€4,464.8
€4,055.6
4,024.0
1,349.8
30.2%
994.7
€3.77
3,573.6
1,297.4
32.0%
959.6
€3.65
2018(1)(2)
€3,491.1
3,093.9
1,112.5
31.9%
812.5
€3.12
2017(1)(2)
€3,242.0
2,883.2
1,037.1
32.0%
692.9
€2.68
2016(1)(2)
€3,065.6
2,704.3
957.7
31.2%
640.3
€2.49
(1) The Group adopted IFRS 15 effective January 1, 2018 using the modified retrospective transition method, without any adjustment to the prior year comparative information.
(2) The Group adopted IFRS 16 for the fiscal year beginning January 1, 2019 using the simplified retrospective approach. Under this method, the transition effect is accounted for
within the consolidated equity at the date of initial application, January 1, 2019, without any adjustment to the prior year comparative information. See Note 2 to the consolidated
financial statements.
Balance sheets and net cash provided by operating activities
(in millions of euros)
ASSETS
Year ended December 31,
2020
2019(2)
2018(1)(2)
2017(1)(2)
2016(1)(2)
Cash, cash equivalents and short-term investments
€2,148.9
€1,945.6
€2,809.9
€2,460.7
€2,492.8
Trade accounts receivable, net
Goodwill and intangible assets, net
Other assets
TOTAL ASSETS
LIABILITIES AND EQUITY
Contract liabilities
Borrowings
Other liabilities
Parent shareholders’ equity
TOTAL LIABILITIES AND EQUITY
1,229.1
7,937.3
1,648.9
1,319.2
8,917.0
1,690.8
12,964.2
13,872.6
1,169.1
4,190.4
2,543.4
5,061.3
1,093.5
4,601.2
2,969.2
5,208.7
1,044.1
3,262.3
857.7
7,974.0
907.5
1,000.0
1,504.6
4,561.9
895.9
2,990.1
683.1
7,029.8
876.4
1,000.0
1,159.2
3,994.2
820.4
2,926.5
703.4
6,943.1
853.1
1,000.0
1,229.8
3,860.2
€12,964.2
€13,872.6
€7,974.0
€7,029.8
€6,943.1
(1) The Group adopted IFRS 15 effective January 1, 2018 using the modified retrospective transition method, without any adjustment to the prior year comparative information.
(2) The Group adopted IFRS 16 for the fiscal year beginning January 1, 2019 using the simplified retrospective approach. Under this method, the transition effect is accounted for
within the consolidated equity at the date of initial application, January 1, 2019, without any adjustment to the prior year comparative information. See Note 2 to the consolidated
financial statements.
(in millions of euros)
Net cash provided by operating activities
2020
2019
€1,241.3
€1,186.1
2018
€898.6
2017
€745.0
2016
€621.7
Year ended December 31,
37
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Extra-financial performance
1.8 Extra-financial performance
The Environmental, Social and Governance strategy is defined in the Sustainability Compass of the Company and will guide our
actions for sustainability over the coming years. It includes the 2025 objectives summarized in the following table:
Environment
Carbon intensity - in tCO2-eq per FTE(2)
Social
% of women People Managers
% of employees trained on ethics and compliance (3)
% of pride and satisfaction(4)
Governance
2020
2019
2018
Workforce
in-scope(1)
Values
Workforce
in-scope(1)
Values
Workforce
in-scope(1)
Values
Objective
2025
18,713
4.1
15,846
6.7
13,292
8.1
5
19,789
16,746
19,143
20.7%
98.2%
82.5%
19,361
16,684
16,251
18.8%
96.9%
78.0%
16,055
15,618
15,701
17.0%
89.3%
76.9%
30%
95%
85%
% of women on the Executive team
19,789
38.5%
19,361
22.2%
16,055
22.2%
40%
(1) The scope refers to total headcount excluding companies or countries as detailed in paragraph “2.8 Reporting methodology”.
(2) Carbon intensity includes scope 1, 2 and 3 greenhouse gas emissions excluding emissions related to the use of our solutions by our customers as well as emissions related to
purchased goods and services, in relation to the average headcount in scope.
(3) Percentage of employees that completed mandatory training on Business Ethics, Personal Data Protection and Anti-Corruption.
(4) Pride and satisfaction rate of employees measured by an internal annual survey.
Dassault Systèmes is committed to reduce the carbon intensity
per employee by 38% by end 2025 compared to base year
2018, for which the intensity was 8.1 tCO2-eq, corresponding
to a 5 tCO2-eq target for 2025..
In 2020, our carbon intensity per employee decreased by 39%
compared to 2019.
Due to the COVID-19 pandemic, we have indeed:
} significantly limited business travel, leading to a 57%
reduction in travel-related emissions and nearly 40%
reduction of emissions related to company cars;
} temporarily closed our sites during lock-down periods or
adjusted on-site presence in compliance with sanitary
recommendations, leading to a reduction of more than 62%
of employee commuting-related emissions and nearly 27%
of emissions related to electricity consumption.
The Sustainability Compass of the Company also includes the
following objectives:
} define a science-based target for greenhouse gas emissions:
on December 2, 2020, we announced our commitment to
Science Based Target initiative, confirming our intention to
set an ambitious series of targets to reduce our greenhouse
gas emissions, in order to achieve the objectives of the Paris
Agreement;
} two thirds of new licenses having a positive impact on
sustainable development: our solutions portfolio already
supports our customers to be more efficient in the use of
resources and to reduce their environmental footprint.
Today, we place this value at the center of our offers;
} engage 5,000 stakeholders: we are rolling out various
programs to mobilize our ecosystem,
including our
employees, our suppliers, our customers, students as well as
non-profits around sustainable development issues, because
we believe that our success hinges on a collective effort.
38
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
Risk Factors
1
1.9 Risk Factors
The risk factors are set out hereafter in two main categories:
risks related to the Dassault Systèmes’ business (1.9.1) and
financial and market risks (1.9.2). These are the main risks
identified as being material, specific to the Company and
likely to have a negative impact on its business and financial
position as of the date on which this Annual Report (Document
d’enregistrement universel) was filed with the AMF.
is the result of regular
The presentation of the risks
analysis as part of the risk management policy contained
in paragraph 5.2.3 “Internal Control and Risk Management
Procedures”. In each category, the risk factors are classified
in descending order of importance taking into account the
probability of seeing them materialize and the estimated
scale of their negative impact, and after taking into account
the alleviation measures put in place by Dassault Systèmes.
However, other risks not mentioned or not yet identified can
affect Dassault Systèmes, its financial position, its reputation,
its outlook or the share price of Dassault Systèmes.
1.9.1 Risks Related to the Dassault Systèmes’ Business
Once alleviation measures taken into consideration, Dassault
Systèmes considers risks 1 to 9 to be of great importance, risks
10 to 13 of medium importance and risks 14 to 15 of low
importance.
1.9.1.1 Uncertain Global Economic
Environment
In light of the uncertainties regarding economic, business,
social, health, climate and geopolitical conditions at the global
level, Dassault Systèmes’ revenue, net earnings and cash flows
may grow more slowly, whether on an annual or quarterly
basis, mainly due to the following factors:
} the deployment of Dassault Systèmes’ 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 environment in which the
customers operate. Uncertain global geopolitical, economic
and health conditions and the lack of visibility or the lack of
financial resources may cause some customers, e.g. within
automotive, aerospace or natural resources industries,
to reduce, postpone or terminate their investments, or to
reduce or not renew ongoing paid maintenance for their
installed base, which impact larger customers’ revenue with
their respective sub-contractors;
} the sales cycle of the Dassault Systèmes’ products –
already relatively long due to the strategic nature of such
investments for customers – could further lengthen;
} the political, economic and monetary situation in certain
geographic regions where Dassault Systèmes operates
could become more volatile and, for example, result in
stricter export compliance rules or the modification of
customs tariff;
} phenomena such as climate change or health conditions
may also impact the economic situation on a global scale
or in some geographic areas where Dassault Systèmes
operates. Specifically, as of issuance date of the document,
it remains difficult to predict the impact, length and scope of
future damages originating from the COVID-19 pandemic,
including health conditions of Dassault Systèmes’
employees; and
} continued pressure or volatility on raw materials and
energy prices could also slow down Dassault Systèmes’
diversification efforts in new industries.
to
take
Dassault Systèmes makes every effort
into
consideration this uncertain macroeconomic outlook. Dassault
Systèmes’ business results, however, may not develop as
anticipated. Furthermore, due to factors affecting sales of
Dassault Systèmes’ products and services, 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 economic context (as notably caused by the COVID-19
pandemic health crisis) may also adversely impact the financial
situation or financing capabilities of the Dassault Systèmes’
existing and potential customers, commercial and technology
partners, some of whom may be forced to temporarily close
sites or cease operations due to cash flow and profitability
issues. Dassault Systèmes’ ability to collect outstanding
receivables may be affected. In addition, the economic
environment could generate increased price pressure, as
customers seek lower prices from various competitors, which
could negatively impact Dassault Systèmes revenue, financial
performance and market position.
39
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Risk Factors
1.9.1.2
Security of Systems and Facilities
As Dassault Systèmes’ R&D is totally computer-based, its
effectiveness is dependent on the proper functioning of
complex software and integrated hardware systems. It is
not possible to guarantee the uninterrupted operation and
complete security of these systems. Computer viruses,
whether deliberately or unintentionally introduced, could
cause damage, loss or delays. Moreover, in a context of
increased cyber-attacks and the emergence of cyber-terrorism,
Dassault Systèmes may be subject to computer attacks or
intrusions that could interfere with the proper functioning
of its systems and cause substantial delays or damage to its
activities, not to mention data disclosures. Such attacks or
intrusions, potentially targeted, could also cause damage to,
losses or disclosures of customer data, hosted by Dassault
Systèmes or some of its service providers as part of its cloud
offerings, or interruptions to the online service, for which
it may be held liable. The increasing use of mobile devices
(cellular telephones, tablets and laptops) linked to certain of
Dassault Systèmes information systems tends to increase the
risk of unauthorized access.
Likewise, some transactions require the use of off-the-shelves
interconnection systems, for example with most of the
banking partners of Dassault Systèmes. Dassault Systèmes
requires from these services and partners a high level of
security and control so as to protect the messages’ integrity
and prevent attacks and intrusions in Dassault Systèmes’
systems. However, these controls do not eliminate all risks of
indirect impact from cyber-attacks affecting our partners.
In addition, because Dassault Systèmes’ 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 Dassault Systèmes’ sites, by
natural causes or by terrorist attacks or local violence, could
materially reduce its ability to continue its normal business
operations.
1.9.1.3
Protection of Dassault Systèmes’
Intellectual Property Rights and
Assets
Dassault Systèmes’ success is heavily dependent upon its
proprietary software technology. Dassault Systèmes relies on
a combination of copyright, patent, trademark, trade secret
law and contractual restrictions to protect its technology.
These legal protections may not provide a full coverage of the
Company’s products and can be breached by third parties.
In addition, some countries do not have effective protection
against infringements of copyright, trademarks, trade secrets
or patents, or they may be limited in comparison to what exists
in Western Europe or the United States. If, despite Dassault
Systèmes’ strategies for protecting its IP, certain third parties
are able to develop similar technology, or to successfully
challenge the Company’ IP rights, a reduction in the Company’s
software revenue may ensue. Furthermore, although Dassault
Systèmes enters into confidentiality agreements with its
employees, distributors, customers 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 misuse of
its technology, the unauthorized disclosure of confidential
information or prevent its utilization by third parties.
In addition, like most of its competitors, Dassault Systèmes
faces a significant level of piracy of its leading products,
both by individuals and companies operating worldwide,
which could potentially affect Dassault Systèmes’ growth in
specific markets.
Litigation may be necessary to enforce Dassault Systèmes’ 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 the Company resources and could
significantly harm Dassault Systèmes’ operating income.
Dassault Systèmes may not prevail in all such litigation and its
IP rights may be found invalid or unenforceable.
1.9.1.4
Complex Regulatory and Compliance
Environment – Legal Proceedings
Establishing or strengthening Dassault Systèmes’ presence in
countries where it previously had not been located or had been
present only marginally until now, and increasing the breadth
of its business and the diversity of its customers and users
(particularly individuals), have added to the complexity of the
regulatory environment in which Dassault Systèmes operates.
These regulations, which are complex and fast moving, apply
to many different fields, such as general business practices,
competitive practices, anti-corruption, processing of personal
data, including health data, consumer protection, financial
reporting standards, securities law and corporate governance,
internal controls, employment laws, local and international
tax regulations and export compliance for high-tech products.
introduction of newly created or stricter
Besides, the
regulations in countries where Dassault Systèmes operates
or will operate could materially increase compliance costs.
Enforcement of digital economy or climate change-specific
taxes could also negatively impact the net result of Dassault
Systèmes.
In order to conduct its business in a wholly ethical manner, the
Company requires all of its employees, subsidiaries, resellers
and intermediaries to comply with all applicable laws and
regulations. The failure or suspected failure to comply with
these regulations may result in inquiries or investigations by
the relevant authorities, or even fines and sanctions, as well
40
ANNUAL REPORT 2020 DASSAULT SYSTÈMES as an increase in Dassault Systèmes’ litigation risk or negative
impact on its business operations, revenue or reputation.
A number of these adverse consequences could occur even if
it is ultimately determined that there has been no failure to
comply. Dassault Systèmes broadly relies on a large number of
distributors and resellers to support the licensing of its software
products and the deployment of its solutions (as described in
paragraph 1.9.1.8 “Relationships with Extended Enterprise
Partners”). Although Dassault Systèmes has implemented a
program to ensure that these third parties fully comply with
all applicable rules and regulations, especially the highest
ethical standards, export control regulations or competition
law, Dassault Systèmes’ business and reputation could be
negatively impacted in the event such third parties were to
breach local or international laws.
risk of
inquiries,
Dassault Systèmes’
litigation and
administrative proceedings also increases as it expands its
activities (including product distribution and online services)
or economic sectors exposure (in particular in health and
infrastructure businesses), enhances its position and visibility
on the market and develops new approaches to its business.
Litigation can be lengthy and expensive and disrupt the
management of the Company operations. Its outcome is
uncertain and may differ from management expectations,
which could result in an adverse impact on its financial position
and operating income, or even the conduct of its business.
1.9.1.5 Deployment Delays, Product Errors
and Defects
software
sophisticated
solutions becomes
Deploying
into
increasingly complex. Such projects need to take
account Dassault Systèmes’ customer’s infrastructure and
diverse software environment. Appropriate project and
change management controls are also critical to the success
of deploying complex software solutions that affect a large
number of users across multiple organizations and processes.
If Dassault Systèmes is not able to carefully plan and execute
these projects in a timely manner, it might need to commit
additional resources, which could adversely
its
operating income.
impact
Sophisticated software can contain errors, defects or other
performance problems when first introduced or when updates
or new versions are released. Dassault Systèmes may not be
able to correct such errors or defects in a timely manner and
may need to expend additional resources.
Such difficulties may also lead to the loss of customers, or even
in the case of the largest customers the potentially significant
loss of revenue with their subcontractors. Technical problems,
or the loss of a customer with a particularly important global
reputation, could also damage Dassault Systèmes own business
reputation and cause the loss of new business opportunities.
Presentation of the Company
Risk Factors
1
Were customers to suffer financial or other damage because of
product errors, defects or deployment delays, such customers
could pursue claims against the Company. Any resulting 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 Dassault Systèmes’
marketing efforts.
1.9.1.6 Organizational and Operational
Challenges Arising from the Evolution
of Dassault Systèmes
Dassault Systèmes has continued to expand through
acquisitions and internal development and has substantially
increased its addressable market through launching 3D
EXPERIENCE.
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 Dassault
Systèmes’ strategy to reach a broader market. Dassault
Systèmes must continue to reorganize itself to maintain
efficiency and operational excellence while ensuring customer
retention and the integration of newly acquired companies.
It must also continue to focus on quality of execution while
maintaining innovation.
Dassault Systèmes must also ensure that the profile and skill
sets of its employees are continually updated to reflect the
Company’s development and retain employees notably from
newly acquired companies.
If Dassault Systèmes does not address these
issues
effectively and on a timely basis, Dassault Systèmes product
development, 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 performance.
Moreover, integration of acquisitions remains a challenge, in
particular for Medidata, due to its specific activity and size.
Newly-acquired companies may also carry risks (such as
litigation or events related to pre-acquisition practices
potentially unknown at the date of acquisition and sometimes
identified post-acquisition, e.g. tax or intellectual property
claims).
Acquired companies, including of non-controlling interests,
may also require Dassault Systèmes to recognize amortization
of acquired intangible assets and/or depreciation of goodwill
in case of impairment (see Note 2 to the consolidated financial
statements). When making new acquisitions or investments,
Dassault Systèmes may need to allocate significant financial
resources, make potentially dilutive issuances of equity
securities or incur debt.
41
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Risk Factors
1.9.1.7
Business Model Transformation
and Competition
In the past few years, there have been fewer competitors in
Dassault Systèmes’ historical software markets. As the various
players compete for market share, adoption by competitors
of business models different from Dassault Systèmes’,
in particular through the exclusive promotion of cloud solutions,
could lead to substantial declines in pricing, which could
require Dassault Systèmes to adapt to a substantially different
commercial environment. These competitive pressures on
pricing and the nature of the offer could lead to competitors
winning contracts, negatively impacting Dassault Systèmes’
revenue, financial performance and market position.
At the same time, 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, Dassault Systèmes encounters new competitors.
Because of their size or prior presence in these markets, such
competitors could have financial, human or technological
resources not readily available to Dassault Systèmes.
The development of cloud offers may also lead to new
participants entering the market. Dassault Systèmes’ ability
to expand its competitive position may thus be impaired.
Indeed, Dassault Systèmes is developing and distributing
a cloud offering (Software as a Service - SaaS). It continues
to grow and promote its portfolio of software solutions and
processes available on the cloud. The introduction of such
solutions with the appropriate pricing model and with the
right level of quality could affect the Company’s growth
and future results. The progressive rollout of these services
and their distribution also requires the deployment of new
sales, support and management processes and expertise in
those areas, in particular to support changes of subscription
methods for some customers.
In the event the Company has difficulties setting up the
organization needed to manage its businesses and the new
competitive context,
its revenue, financial performance,
competitive position and reputation could be negatively
impacted.
1.9.1.8 Relationships with Extended
Enterprise Partners
Dassault Systèmes’ 3DEXPERIENCE strategy requires a fully
integrated platform with access to computer-aided design
(“CAD”), simulation, collaboration, manufacturing and data
management products, which are increasingly complex and for
which customer installations represent significant enterprise
projects. Dassault Systèmes has continued to develop an
extended enterprise model and implement its 3DEXPERIENCE
model in partnership with other companies in areas such as:
} computer hardware and technology, to maximize benefits
from available technology;
} product development, to enable software developers to
create and market their own software applications using
Dassault Systèmes’ open product architecture; and
} consulting and professional services, to support and
assist customers as needed to deploy Industry Solution
Experiences on the 3DEXPERIENCE platform.
Dassault Systèmes believes that its partnering strategy allows
it to benefit from complementary resources and skills and
to reduce costs while achieving broader market coverage,
especially in diversification industries or emerging markets.
Dassault Systèmes’ broad partnering strategy nevertheless
creates a degree of dependency on such partners.
In addition to its own sales force, Dassault Systèmes 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 and their ability to invest,
especially in diversification industries, could impact Dassault
Systèmes’ ability to sell and deploy its product and service
offerings.
Lastly, Dassault Systèmes’ ability to establish partner
relationships
the development, distribution and
deployment of its 3DEXPERIENCE platform is an important
element of its strategy.
for
Serious difficulties in Dassault Systèmes’ relationships with
its partners, or an unfavorable change of control of these
partners, may adversely affect Dassault Systèmes’ product
and business development and could cause it to lose the
contribution of the employees or contractors of Dassault
Systèmes’ partners, particularly in the area of R&D. In addition,
any failure by Dassault Systèmes’ partners to deliver products
of quality or according to the expected timing may cause
delays in the delivery of, or deficiencies in, Dassault Systèmes’
own products.
Due to the rapid evolution of the software development and
distribution sectors, it is difficult to ensure the long-term
success of the Company’s relationship with any particular
partner.
1.9.1.9 Retention of Key Profiles
and Executives
Dassault Systèmes’ success depends to a significant extent
upon the continued service of its key managers and highly
qualified employees, in particular in R&D, technical support and
sales management, and on its ability to continue to attract and
42
ANNUAL REPORT 2020 DASSAULT SYSTÈMES motivate qualified employees, keep their skills continuously
up to date and in line with the organizational needs, as well as
retaining employees from newly-acquired companies.
The competition for such employees is high and if Dassault
Systèmes loses the ability to hire and retain key employees
and executives with a diverse and high level of skills in
appropriate domains (such as R&D, strategy, marketing and
sales), it could have a material adverse impact on its business
activities and operating income. In particular, if the Company
fails to hire on a timely basis and retain highly skilled sales
forces, revenue could be negatively impacted. The Company
does not maintain insurance with respect to the loss of key
personnel.
1.9.1.10 Currency Fluctuations
Dassault Systèmes’ operating income can be affected by
changes and high volatility in exchange rates. In particular,
exchange rate fluctuation of the Japanese yen, the U.S.
dollar and to a lesser extent of the British pound, the South
Korean won and the Chinese yuan relative to the euro, can
affect revenue and expenses recorded in Dassault Systèmes’
statement of income upon translation of other currencies into
euro.
incurs expenses
Dassault Systèmes bills its customers in major currencies,
principally euros, U.S. dollars and Japanese yen. Dassault
in different currencies,
Systèmes also
principally euros, U.S. dollars and Japanese yen, depending
on Dassault Systèmes’ employees and suppliers’ location in
different countries. Moreover, Dassault Systèmes 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 Dassault Systèmes currently benefits from a natural
coverage of most of its exposure to the U.S. dollar from an
operating margin perspective, exchange rate fluctuation of
the U.S. dollar relative to the euro may impact its’ revenue
and consequently its operating income, net income and
earnings per share. In addition, Dassault Systèmes’ revenues
denominated in Japanese yen, Korean won and British pound
substantially outweigh its expenditures in these currencies.
As a result, any depreciation in the value of these currencies
– in particular the Japanese yen, and to a lesser degree the
British Pound and South Korean Won – relative to the euro,
would affect the revenue, operating income and margin,
net income and earnings per share.
Dassault Systèmes’ net financial
income can also be
significantly affected by changes in exchange rates between
the time the income is recognized and when 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, net” caption of Dassault
Systèmes’ financial statements.
Presentation of the Company
Risk Factors
1
The main items of financial income subject to fluctuations
linked to exchange rates are:
} the difference between the exchange rate used to record
invoices in foreign currencies and the exchange rate when
Dassault Systèmes receives or makes the payment; and
} the
revaluation of monetary assets and
liabilities
denominated in foreign currencies.
Since market growth rates for Dassault Systèmes’ 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 Dassault
Systèmes’ euro-computed revenue growth rates for the same
periods.
1.9.1.11 Variability in Dassault Systèmes’
Quarterly Operating Income
Dassault Systèmes’ quarterly operating income may vary
significantly in the future, depending on factors such as:
} the timing, the cyclical nature of revenue received due to the
signing of important new customer orders, the completion
of service contracts and customer deployments;
} the timing of any significant acquisition or divestiture;
} fluctuations in foreign currency exchange rates;
} Dassault Systèmes’ 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;
} the number,
significance of product
enhancements or new products that Dassault Systèmes
develops or that are released by its competitors;
timing and
} general conditions in Dassault Systèmes’ software markets
(as a whole or on a regional basis) and the software industry
generally; and
} the growing difficulty in planning and forecasting as new
business models are introduced alongside the traditional
licensing model of the industry.
A substantial portion of Dassault Systèmes’ orders and
shipments typically occur in the last month of each quarter,
and, therefore, if any delay occurs in the timing of significant
orders, Dassault Systèmes may experience quarterly
fluctuations in its operating income. Additionally, as is typical
in the software industry, Dassault Systèmes has historically
experienced its highest licensing activity for the year during
the last quarter of the year, in particular the last month. Delays
in orders and shipments can also affect Dassault Systèmes’
revenue and income.
43
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Risk Factors
The trading price of the Dassault Systèmes’ shares may be
subject to wide fluctuations in response to quarterly variations
in Dassault Systèmes’ operating income and the operating
income of other software application developers in Dassault
Systèmes’ markets.
1.9.1.12 Rapidly Changing and Complex
Technologies
Dassault Systèmes’ software solutions are characterized by the
use of rapidly changing technologies and through upgrades
to existing products or frequent new product introductions.
These solutions must address complex engineering needs in
various areas of product design, simulation and manufacturing
and must also meet sophisticated process requirements
amongst others in the areas of change management, industrial
collaboration and cross-enterprise work.
As a result, Dassault Systèmes’ success is highly dependent
upon its ability to:
} understand its customers’ complex needs in different
business sectors;
} support customers with their efforts to improve key product
lifecycle processes;
} enhance its existing solutions by developing more advanced
technologies;
} anticipate and take timely advantage of quickly evolving
technologies and standards; and
} introduce new solutions in a cost-competitive and timely
manner.
Dassault Systèmes 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 technical limitations, for example
in managing data migration or the options for interfacing with
third-party systems used by customers. In addition, if Dassault
Systèmes is not successful in anticipating technological leaps
and developing new solutions and services that address its
customers’ increasingly sophisticated expectations, demand
for its products could decline and Dassault Systèmes’ operating
income and financial condition could be negatively affected.
1.9.1.13
Infringement of Third-Party
Intellectual Property Rights and
of Third-Party Technology Licenses
Third parties, including Dassault Systèmes’ competitors,
may own or obtain copyrights, patents or other proprietary
rights that could restrict Dassault Systèmes’ ability to further
develop, use or sell its own product portfolio, potentially
inherited from acquisitions. 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 Dassault Systèmes to incur
substantial costs to defend itself in any litigation that may be
brought, regardless of its merits. If Dassault Systèmes fails to
prevail in IP litigation, it may be required to:
} 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
} redesign its products, which could involve substantial costs
and require Dassault Systèmes to interrupt product licensing
and product releases and which may not be feasible at all
and may require ongoing development to be put on hold.
In addition, Dassault Systèmes embeds in its products third-
party components selected either by Dassault Systèmes
itself or by companies it has acquired. 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 Dassault Systèmes’ products
generates exposure to the risk that a third party will claim that
these components infringe their IP rights. There is also a risk
that such license(s) might expire or terminate without renewal,
thereby affecting certain Dassault Systèmes 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 operating income.
1.9.1.14 Technology Stock Volatility
Under conditions of increased market uncertainty, the trading
price of Dassault Systèmes SE shares could be volatile. The
market for shares of technology companies has in the past
been more volatile than the stock market overall.
1.9.1.15 Shareholder Base
Groupe Industriel Marcel Dassault SAS (“GIMD”), main Group
shareholder, owned 40.39% of the Dassault Systèmes SE’s
outstanding shares, representing 54.45% of the exercisable
voting rights (53.90% of theoretical rights) as of December 31,
2020. 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 a portion of the
Group’s assets.
44
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Presentation of the Company
Risk Factors
1
1.9.2 Financial and Market Risks
Dassault Systèmes overall risk management policy is based
upon the prudent management of the Company’s market risks,
primarily foreign currency exchange risk and interest rate risk.
Dassault Systèmes 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.
Dassault Systèmes’ 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.
Dassault Systèmes generates positive cash flows from
operations and has financial obligations (e.g., bonds, bank
loans, loan facilities, employee profit-sharing).
After the mitigation measures implemented, the Group
considers risk 1 to be of high importance, risk 2 of medium
importance and risks 3 to 5 of low importance (all five risks
discussed below herein).
1.9.2.1
Liquidity Risk
Dassault Systèmes’ liquidity risk corresponds to the risk of not
being able to meet its monetary needs thanks to its financial
resources. It depends in particular on the level of Dassault
Systèmes exposure to changes in the main market parameters,
which could lead to higher credit costs, or even temporary
limitation of access to external sources of financing.
Dassault Systèmes manages this risk by anticipating its
liquidity needs and ensures its coverage with short and long-
term financial resources.
On August 27, 2019, Standard & Poors Global Ratings assigned
to Dassault Systèmes SE and to its long-term credit a rating of
“A-” with a Stable outlook. See Note 20 to the consolidated
financial statements.
As of December 31, 2020, Dassault Systèmes’ cash, cash
equivalents and short-term investments totaled €2.15 billion.
See Note 12 to the consolidated financial statements.
Dassault Systèmes has analyzed the amounts it will be required
to pay under its contractual commitments as of December 31,
2020 and believes that it will be able to meet such obligations.
The following table summarizes Dassault Systèmes’ principal contractual obligations to make future payments as of
December 31, 2020:
CONTRACTUAL OBLIGATIONS
(in millions of euros)
Operating lease obligations(1)
Loan facilities(2)
Employee profit-sharing
TOTAL
Payments due by period
Total
Less than 1 year
1-3 years
802.1
4,254.8
67.6
5,124.5
103.8
9.6
67.6
181.0
187.2
919.1
-
3-5 years
139.2
1,259.3
-
More than
5 years
371.9
2,066.8
-
1,106.3
1,398.5
2,438.7
(1) Including €704.9 million of undiscounted lease liabilities payments (See Note 19 to the consolidated financial statements) and €97.2 million of future lease commitments (See
Note 25 to the consolidated financial statements)
(2) Including financial interest on bank financing of 300.0 million euros and 300.0 million U.S. dollars, interest on bond stocks as well as interest on the revolving line of 750.0 million
euros (see Note 20 to the consolidated financial statements). The variable portion of future interest flows on borrowings is calculated on the basis of the Euribor 3-month and Libor
USD 3-month spot rate as of December 31, 2020.
1.9.2.2
Foreign Currency Risk
1.9.2.4
Credit or Counterparty Risk
See paragraph 1.9.1.10 “Currency Fluctuations” above and
Note 21 to the consolidated financial statements.
1.9.2.3
Interest Rate Risk
Dassault Systèmes’ interest rate risk would primarily translate
into a reduction of its financial revenue. See Notes 20 and 21
to the consolidated financial statements.
The financial
instruments which could expose Dassault
Systèmes to credit risk include principally 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. Dassault Systèmes uses a rigorous selection
45
DASSAULT SYSTÈMES ANNUAL REPORT 20201 1 Presentation of the Company
Risk Factors
process for its counterparts according to credit quality, based
on several criteria including agency ratings and depending on
the maturity dates of the transactions.
1.9.2.5
Equity Risk
For cash management purposes, Dassault Systèmes 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.
1.9.3
Insurance
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 all the entities of
Dassault Systèmes, 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 Company’s entities are protected by a policy covering
professional and product liability as well as civil liability for
operations for a total insured value of €150 million for 2020.
This policy was renewed for three years in 2019.
Dassault Systèmes has also taken out other insurance policies
covering, in particular, for damage to goods in the Company’s
various locations, equipment and computer 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 and professional
civil liability. In connection with this insurance, the Company
also has coverage for work-related accidents in the United
States (other countries being covered by State programs) 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 of $25 million.
The insurance policies are regularly reviewed and may be
modified to reflect changes in the revenue, the integration of
newly acquired companies, activities and risks of the different
companies within the Company.
Dassault Systèmes has not established captive insurance
coverage.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES 2
SOCIAL, SOCIETAL AND
ENVIRONMENTAL
RESPONSIBILITY
2.1 Sustainability Governance
49
2.6 Business Ethics and Vigilance Plan 67
2.2 Social, societal and environmental
risks
2.3 Social responsibility
2.3.1 Company organization and workforce
2.3.2 Attracting talented individuals
2.3.3 Developing knowledge and know-how
2.3.4 Developing employee engagement
2.3.5 Preserving health and safety
2.3.6 Retaining our talents
2.4 Societal responsibility
2.4.1 Digital responsibility
2.4.2 Facilitating innovation and collective intelligence
2.5 Environmental responsibility
2.5.1 Climate governance
2.5.2 Climate strategy: solutions
2.5.3 Climate strategy: operations
2.5.4 Climate risks management
2.5.5 Measurement system and targets
49
50
50
51
52
53
54
55
56
56
59
61
61
61
63
65
66
2.6.1 Promoting Strong Business Ethics
2.6.2 Striving for Transparent Business Relations
2.6.3 Fiscal transparency and policy
2.6.4 Commitment to Ensure Respect for Human Rights
2.6.5 Maintaining an Appropriate Vigilance Plan
2.7 Environmental, Social and
Governance metrics
2.8 Reporting Methodology
2.8.1 Methodology for social and societal reporting
2.8.2 Methodology for environmental reporting
2.9 Independent verifier’s report
on Consolidated Non- financial
Statement Presented in the
management report
2.10 Statutory Auditors’ Attestation
on the information relating
to the Dassault Systèmes SE’s total
amount paid for sponsorship
67
69
70
71
72
74
77
77
78
80
83
47
DASSAULT SYSTÈMES ANNUAL REPORT 2020CONTENTS We have rolled out a number of initiatives to support our
customers, partners and communities around the world
during the COVID-19 pandemic. Thus, the availability of the
cloud- based 3DEXPERIENCE platform allowed for remote
working to ensure the continuity of sustainable innovation
projects and programs.
Our 3DEXPERIENCE Edu organization collaborates with a global
network of partners to transform the education system, from
primary school to university, to meet business needs. Through
innovative, holistic and interdisciplinary programs based on
our solutions and our technologies, we help to prepare the
talents of the future. In 2020, we deployed various programs
to ensure pedagogical continuity in educational institutions,
such as the “My Virtual Classroom” campaign, as well as for
the benefit of lifelong learning with a new portfolio of learning
experiences, the transformation of our certification offer and
the introduction of 3DEXPERIENCE Edu digital badges.
La Fondation Dassault Systèmes provides support to the
world of education and research by transforming the learning
experience through powerful 3D technologies supporting
education and research methods.
The 3DEXPERIENCE Lab, an innovation laboratory set up
within the Company in 2015, helps develop innovative external
startups. This initiative gives our employees the opportunity
to get involved in new projects, enabling them to share their
knowledge and gain new skills. In 2020, operational support
for startups continued seamlessly and in an inclusive manner
thanks to the 3D EXPERIENCE platform and the opening of
the virtual 3D EXPERIENCE Lab in December 2019.
The 3DEXPERIENCE platform combined with the power
of virtual twins contributed to redefine the manufacturing
industry and also infrastructure and cities, moving from
product to experience. We are now applying to life sciences
and healthcare the knowledge and know-how we acquired
in the domain of things. By fostering sustainable innovation,
we improve quality of life for the people. This means that
we make a larger contribution to progress in society and to
creating a more sustainable world as defined by the United
Nations Sustainable Development Goals.
A recent report produced by Accenture on our virtual twins’
solutions highlighted a potential of 7.5 GtCO2-eq emissions
reduction if these solutions were more widely adopted in 5 key
industries (see paragraph 2.5.2 “Climate strategy: solutions”).
2 Social, societal and environmental responsibility
to
imagine
universes
Dassault Systèmes provides business and people with
3DEXPERIENCE
sustainable
innovations capable of harmonizing product, nature and
life. The 3DEXPERIENCE platform has become the catalyst
of sustainable innovation through the capacity to leverage
and impart knowledge and know-how for the benefit of
the workforce of the future. Virtual worlds are spaces of
representation and experimentation of the
imaginary.
They connect the imaginary, the useful and the sustainable.
Thus, they allow innovators, professionals, consumers and
citizens to consider value creation in a holistic approach of
impact for the planet.
Therefore, sustainability issues are core to Dassault Systèmes’
strategy and are managed at the highest level of corporate
governance. Dassault Systèmes is committed, alongside other
private, public and non-profit actors, to promote and build a
low carbon economy together. In 2020, Dassault Systèmes
joined global initiatives to promote sustainable development,
such as the Science Based Target initiative (SBTi), the Task Force
on Climate-Related Financial Disclosures (TCFD) supporters’
network, Global Enabling Sustainability Initiative (GeSI),
Business for Social Responsibility (BSR) as well as the Ellen
MacArthur Foundation network. We are ranked in the Corporate
Knights 2021 Top 100 Most Sustainable Corporations in the
World as well as Clean200, the annual list of publicly traded
companies offering sustainable energy transition solutions.
In 2020, our MSCI rating for the Environmental, Social and
Governance (ESG) index is “AA” and we are ranked thirty-
third in Forbes The World’s Best Employer, a ranking of 750
companies in 45 countries. In 1st quarter 2021, we will join
the European Green Digital Coalition and the United Nations
Global Compact
Our employees are the Company’s most precious asset.
They are at the heart of our mission and
long-term
development. Sharing a common culture and the same values
is of capital importance as they underpin the employees’ daily
interactions within the Company, with its customers and
more broadly in its ecosystem. They are Dassault Systèmes’
distinctive feature, making everyone eager to join us, to
work together and grow. In March 2020, Dassault Systèmes
made a commitment to preserve the jobs of its employees
by guaranteeing a stable workforce for the year 2020.
We have also maintained our annual compensation policy and
implemented measures to protect the health and safety of our
employees.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES
Social, societal and environmental responsibility
Social, societal and environmental risks
2
2.1 Sustainability Governance
Sustainability issues are core to Dassault Systèmes’ strategy and are managed at the highest level of corporate governance:
} within the Board of Directors, Dassault Systèmes appointed
an independent director – Ms. Toshiko Mori, an architect
committed to sustainable future thinking – as lead director
for sustainable development matters and its presentation
to the Board of Directors. The Board of Directors has also
included environmental, social and governance (ESG)
criteria in the performance criteria triggering payment
of the variable compensation of M. Bernard Charlès,
Vice- Chairman of the Board and Chief Executive Officer
(see paragraph 5.1.4 “Summary of the Compensation and
Benefits due to Corporate Officers (mandataires sociaux)”);
} at Operational Executive Committee
level, Florence
Verzelen, Executive Vice President, Industry, Marketing
& Sustainability,
the Dassault
Systèmes sustainable development roadmap in terms of
environmental footprint and product development strategy
to help customers become more sustainable (handprint);
responsible
for
is
} the Sustainable Development Committee brings together,
every month, all the key functions of the Company to discuss
action plans and the progress made on cross-functional
matters. This committee is co-chaired by Florence Verzelen
and Thibault de Tersant, General Secretary of Dassault
Systèmes. The Chief Sustainability Officer of Dassault
Systèmes is secretary of the committee.
} from an operational perspective,
sustainable
development team coordinates a community of contacts
across business functions, geographies, brands and
industries on a quarterly basis to ensure in particular the
implementation of sustainable development action plans
and the reporting of our environmental footprint.
the
2.2 Social, societal and environmental risks
In 2018, a working group was set up to identify the social,
societal and environmental challenges associated with
our business model (see Chapter 1 “Presentation of the
Company”). Further to this analysis stage, 18 potential risks
were submitted to over 35 experts, directors and department
managers, in order to assess the probability of occurrence,
severity and preventable nature.
thus
Based on the results of this assessment, the main contributors,
meeting in Committee, drew up a mapping of social, societal
and environmental challenges,
identifying nine
categories of risks specific to the Company and that could have
a strategic, operational, legal, financial, reputation impact or
affect our ability to innovate. After taking into account the
policies implemented, none of these categories are considered
high or significant risk. These categories cover the sustainable
development topics included in the materiality map defined
by the Sustainability Accounting Standards Board (SASB) for
the Software and IT Services industry:
} Human Capital including our ability to promote diversity
and equal treatment, to attract the talented individuals on
the global employment market, to support the development
of knowledge and know-how, to develop employee
engagement, to preserve their health and safety, and to
retain our talents (see paragraph 2.3 “Social responsibility”);
} Social
capital
including personal data protection
(see paragraph 2.4.1 “Digital responsibility”);
} Environment including the management and reduction of
our greenhouse gas emissions, the management of our
energy consumption, the treatment and recycling of our
waste electrical and electronic equipment, including our
actions in favor of circular economy. (see paragraph 2.5
“Environmental responsibility”);
} Leadership and Governance including our ability to:
} promote strong Business Ethics. The impacts of our
business with regard to Human Rights were assessed as
part of the Vigilance Plan. The impacts of our business
with regards to the fight against corruption are subject
to a specific mapping dedicated to the risk of corruption,
updated periodically. Including the fight against tax
evasion, they do not represent main risks and are covered
under our Code of Business Conduct (see paragraph 2.6
“Business Ethics and Vigilance Plan”);
} manage the impact of digital technology on people and
society in collaboration with players from civil, economic
and scientific society;
} support breakthrough innovation product and service
projects initiated by startups communities of innovators
and research laboratories (see paragraph 2.4.2 “Facilitating
open innovation and collective intelligence”).
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DASSAULT SYSTÈMES ANNUAL REPORT 20202 2 Social, societal and environmental responsibility
Social responsibility
These categories are the basis of our non-financial performance
statement and are documented in view of associated policies
and procedures, upcoming measures and the definition of key
performance indicators.
for animal wellbeing, responsible, balanced and sustainable
food choices, and collective agreements and their impact on
the Company’s economic performance do not represent main
risks and do not require development in this chapter.
Given the nature of our activities, we consider that the areas
relating to food waste, the fight against food poverty, respect
2.3 Social responsibility
Our social responsibility approach is entrusted to the Human
Resources and Information Systems department, including
the Real Estate and Facilities Management department.
The definition and implementation of related policies is
based on a global network of employees composed of experts
and operational staff, at global and local level. Projects and
indicators are monitored and managed, through dashboards
in the 3DEXPERIENCE platform, facilitating collaboration
between all contributors, decision-making and implementation
of relevant action plans.
2.3.1 Company organization and workforce
Dassault Systèmes is organized around large business areas:
R&D; Sales, Marketing and Services; Company’s Global
Administration; on our main markets within three large
geographical regions.
As of December 31, 2020,
the workforce was
19,789 employees, covering subsidiaries in which Dassault
Systèmes has more than a 50% shareholding, representing an
increase of 2.2% compared to December 31, 2019. Reflecting
our international dimension, 39% of our employees are
located in Europe, 30% are located in the Americas and 31%
are located in Asia, representing 42 different countries and
employees originating from 133 different countries.
promotion, assignment, and other employment decisions
are based on qualifications, talent, achievements and
other business motives. We are committed to providing a
work environment free from discrimination, harassment,
or intimidation of any nature.
At December 31, 2020, the Board of Directors was composed
of five women and five men, excluding the employees’
representatives, and the Executive team had 13 members,
including five women. The proportion of women in the
Executive team is 38.5% in 2020, significantly increasing
compared to 22% in 2019 (see section 5.1.2 “Executives of
Dassault Systèmes”).
In 2020, 2,196 new employees joined Dassault Systèmes,
including 91.4% through recruitment and 8.6% through
newly acquired companies. This growth in the number of
employees brings our breakdown by activity to:
Nearly 19% of employees have management responsibilities,
of which 21% are women. A community of 3,771 women
and men manage our human capital throughout their career
development within Dassault Systèmes.
} 41% in R&D;
} 46% in Sales, Marketing and Services;
} 13% in Company’s Global Administration.
In line with our aim to be recognized as an exemplary employer
that contributes to employability, 99% of our employees are
under permanent contracts and are recruited locally, thus
contributing to the economic development of each country in
which we operate.
Our corporate culture is based on mutual respect, fairness,
and valuing the diversity of our workforce. Hiring, training,
735 women joined Dassault Systèmes in 2020, representing
33.5% of new hires. The proportion of women in the
Company is 26.8%, in constant progression notably through
the attention we pay from recruitment phase. Under the Index
de l’égalité Femmes-Hommes (Gender Equality Index) in 2020
for 2019, Dassault Systèmes SE obtained an overall score of
95 points out of 100.
In 2020, we are ranked thirty-third in Forbes The World’s Best
Employer, a ranking of 750 companies in 45 countries and we
were awarded the Top Employeur de France 2021 (2021 Top
French Employer) label.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Social, societal and environmental responsibility
Social responsibility
2
2.3.2 Attracting talented individuals
Since the very beginning, we have demonstrated our unique
ability in the field of 3DEXPERIENCE universes, enabling
our clients to accelerate their transformation and imagine
innovative solutions. Our sustainable growth is based in
individuals
particular on our ability to attract talented
motivated by our ambition, thus reinforcing the expertise and
complementarity of our employees.
is recognized through different rankings or labels. In 2020,
we are accredited with the World and Europe Choose My
Company - Happy Trainees and Choose My Company -
Happy Candidates labels, which has also been awarded to
nine countries. We have also maintained our ranking in the
Universum France ranking of engineering school students in
eleventh place across all business sectors.
On the global employment market, competition for high-tech
skills is increasingly stiff. Our value proposition is founded
on our Purpose, which contributes to sustainability in many
fields, as well as our passion for breakthrough innovations,
in an international and multicultural context. We aim to be
acknowledged as a leading employer who attracts and engages
talent to develop them and ensure sustainable employability
in all its forms.
To achieve our objectives, we implement consistent and
diverse candidates’ sourcing and selection solutions. In 2020,
in the context of the COVID-19 pandemic, we adapted our
recruitment and onboarding process and have continued our
programs and action plans initiated since 2018 under the
most appropriate conditions. In order to promote our career
opportunities worldwide, we continued to capitalize on our
referral program and received 4,644 applications under this
recruitment process.
In order to enable future talents to complement their academic
studies with a work experience in an innovative environment,
we have stepped-up our efforts to foster education by
increasing our global internship and apprenticeship offers by
10.6%. Our aim is to offer them career opportunities by joining
Dassault Systèmes after graduation. To this end, we conducted
227 actions, programs or contributions of different types in
partnership with targeted higher education establishments
and universities, covering 27 countries worldwide.
In 2020:
} we filled a total of 1,729 job offers, of which 95% under
permanent contracts;
} we filled 24.3% of offers through referrals, a rate that we
aim to maintain at around 20% per year by end of 2021;
} we onboarded 84 interns or apprentices on permanent or
fixed-term contracts. This number of new hires represents
a 9.8% conversion rate of the total number of interns and
apprentices, whether they are continuing their studies or
are at the end of their training, down from 2019 due to
the constraints and impacts of the COVID-19 pandemic.
In order to contribute to the employment of younger people,
we have also hired more than 1,000 employees starting
their professional career, 92% of whom have permanent
contracts, representing around 46% of the people who have
joined Dassault Systèmes in 2020.
In 2021, we will continue to work on our priority actions:
} the development of internship pool in our main countries
of operation;
} the development and enhancement of our privileged
relationships with targeted higher-education establishments
and universities;
} the identification of relevant and suitable target positions to
be offered to our interns and apprentices;
Candidate and student experience is central to our recruitment
processes, both face-to-face and remote. Our commitment
} the development of initiatives to promote diversity, in
particular gender diversity within the Company.
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DASSAULT SYSTÈMES ANNUAL REPORT 20202 2 Social, societal and environmental responsibility
Social responsibility
2.3.3 Developing knowledge and know-how
Throughout the major transformations brought by Dassault
Systèmes with 3D, digital mock-up (DMU), 3D product lifecycle
management and now the 3DEXPERIENCE platform, we have
demonstrated our ability to learn and master new technologies
and to assemble and develop skills to innovate. This individual
and collective capacity is at the root of our success and growth.
“Passion to Learn” is one of our values and is part of our DNA.
Our training and certification process is driven by the 3DS
University, which aims to offer development initiatives in line
with our activities. Through the 3DEXPERIENCE University
application, it offers all our employees a portfolio of training
and knowledge acquisition experiences in areas related to our
solutions and business expertise. In general, their effectiveness
is measured through exams.
In 2020, we rolled out 52 new programs and delivered 13,525
certifications. A total of 75 certification programs for the main
roles filled by our employees are available. They enable to
certify 71 roles of our 2020 referential representing 79.2%
of the workforce at December 31, 2020. In addition, we offer
80 programs linked to our brands and 60 programs linked to
industry segments.
This process is supplemented with a portfolio of over 9,000
training courses, enabling employees to undertake specific
skills training, with the support of their manager.
In order to strengthen our approach to career development
and the Company’s agility, we have developed a standardized
skills
referential covering knowledge and know-how.
The defined skills are progressively deployed within the
roles that make up our model and will enable us to reinforce
certification programs aimed at specialization, expertise and
social on- the- job learning.
Our approach to human capital development is also based on
our mobility policy, which aims to provide our employees with
opportunities to increase their expertise and know-how on our
solutions and the industry segments we address.
We have a broad approach of mobility, starting by enriching
the employee’s current role by enlarging the scope of
responsibilities or adding a project. It then extends to
role change in the same role family and can go as far as
professional retraining. It thus allows each employee to
develop professionally in order to achieve personal fulfillment
and maximize motivation and sense of pride.
To support this commitment, we make sure that our
employees and managers are provided with the required
resources. The My Journey application enables each employee
to define a career development project, whether it concerns
an evolution in the current role or a role change within the
same or a different organization. All employees can also
connect to our My Job Opportunities application, available
on the 3DEXPERIENCE platform, giving real-time access to
available jobs, enabling them to apply online and follow the
progress of their applications.
As of December 31, 2020:
} 87.6% of employees have received training;
} 355,053 hours of training were provided, including actions
relating to the knowledge and the values of the Company as
well as managerial skills (see paragraph 2.3.4 “Developing
employee engagement”), corresponding to an average of
23.5 hours per employee trained during the year, compared
to an average of 20.6 hours per employee in 2019;
} 36.9% of available job offers requiring at least three years of
professional experience were filled by internal applications.
We aim to maintain this rate at around 30% of job offers by
end of 2021.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Social, societal and environmental responsibility
Social responsibility
2
2.3.4 Developing employee engagement
importance for the
Employee engagement
fulfillment of our ambition. Our employees embody Dassault
Systèmes values and culture and are the key players in the
implementation of our strategy.
is of major
Since 2010, an internal satisfaction survey has been open to
all our employees worldwide. This survey enables employees
to give their opinions on five dimensions including the
meaning of their work, the quality of the management, the
competitiveness of the work environment, the collective
quality of life and the pride in working for Dassault Systèmes.
This survey makes it possible to identify for each team and
each country watch points and the required priority actions
presented to employees and shared within the 3DS People
community.
Knowledge of the Company and sharing our values
As part of the certification process (see paragraph 2.3.3
“Developing knowledge and know-how”), 3DS University
strives to
impart to each employee the fundamental
knowledge concerning our purpose, our values, our brands and
the adoption of the 3DEXPERIENCE platform, the acquisition
of which is validated by successfully passing two exams.
For employees joining Dassault Systèmes, this certification
program includes participation to two onboarding sessions,
named DAY1 and DAY90.
We are also committed to creating quality solutions that enable
our clients to meet the critical requirements of the industry
segments in which they operate. Our commitment to quality
is confirmed by our ISO9001 certified quality management
system. A specific training module is dedicated to this process.
As of December 31, 2020, the proportion of certified
employees is 72.4%, increasing by 12.5 percentage points
compared to 2019.
In line with the Company’s commitment concerning business
ethics and corporate social responsibility (see paragraph 2.6
“Business Ethics and Vigilance Plan”), our onboarding program
includes mandatory trainings relating to ethics, compliance,
personal data protection, the fight against corruption and the
safety of people and property.
Managerial skills
Managers play a key role in the commitment, motivation
and development of our human capital through the collective
management of the teams, as well as through the individual
support they provide to employees throughout their
careers within Dassault Systèmes, along with the Human
Resources teams.
Our People Manager certification program provides managers
with a common base of managerial skills and allows them to
develop their leadership skills. The aim of this training is to
acquire in-depth knowledge of our human capital development
processes and communication methods, thus allowing them
to bond and motivate their teams around common goals and
steer individual and collective performance.
Managerial performance is monitored annually allowing us
to identify specific support needs. Development plans are
implemented locally and are subject to quarterly monitoring
to assess their effectiveness. The concerned managers benefit
from different types of actions, in particular mentoring by
volunteer managers thus promoting peer-to-peer sharing of
managerial know-how and experience.
As of December 31, 2020, the proportion of certified People
Managers is 75.8%, increasing by 10.4 percentage points
compared to 2019.
Work environment
Each site reflects the Company’s spirit and identity. It hosts
and contributes to the well-being of our employees, potential
talents, our clients and our partners. The physical environment
is thus core to our real estate strategy. The Real Estate and
Facilities Management department has defined guidelines for
the design, layout and identity of our workspaces. It ensures
that these guidelines are complied with and implemented by
local teams in order to ensure the global consistency of our
sites and abide by our commitment of providing comfortable
and collaborative workspaces, based on two focus areas:
} the provision of on-sites services to our employees;
} the maintenance, renovation and works to extend our
premises.
In 2020, all of our actions focused on the implementation of
health rules and protocols related to the COVID-19 pandemic.
Our sites were managed according to a shared nomenclature,
with five pre-established phases implemented according to
local recommendations, ranging from site closure to a physical
presence of between less than 25% and 100%. In order to
adapt to the exceptional sanitary situation, we used the
3DEXPERIENCE platform taking into consideration three main
dimensions:
} the sanitary and capacity dimension to protect our
employees in constant compliance with the rules of physical
distancing;
} the human dimension to engage our employees while
taking into account their personal organization constraints;
} the technological dimension to visualize
in 3D the
workspaces and necessary adjustments.
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DASSAULT SYSTÈMES ANNUAL REPORT 20202 2 Social, societal and environmental responsibility
Social responsibility
In order to maintain the relationship with our employees,
we rolled out experience and satisfaction surveys to:
} understand remote working conditions, where applicable,
and provide solutions to any difficulties encountered;
} anticipate personal, family, health and logistical constraints,
such as travel conditions, to prepare for a gradual return to
the site;
} assess the operating conditions on site with a view to
making the necessary adjustments and meeting the needs
expressed.
Based on the information collected, the Company’s managers
were able to adapt and manage the individual on-site presence
schedules with each member of the team in accordance with
health measures and personal situations.
Each year, our internal survey measures employee satisfaction
with their work environment. In 2020, the work environment
satisfaction rate reached 80%, up by seven percentage points
compared to 2019. This progression can be attributed to
the quality of measures implemented, as evidenced by the
satisfaction rate of nearly 83% on the question relating to the
Company’s ability to adapt and the effectiveness of the actions
taken to support employees during the COVID-19 pandemic.
In order to increase employee engagement, our objectives for
the end of 2021 are the following:
} about 75% of employees benefiting from certification
related to our purpose and values;
} about 80% of People Managers certified, by continuing our
management development program;
} about 75% satisfaction concerning the work environment.
2.3.5 Preserving health and safety
Our commitments, which are included in our Code of Business
Conduct and in our Corporate Social Responsibility principles,
aim to provide all employees with working conditions that
guarantee their health and safety, in compliance with the
applicable laws and regulations. We are working on formalizing
and
implementing measures and procedures to ensure
the protection of people in the context of our operational
activities. In 2020, our actions were dedicated to managing
the COVID-19 pandemic and its consequences on the health,
working and living conditions of employees.
Personal safety
Four major policies lay down the scope of application, the
measures and the procedures, as well as the responsibilities
of all contributors, in particular the Security and Safety
department, the Real Estate and Facilities Management
department, the Human Resources department and the Legal
department. These policies cover our employees in their
business activities, on our sites and during their business
travels. They also cover our stakeholders, in particular our
clients, our partners and our service providers during their
presence on our sites or at events organized on behalf of
Dassault Systèmes. This portfolio of policies stems from the
strengthening of procedures since 2015.
A specific governance for the management of the health
situation and
its consequences has been defined and
implemented, notably a Committee including members of the
Operational Executive Committee that meets twice a week,
a crisis management Committee which meets on a daily basis,
as well as specific multidisciplinary teams covering all the
countries where we operate to monitor local situations and
implement the necessary measures.
General recommendations have been drawn up as part of a
health and safety protocol, defining a global management
system to be adapted on a local basis, in order to ensure
compliance with local regulations. A five-phase procedure,
including standard guidelines, was drawn up, to manage the
on-site presence capacity plan, compliance with health rules
and the continuity of the Company’s business. This system
has made it possible to harmonize the procurement and
implementation of personal health protection equipment.
The international business travel policy has been adapted
and a specific authorization and supervision process has
been deployed with a view to limiting them solely to critical
situations. Events organized on behalf of Dassault Systèmes
have been suspended, or adapted to be held through
videoconference.
In order to assess the situation of our sites and enable
decision-making, management indicators have been defined
on the basis of the public health data communicated as well as
the local medical monitoring systems put in place and made
available to key contributors in dashboards integrated into
the 3DEXPERIENCE platform. These operations were carried
out in compliance with the personal data protection and other
applicable national legislation.
A communication system through the communities within the
3DEXPERIENCE platform was deployed to targeted audiences
to ensure that information could be shared at all times in order
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to adjust the measures implemented. This system has also
made it possible to regularly inform all employees of changes
in the health situation as well as the protocols and measures
to be followed, clearly explained thanks to the indicators
implemented within the Company.
employees were also able to benefit from on-site or remote
medical assistance.
In the United States and Canada,
employees have benefited from various programs on health,
stress management, financial counseling and family support
such as the provision of online courses for children.
In accordance with local regulations and where operational
conditions allow, we have deployed additional support
measures at certain sites. For example, in France, employees
can get RT-PCR virology tests at the 3DS Paris Campus, and
have their seasonal flu shot at all our sites in France, as part
of a campaign organized on a voluntary basis, in addition to
public health recommendations.
Employee benefit plans
In 2020, we rolled out various measures for employees, both
through our social protection partners and through Company
initiatives, with the aim of supporting them in managing
working conditions and the impact on their personal lives.
For example, in France, employees were able to benefit from
the À vos côtés program, provided by our supplementary
pension organization, offering personal services, psychological
support and financial aid solutions. On the 3DS Paris Campus,
In India, we have opened a dedicated helpdesk, which can be
accessed via a hotline available during and outside working
hours, to provide assistance to employees and their families.
Thus, the services offered have enabled employees and their
families to benefit from remote consultation services, referrals
to testing centers or public health services, and assistance
with their healthcare coverage and administrative procedures
with local authorities.
We aim to maintain the absenteeism rate below 4%. In 2020,
the absenteeism rate was 2.3% and the number of occupational
accidents was 19.
In light of the uncertain health outlook, we will continue to
roll out the initiative in 2021 and to maintain the programs
already in place. As soon as possible and in accordance with
the rules that will be defined in each country, we will make
sure to propose a vaccination campaign for employees on a
voluntary basis.
2.3.6 Retaining our talents
The achievement of our ambition and our
long-term
development depends in particular on our ability to retain
our key talents. The experience and value proposition that we
offer to our employees is based on all of our policies presented
in this chapter as well as our capacity to value performance
and employee recognition.
Our compensation policy aims to ensure that each employee’s
compensation is in line with high-tech market practices in each
of the countries in which we operate, and varies according to
individual performance. In 2020, we maintained the annual
compensation policy under the usual conditions and schedule.
With regard to employee savings schemes in France, the
amounts from profit-sharing and incentive schemes were
paid out to eligible employees in accordance with the defined
timetable and were not deferred, despite this possibility having
been made available by the French ordonnance n°2020-322
of March 25, 2020.
In March 2020, Dassault Systèmes made a commitment to
preserve the jobs of its employees by guaranteeing a stable
workforce for the year 2020. Thus, on December 31, 2020,
the workforce was up 1.2% compared to the workforce as of
March 31, 2020.
At the heart of our relationship with our employees, we
believe that our purpose, which contributes to sustainability
in numerous fields, also gives meaning to the professional
lives of our employees. It is also for this reason that they
decide to join Dassault Systèmes, and we develop different
initiatives to express and develop pride in their achievements
and contributions.
While compliance with the health constraints related to COVID-19
has led us to cancel many initiatives, we have maintained the
3DS INNOVATION Forwards. Indeed, as innovation is an integral
part of our DNA, each year we reward the most innovative
projects carried out by Dassault Systèmes teams around the
world, thus encouraging collaboration and understanding of
the Company’s strategy. The projects submitted are selected
through a vote by employees and by a jury, composed of
members of the Executive team. The 2020 edition of the 3DS
INNOVATION Forwards registered 315 candidate projects,
representing 2,411 employees, and rewarded 89 projects,
involving 523 people.
In 2020, the average length of service was 8.2 years and the
average rate of employees leaving at their own initiative was
5.3%, compared to 7.6% in 2019. We aim to maintain this rate
below 10% over the next three years.
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2.4 Societal responsibility
As a global leader in 3D and engineering technology, we strive to transform the world of education and prepare the workforce of
the future. In addition, in the age of digital economy, and in a context of ever stiffer regulations, the protection of personal data
is a major issue for our clients and partners.
2.4.1 Digital responsibility
Preparing the “Workforce of the Future”
As part of the Industry, Marketing and Sustainability
department, our 3DEXPERIENCE Edu (formerly Workforce
of the Future) organization is responsible for defining and
implementing policies and initiatives to prepare the workforce
of tomorrow. To this end, it relies on an international team
of employees in charge of developing our global network
of partners, particularly academic partners, and deploying
appropriate programs for initial and lifelong learning, whose
activities and indicators are monitored on a quarterly basis.
Our organization 3DEXPERIENCE Edu aims to help students,
educational institutions, companies and individuals acquire
the skills sought by the industrial sector to build and design
sustainable innovations. Every year, our team provides unique
learning experiences to millions of learners:
} lifelong learning, thus promoting employability;
} increasing the attractiveness of engineering and science to
young people;
} educational innovation in teaching and the development of
future skills.
In 2020, the COVID-19 pandemic profoundly impacted
the field of education, with blended learning (face-to- face
and online) becoming the new standard
in education.
The 3DEXPERIENCE Edu team has developed various
programs to ensure educational continuity in schools. With
the My Virtual Classroom campaign, we provided the cloud-
based 3DEXPERIENCE platform as a comprehensive solution
allowing teachers to carry out their educational activities and
interact with their students remotely, and we gave students
access to our online 3D design solutions.
We have rolled out the 3DEXPERIENCE platform in many
institutions around the world to encourage experiential
learning as well as multidisciplinary projects and programs.
Many education industry customers were able to ensure
educational continuity and conduct their projects remotely
with no interruption, while maintaining student engagement
through experiential learning. As most engineering schools
and university laboratories were closed during the lockdown
periods, our customers were able to continue their practical
work activities thanks to our virtual laboratory offer. For
individuals, we provided many online learning, training and
certification experiences to help them develop their skills in a
context of remote work.
introduced a new portfolio of
learning
In 2020, we
experiences for businesses, thereby enabling their employees
to effectively develop their 3DEXPERIENCE skills and discover
Dassault Systèmes’ new solutions. These experiences offer
step- by- step learning paths starting with short interactive
lessons before providing learners more in-depth technical
expertise on the applications and carrying out practical work
activities. We have also transformed our certification offer and
introduced digital 3DEXPERIENCE Edu badges so that users
can promote their skills acquisition on social networks.
We have brought to market new learning experiences for
professional transformation with
leading partners such
as: Add-up for additive manufacturing, and the National
Composite Center or INSEAD for digital transformation.
To support the global industrial renaissance, our clients must
support the transformation of their employees’ skills, which
means adjusting the learning content rapidly to changing
business processes and working methods. To meet the
objectives of content relevance and equipment accessibility,
Dassault Systèmes has developed a new collaborative model
for 3DEXPERIENCE Edu Centers. This model is based on
partnerships established with the CampusFab consortium
or the Advanced Manufacturing Research Center from the
University of Sheffield in the United Kingdom. In 2020,
we extended this network by collaborating with Purdue
University, the Illinois Institute of Technology and Long Island
University in the United States, Shiv Nadar University and the
Government Tool Room & Training Center in India.
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We are continuing our collaboration with various governments
in the area of education. In India, our apprenticeship program
with the State of Andra Pradesh continued to develop.
In France, we worked with regional training centers to obtain
the new Campus d’excellence label from the French Campus
des Métiers et des Qualifications (CMQ) program. Dassault
Systèmes’ cooperation with the French State also led to the
opening of the French-South African Competency Center
based at Durban University of Technology and Cape Peninsula
University of Technology in South Africa.
To deepen our knowledge of educational practices and share
our experiences with educators, we remained very active in
a number of scientific associations, including the American
Society for Engineering Education (ASEE), the Société
Européenne pour la Formation des Ingénieurs (SEFI), the
International Federation of Engineering Education Societies
(IFEES), the Global Engineering Deans Council (GEDC), the US
National Academy of Engineering and the and the UNESCO
Center of Problem Based Learning, and also in the initiative of
the World Economic Forum for shaping the future of advanced
manufacturing and production.
Dassault Systèmes also strives to engage younger generations
in science, technology and sustainable innovation to anticipate
and match future skills needs, and enhance employability. To
this end, we organized and supported over 40 competitions
for science and technology students worldwide. Following the
success of our first student competition, aimed at reducing
plastic waste, we launched the second edition to allow them
to submit projects supporting one of the four United Nations
Sustainable Development Goals, namely: renewable energy,
sustainable cities and communities, responsible production
and consumption and aquatic life.
Our 3DEXPERIENCE Edu Hub continued to promote experiential
learning with specific projects dedicated, for example, to the
design of a bridge or an underwater drone, as well as a digital
twin of the breathing system co-developed with the Illinois
Institute of Technology in the United States.
We have been committed to the academic world since 1997. In
2020, we estimate that nearly 10.2 million learners are using
or have used one or more of our Company’s technologies in
initial or lifelong training, compared to 8.6 million learners in
2019.
La Fondation Dassault Systèmes
La Fondation Dassault Systèmes places virtual universes at the
service of a more sustainable society in order to contribute to
transformation in the following fields:
} education, to support the development of new innovative
learning methods in scientific and technical subjects,
to facilitate and share the creation of 3D educational
content and its dissemination, and thus contribute to the
growth of innovation and sustainable development at all
educational levels;
} research, which is the main provider of solutions for
economic, social and environmental challenges, by enabling
researchers to push back the limits of knowledge;
} heritage, by enabling scientists to find better ways of
protecting it and enhancing it for future generations.
Through three legal entities based in Europe, India and the
United States, La Fondation Dassault Systèmes provides
grants and digital resources and skills in the field of virtual
technology to projects conducted by universities, research
institutes and other general-interest organizations.
In 2020, La Fondation Dassault Systèmes supported
38 projects, including 17 in Europe, 11 in India and 10 in the
United States.
In order to anticipate the social and political impacts of the
in-depth changes taking place in our world, and to meet
our society’s economic and environmental challenges, we
need to invent solutions to make the transition towards a
sustainable society, through the transmission of knowledge,
the acquisition of skills and a spirit of innovation. To this
end, La Fondation Dassault Systèmes has chosen to provide
support to entities including:
} DT Alliance for the creation of Innotech Lab, an innovation
and training center in Cameroon to promote the arrival of
a new generation of Cameroonian engineers who will help
to accelerate the development of digital technologies and
the national economy. Innotech Lab also aims to promote
innovation on the African continent;
} Vigyan Ashram in India, for the modeling of its initiative
for a village that aims to be self-sufficient in energy,
water, food and waste treatment. The objective of this
program is to reduce dependency on the electricity grid by
at least 10% each year. Accordingly, it includes effective
and environmental friendly systems and best practices, in
particular through the reuse of 100% of wastewater for
agriculture and certain sanitary systems;
} Base 11, in the United States, which is dedicated to the
education of low-income students with a high potential, with
special attention to female students from Afro- American
and Hispanic communities. In 2020, Base 11 strengthened
its activities through its skills-based Next Frontier Initiative
targeting industries such as life sciences, aerospace and
advanced technologies. The goal is to enable high school
pupils and students to acquire the required skills to find a
job in a rapidly developing industry and alleviate the current
talent shortages in technology and engineering in the
United States;
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La Fondation Dassault Systèmes has been supporting the
La Main à la Pâte program in France for over four years.
It aims to introduce students, in 46 middle and high school
classes, to the culture of innovation and entrepreneurship. In
2020, in India, La Fondation Dassault Systèmes rolled out this
program to 10 Indian schools, adapting it to the local school
system, thus initiating a twinning program named Made in
3D. It offers Indian and French teenagers the opportunity
to engage in a cultural exchange and collaboration around
technical learning.
In the context of the COVID-19 pandemic, and in order to help
students during the lockdown period in India, La Fondation
Dassault Systèmes launched the Connect Next initiative, with
the aim of strengthening links between the academic world and
industry. During 15 weeks, industrials presented, in a series of
virtual seminars, the upcoming trends and technologies in their
respective areas as well as future skills needs. A virtual platform
enabled the various players to meet at a conference and
discover the top 100 projects of engineering school students.
These students thus benefited from a unique opportunity to
present their work to potential future employers and enhance
their employability through an eight-week remote learning
internship program. 16,000 people took part in the various
events offered as part of this initiative. In France, La Fondation
Dassault Systèmes made a donation towards the purchase of
computers for students of the Fondation Apprentis d’Auteuil
in order to improve the conditions for remote learning.
To recognize the contribution of La Fondation Dassault
Systèmes towards academic transformation and its impact,
the Indo-French Chamber of Commerce and Industry awarded
“Best CSR Project” to our Indian foundation in the category
“Education and Skill Development”. La Fondation Dassault
Systèmes won this award for the third year in a row.
On June 8, 2019, La Fondation Dassault Systèmes announced
the development of the Mission Ocean project aimed at
supporting the preservation of the oceans, which plays a key
role in climate change. This project aims to develop curricula
of scientific and technical culture through various disciplines
involved in the preservation of the oceans, and promote the
acquisition of new skills for future jobs and support research.
This will make it possible to prepare the relevant educational
resources for the next decade, designated by the United
Nations as the “Decade of Ocean Science for sustainable
development”.
In that context, La Fondation Dassault Systèmes launched an
ambitious project aimed at high-school students to support
the development of innovative educational resources focused
on the major challenges linked to the oceans. The pupils
will be able to learn through modeling techniques, digital
simulation and virtual reality experiences and thus anticipate
the future. For this project, La Fondation Dassault Systèmes
is backed by key partners in France, including le Ministère de
l'Education Nationale, the network of educational support and
resource creation Canopé, the ONISEP and l'Institut Français
de Recherche pour l'Exploitation de la Mer (IFREMER). For a
period of three years, an interdisciplinary group of teachers
of science and technology, engineering sciences, life and
earth sciences, physics, chemistry, mathematics, history and
geography will work together. Mission Ocean thus fulfills
the requirements of Article 9 of the French law, loi pour la
confiance dans l'économie numérique, encouraging pupils to
play an active role in sustainable development. In 2020, an
interdisciplinary group of twelve teachers worked together
to create educational content dedicated to middle school
students.
In the field of research, the support provided by La Fondation
Dassault Systèmes in 2020 notably concerned:
} the work of the Olin College of Engineering in partnership
with the Monteray Bay Aquarium and Research Center in
the United States for the creation of a cockpit using virtual
reality to drive an autonomous operations vehicle seabed
exploration. Pilots and researchers will thereby benefit from
an unprecedented display of difficult-to-access underwater
environments;
} the work of the MINES ParisTech school on the modeling
of the lung cell and its therapeutic applications to better
understand the pathophysiology of respiratory diseases and
to identify new therapeutic strategies for diseases caused
by exposure to pollutants and certain genetic diseases
such as cystic fibrosis, or viral infections such as flu or the
SARS- CoV2 virus.
La Fondation Dassault Systèmes also made a special donation
to the Institut Gustave Roussy in France for its work towards
determining the prevalence and incidence of COVID-19 on
people with cancer.
Moreover, La Fondation Dassault Systèmes continues
to encourage and promote the commitment of Dassault
Systèmes employees who wish to pass on their knowledge
and know- how with passion. More than 250 volunteers
are involved in educational or research support initiatives.
In 2020, a new system was implemented in France enabling
employees benefiting from early retirement leave to devote
part of their time to a general interest organization to which
they provide their expertise during a one-year period.
Protecting personal data
We have always considered the protection of personal data as
a major issue for our clients and partners and are conscious
of the responsibility in the processing of personal data.
Since the introduction of the European Union’s General Data
Protection Regulation (GDPR), we have reasserted our data
protection commitment by improving our solutions through
new capacities that enable our clients and partners to manage
their GDPR compliance programs.
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Designation of a person or an entity as a data controller or
data processor has different obligations under the GDPR.
Thus, customers that have
licensed Dassault Systèmes
solutions are considered as being responsible for the processing
of personal data they are required to use in this context. When
Dassault Systèmes offers a company its cloud solutions, such
as the 3DEXPERIENCE platform, we act as a data processor for
the personal data we are requested to process and store, and
are considered as data controller when processing personal
data within the use of our internal applications.
Our solutions are designed according to the concept of Privacy
by Design, which aims to ensure that privacy is integrated into
applications from the design stage.
Outscale SAS (3DS OUTSCALE), a provider of Cloud Computing
infrastructure services, is certified Hébergeur de Données de
Santé (Health Data Hosting) issued by ASIP Santé and was
awarded SecNumCloud qualification by the Agence Nationale
de la Sécurité des Systèmes d'Information (ANSSI). 3DS
OUTSCALE, Dassault Systemes Global Services Private Ltd,
Medidata Solutions, Inc. (MEDIDATA), our BIOVIA Cloud
Sciences solutions and our DELMIA Quintiq Hosted Services
benefit from ISO27001:2013 (certification relating to the
information security management system). In addition, 3DS
OUTSCALE and MEDIDATA are certified ISO27018, related
to personal data protection in public Cloud. MEDIDATA also
produces a SOC2+ report covering in particular security aspects,
including physical and logical, IT hosting operations, such
as system monitoring and disaster recovery, as well as data
integrity, with electronic registration and electronic signatures
for example. In addition, 3DS OUTSCALE, in its capacity as a
cloud operator in France focused on trust issues, is involved
in the Franco-German GAIA-X project, which aims to federate
an offer with all stakeholders, mainly cloud-based, in Europe.
Our portfolio of personal data protection policies is structured
in three parts and covers the websites and activities of our
companies (customers, partners, visitors, etc.), employees
and job applicants. These personal data protection policies
and our internal processes have been updated in the light of
regulatory developments, in particular with consideration for
data protection laws applicable in the State of California in the
United States, and Japan. The annual review process to ensure
continued compliance has been put in place. Our personal data
processing register has been reviewed and we have improved
our processes for requesting personal data and notifying data
breaches through the platform 3DEXPERIENCE.
Training is a key requirement for all employees of Dassault
Systèmes. In 2020, beyond the mandatory training to allow
everyone to gain the required knowledge in terms of personal
data protection, we continued our training actions tailored to
specific roles.
In 2020, all requests relating to personal data were processed
within the legal timeframe. 1,260 employees completed
the online training, bringing the total number of trained
employees to 16,436, representing 98.4% of permanent
employees, compared to 16,140 employees in 2019.
In order to ensure our long-term compliance, we are continuing
to implement the actions and procedures defined: we will step
up our approach in the light of our new activities and newly
acquired companies, particularly in the healthcare industry,
and will continue the updating process of our personal data
protection policies, particularly in light of the changes in
national regulatory frameworks.
2.4.2 Facilitating innovation and collective intelligence
The 3DEXPERIENCE Lab is Dassault Systèmes’ collective
innovation laboratory. Its objective is to support breakthrough
products and services stemming from various industries, by
tapping collective intelligence in order to drive society forward.
This system
is based on the strong conviction that
breakthrough projects are born out of collective intelligence.
Its mission is to accelerate projects in the prototype phase
initiated by startups, innovator communities and research or
innovation laboratories and enable to market their products or
services on a large scale.
The 3DEXPERIENCE Lab supports projects that transform
society in a positive way and thus help to achieve the United
Nations’ Sustainable Development Goals. It aims to be a
strategic partner for breakthrough innovations that help to
change the world while reducing the ecological footprint. The
3DEXPERIENCE Lab thus supports projects based on themes
from everyday life, i.e. cities, lifestyles or life sciences, calling
on various innovation levers such as additive manufacturing,
big data or virtual reality. This approach is based on a
community of innovators, including:
} the 3DEXPERIENCE Lab core team, which manages governance
and implements the required technical and legal tools;
} innovation correspondents, employees of various Dassault
Systèmes’ organizations, who participate in the sourcing
and qualification of projects;
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} a community of participants that provides strategic
guidance and key ideas on specific topics and in which
decision-makers are responsible for arbitrations.
This community of innovators meets quarterly in project
presentation sessions where members and the jury express
their opinions.
The 3DEXPERIENCE Lab program offers each supported
startup the means to achieve its development by giving them
access to:
} the 3DEXPERIENCE platform allowing digital continuity
and the development of cross-organizational networks, to
capitalize on knowledge and know-how;
} a technical and commercial tutoring program in which each
Dassault Systèmes employee can provide their skills to
support startups in their digital project;
} Dassault Systèmes’ international ecosystem to accelerate
startups’ product launches and international footprint;
} events to increase their visibility.
In 2020, operational support for startups continued seamlessly
and in an inclusive manner thanks to the 3DEXPERIENCE
platform. A series of online conferences, particularly on
technical topics, also helped to maintain relationships and give
an impulse to each project. Two idea submission sessions were
organized and allowed for the selection of new projects. Thus,
since the creation of the 3DEXPERIENCE Lab in 2015, more
than 630 ideas were processed by 1,200 innovators from the
community. 36 projects stemming from the United States,
India or European countries are currently supported, including:
} Lucid Implants: offering medical devices, including virtual
planning by pre-surgical simulation in 3D and personalized
anatomical models allowing a perfect adaptation of the
surgical implants, thereby improving the quality of life of
patients;
} Dynocardia: developing portable blood pressure monitoring
technology;
} NeuroServo: offering a miniaturized and non-invasive tool
to analyze and diagnose the first signs of post-operative
delirium in real time;
} Splashelec: on the construction of a new type of more
inclusive boat allowing people with disabilities to practice a
physical activity through a water sport.
Following the announcement of the opening of the virtual
3DEXPERIENCE Lab in December 2019, we set up remote visits
of our innovation lab through immersive sessions allowing the
general public as well as professionals to discover the projects
supported by the program. Live sessions were broadcasted on
digital platforms such as YouTube and Facebook, attracting
more than 50,000 visitors. The interaction between visitors
and the 3DEXPERIENCE Lab
initiated new experiences,
democratizing new immersive technologies in virtual reality.
In March 2020, we opened a dedicated Open COVID-19
community to help coordinate numerous global initiatives to
identify, design and manufacture quick solutions during the
pandemic. This community brought together multidisciplinary
players (researchers, engineers, designers, doctors, etc.)
sharing their knowledge and know-how. It constitutes a
unique reference framework to support the design and
production thanks to the Marketplace or the local Fab labs
of the MIT Fab Foundation. In just a few weeks, more than
150 projects were shared: emergency ventilators were created
in India in eight days, in Mexico, 3D simulation calculations
of the spread of the virus revealed the measures to be
implemented in hospitals and companies, and 3D models of
protective equipment (masks, face shields, etc.) were designed
and then produced in prototyping areas.
In 2021, the 3DEXPERIENCE Lab will continue its international
expansion with new locations in Germany and China, including
prototyping areas to host startups, designers and innovators.
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2.5 Environmental responsibility
Since 1981, our contribution to collaborative innovation
has been
instrumental by connecting knowledge and
know-how and the creation of the virtual twin, through the
3DEXPERIENCE platform. Today, this technology is identified
as having significant potential to accelerate sustainable
transformation.
to present our approach
In order
to environmental
responsibility, and in particular climate action, we have chosen
to structure this section according to the recommendations of
the Task Force for Climate-related Financial Disclosures (TCFD)
and to cover the main issues defined therein.
2.5.1 Climate governance
Dassault Systèmes provides business and people with
3DEXPERIENCE universes to imagine sustainable innovations
capable of harmonizing product, nature and life. Sustainability
issues, including climate challenges, are core to Dassault
Systèmes’ strategy and are managed at the highest level
of corporate governance (see paragraph 2.1 “Sustainability
Governance”). Dassault Systèmes appointed an independent
director as lead director for sustainable development and its
presentation to the Board of Directors. The Executive Vice
President, Industry, Marketing & Sustainability, is responsible
for the Dassault Systèmes sustainable development roadmap
in terms of environmental footprint, and thus for the
mitigation of climate impacts within strategic decisions of the
company, as well as product development strategy to help
customers become more sustainable. The Chief Sustainability
Officer of Dassault Systèmes is responsible for the definition
and implementation of our sustainability strategy.
The Sustainable Development Committee brings together,
every month, all the key functions of the Company to discuss
actions plans and the progress made on cross-functional
matters. This committee is co-chaired by the Executive
Vice-President, Industry, Marketing & Sustainability and
the General Secretary of Dassault Systèmes. The Chief
Sustainability Officer is secretary of the committee.
From an operational perspective, the sustainable development
team coordinates a community of contacts across business
industries, on a
functions, geographies, brands, and
quarterly basis to ensure in particular the implementation
of sustainable development action plans and the reporting
of our environmental footprint. Since 2016, we have been
using Dassault Systèmes’ solutions to monitor and manage
in the
our environmental
3DEXPERIENCE Platform, thereby facilitating collaboration
among all contributors.
impact thought a dashboard
2.5.2 Climate strategy: solutions
Climate change and increasing demand on natural resources
represent major challenges (see paragraph 2.5.4 "Climate
change issues") to which Dassault Systèmes can make
a significant contribution by supporting the sustainable
transformation of the economy. Indeed, there is an urgent
need to catalyze transformational change in all industries in
order to achieve the United Nations Sustainable Development
Goals by 2030. This will require radically more sustainable
ways of managing products and services over their entire
lifecycle, from design to end-of-life. Virtual twins are part of
the solution as they are real time virtual representations of a
products, processes, or whole systems that are used to model,
visualize, predict and provide feedback on properties and
performance, and are based on an underlying digital thread.
Our virtual twins solutions can help companies significantly
reduce their resource use and carbon footprint. They are also
crucial to support our customer’s disruptive and sustainable
innovation processes, as well as more circular business models
that would be prohibitively expensive, risky, and complex to
develop and test in the physical world.
In fact, in a recent report produced in partnership with
Accenture (“Designing Disruption: The Critical Role of Virtual
Twins in Accelerating Sustainability”), we examined the
potential of virtual twins for environmental sustainability
impact and greenhouse gas emissions reduction that they
could have on 5 key industries by 2030 if they were to be more
widely adopted. We found that utilizing the power of virtual
twin technologies across the construction, transport and
mobility, consumer packaged goods, life sciences and High
Tech industries could unlock combined additional benefits
of US$1.3 Trillion of economic value and 7.5 GtCO2- eq
emissions reductions between now and 2030. Global
greenhouse gas emissions are currently projected to reach
around twice the 25-30 GtCO2-eq target range recommended
by the Intergovernmental Panel on Climate Change (IPCC).
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This target, which needs to be reached by 2030, would support
keeping global temperature increase within the 1.5°C range by the
end of the century. This makes virtual twins is a non-negligible
opportunity to contribute to reach the global carbon budget for
limiting global warming to 1.5°C.
Our virtual twin solutions specifically contribute to the design
of lighter products, the reduction of the quantity of materials
used, the extension of products’ lifetimes and recyclability,
as well as helping to reduce the energy consumption and
associated greenhouse gas emissions of our customers’
activities. By working on a single platform, designers and
engineers collaborate efficiently across the world, having
access to a considerable source of accumulated intellectual
property.
Manufacturing Industries
One of the major challenges of the consumer packaged goods
industry consists in reducing the quantity of materials used
for making packaging, as well as its re-use and recycling. Our
simulation solutions make it possible to identify potential
weak points and deformation areas in packaging, in order to
obtain light, raw material-optimized designs, while reducing
waste associated with defective products and facilitating
recycling and disposal. One of our customer makes an
estimated 20 billion packaging for thousands of consumer
goods, including food and beverage, healthcare, home and
personal products each year. While its level of production is
increasing, its environmental impact is decreasing. The use of
virtual twins since 2006 has enabled this company to gain in
terms of capacity to virtually improve the design of packaging
without producing physical prototypes for testing purpose,
thus reducing the amount of plastic used, the demand for
polyethylene terephthalate resin of more than 45,000 tons
per year as well as the weight of its bottles by 35% to 50%
while improving the performance of the containers produced.
By reducing weight, these designs also reduce the energy
required to transport. This project is part of the customer’s
commitment to develop all its packaging recyclable and
reusable by 2025 and to considerably increase the use of
recycled resin.
A European car manufacturer uses our solutions to perform
virtual crash tests on its vehicles to predict crashworthiness
and occupant safety. This application of simulation
technologies reduces development cycles and avoids the
manufacturing, disposal and recycling of costly and resource-
intensive physical prototypes, while meeting industrial safety
and environmental requirements.
In other areas, the 3DEXPERIENCE platform contributes
to developing energy-efficient and
lighter agricultural
equipment by supporting mechanical design as well as data
rationalization and tracking, thus reducing the impact on the
natural ecosystem and greenhouse gas emissions, protecting
soils and preventing their depletion. One of the world leaders
in transport and logistic optimized delivery routes and vehicle
loading, reducing travelled distance and associated greenhouse
gas emissions by around 15%, as part of its objective of
improving its carbon footprint by 50% by 2025.
Infrastructure & Cities
In the field of real estate and facilities management, the
application of virtual twins contributes to the optimization
of the construction and buildings management. Creating
a virtual twin from the conception phase of a project allows
to define, optimize and maintain efficient and productive
operations and systems by accurately simulating the impact
on energy consumption and maintenance productivity for
the whole life of the building. Virtual twin analysis as well
as facility management on the 3DEXPERIENCE platform can
reduce building energy consumption by 20% to 80% and
water consumption by similar amount. The 3DEXPERIENCE
platform enables our customers to benefit from a holistic and
360° vision of buildings, a source of value creation, particularly
in terms of asset performance, space management and user
comfort.
Steel and iron production in the world is essential in all
economic sectors,
including with the scope of energy
transition, and accounts for around 5% of global greenhouse
gas emissions, related in particular to heating and reheating
phase during the manufacturing process. The DELMIA
Quintiq solutions allow to optimize the programming process,
from fusion to end product, in a single heating cycle, while
guaranteeing the quality of these products. In addition, the
precise planning of production helps our customers in the
modeling of their circular economy by mapping and tracing all
inputs. Thus, one of customers improved the re-use of its own
materials by around 30%.
Petrochemicals are also used in numerous parts of modern
energy production systems such as in the production of solar
panels, wind turbine blades, batteries, building insulation
and electric vehicle parts. This industry accounts for around
28% of final energy consumption. Through the modeling,
simulation and prediction of polymer processes, our BIOVIA
solutions allow the development of new catalytic properties
that reduce the associated energy footprint, which accounts
for 50% of the operating costs.
Life Sciences & Healthcare
In the highly regulated pharmaceutical industry, it is essential
to ensure that the manufactured equipment complies with
technical specifications and regulations established to protect
human health and deliver positive and predictable outcomes
for patients.
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A pharmaceutical company had to commission a new machine
allowing the automatic filling of syringes with a precise
amounts of medicine, taking into account the drug formulation
process, fast filling, robotized control stations, in atmosphere-
controlled areas. Using digital twins made it possible validate
the testing and calibration of the machines throughout their
manufacturing process and to validate that production would
run correctly in different scenarios. In addition, the teams
gained valuable knowledge and experience in operating and
controlling through the information revealed during the
test phases, accelerating their readiness for production by
two- thirds of what is typical for such complex, high-precision
equipment.
Virtual twins are also crucial in the development of disruptive
medical
innovation such as cost-efficient personalized
prosthetics. Their design represents a challenge to ensure
biocompatibility and manufacturability, and prevent wear.
The SIMULIA Abaqus solution provides our customers with
a comprehensive platform for simulating joint assembly,
providing the industry with the information they need to
improve their designs and help secure regulatory approval.
Our solutions are also currently used in the ambitious Living
Heart project, which aims to develop and validate high-
precision personalized digital models of the human heart.
These models will revolutionize medical care overall by helping
guarantee the safety and efficiency of medical devices, the
design of new products in order to improve the efficiency of
clinical trials and reduce the number of trials on animals, or
the number of patients required, while reducing costs and
associated lead times.
Our solutions have already demonstrated their potential to
improve resource and carbon efficiency in manufacturing and
operations, as well as accelerate disruptive innovation in high
social impact disciplines such as medicine. Our goal now is to
take our sustainability ambitions further. Between this year
and 2025, as part of our wider commitment to sustainable
innovation, we will aim for two thirds of all new customer
licenses to be focused on solutions with an explicit and
measurable impact on sustainability.
2.5.3 Climate strategy: operations
As of December 31, 2020, the Company’s employees are spread
out across 188 sites in the three geographic regions in which
we operate. The data presented in the environmental report
covers Dassault Systèmes SE and all companies in which it has
a shareholding exceeding 50%. The majority of our indicators
cover the 60 main sites, representing 85.1% of the workforce
as at December 31, 2020 (see paragraph 2.8.2 “Methodology
for environmental reporting”). With the exception of the
office facilities belonging to Dassault Systèmes Solutions Lab
Private Ltd. located in Pune (India) and the office facilities
located in Paso Robles (California, United States of Americas)
following the acquisition of IQMS, the Company does not own
the offices it occupies and does not have full ownership rights
over any land or building, either directly or through a lease.
We choose our site locations with the objectives of supporting
our business growth, promoting synergies and collaboration
and improving working conditions for our employees while
controlling the environmental footprint of our operations.
Since 2008, we have implemented a policy of setting up our
activities in premises certified under environmental standards
such as Haute Qualité Environnementale, LEED or BREEAM,
or on sites applying an environmental management system
such as ISO14001. Sustainable development is now part of
real estate projects right from the inception of any plan to
move or open up a new site. In 2020, we strengthened the
environmental criteria, as well as the associated weighting,
within the reference framework for selecting new premises.
layout
In France, the architecture and infrastructure of the 3DS Paris
Campus reflect our long-term commitment and our resolve to
leave future generations an environment that is conducive to
fulfillment and the acquisition of knowledge. The buildings’
is designed to promote collaboration
open-plan
and innovation. It bears the certification NF Haute Qualité
Environnementale (HQE) Bâtiments Tertiaires, which
corresponds to the highest level of ecological construction and
ecological management in France. The Campus is equipped
with solar panels and uses renewable energy provided under
our electricity supply contract. It has a waste management
and sorting system, which quality was rated “compliant” or
“optimal” in all buildings in 2018, as well as a composting
facility for restaurant food waste. The parking lots are
equipped with electric charging stations, the number of which
was increased to more than 60.
The 3DS Boston Campus was designed with sustainable
innovation in mind. Our energy efficiency actions and our
ecological construction efforts have made it possible to reduce
the site’s negative impacts on the environment and improve
the satisfaction of employees by providing them with working
premises that are sustainably responsible and healthy,
having received the LEED Gold Construction certification
and the Team Massachusetts Economic Impact Award from
the Massachusetts Alliance for Economic Development
(MassEcon). The new interior facilities are equipped with
Massachusetts’ Eversource Energy Performance lighting and
employees are provided with car-sharing shuttles allowing to
use public transport for their daily commuting.
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Following the completion of the energy audits of 25 sites
in 2019, we launched an ISO50001 Energy Management
certification process covering around 25 sites in Europe by the
end of 2021. In addition, we plan to equip our buildings with
connected meters to monitor the level and sources of energy
consumption in real time, as well as any variations. The aim of
these systems is to help define plans to optimize and reduce
our consumption, in particular electricity, and thus reduce the
associated greenhouse gas emissions. In 2021, we plan to
equip around 15 sites in Europe. At the end of this first stage,
we will specify the deployment plan for the sites located in the
Americas and Asia.
As of December 31, 2020, 32 sites are certified, including
13 in Europe, 11 in the Americas and 8 in Asia. The energy
consumption of our facilities amounted to 65,657 MWh, of
which 87.3% are electricity related. 21 sites operate with low
carbon electricity, representing 43.9% of consumption.
into
Our Purchasing policy integrates sustainable development
and social responsibility criteria
its principles and
recommendations, to ensure that the best practices are
applied. As part of our continuous improvement approach, in
2019 we defined a “3DS Sustainable Charter with Suppliers”,
available in two languages on the Company’s website, detailing
our expectations and commitments. It is now included by
reference in our calls for tenders and will be extended to all our
contracts. In 2020, it was signed by more than 60 suppliers.
The environmental criteria, included in our specifications
submitted as part of calls for tenders, have been strengthened
and are subject to a weighting in the supplier evaluation grid
of up to 20%. To support our suppliers, this new approach is
implemented gradually. We also continued to raise awareness
among our buyers in order to define objectives and action
plans by geographic area and by procurement category in
2021.
Our efforts to limit the environmental impact of business
travel continued. Thus, our Travel Policy gives preference to
meetings by conference call or video conference rather than
by physical travel, train journeys rather than air travel for trips
under three hours in length, and use of economy class for air
travel. In 2020, this policy was subject to specific adjustments
due to the COVID-19 pandemic (see paragraph 2.3.5
“Preserving health and safety”), which translated into a
significant reduction in the number of trips during the period.
Since 2019, the review of our catalog of company vehicles
led to the integration of an increased number of models with
lower greenhouse gas emissions (hybrid and electric vehicles).
In France, these alternative powertrains accounted for 32% of
new orders during the year.
We place great importance on the environmental management
of our computer equipment. Our IT equipment management
policy lays down standards in terms of equipment allocation
to employees, thus ensuring that they are provided with the
required equipment while avoiding excessive use of electrical
and electronic equipment. The purchase of this equipment is
subject to calls for tenders including a social and environmental
aspect. Thus, we require that the companies taking part in the
tender provide the carbon footprint of the relevant products
and services, as well as the recycling measures for end-
of- life equipment. Technological improvements, in particular
the use of SSD-type hard drives and deduplication, give an
advantage of 31:1 in terms of energy consumption for data
storage, compared to the use of mechanical hard drives.
We also favor the pooling of services and IT applications on
virtualized servers, instead of physical servers, up to 90%.
The extension of our suppliers’ maintenance period, the life
cycle of our servers was gradually increased from three to five
years. Where servers are de-commissioned from data centers,
we strive to re-use them for other purposes within Dassault
Systèmes. In addition, we aim to extend the length of use of
computers provided to employees from three to four years.
In 2020, our recycling policy was extended to network and
audiovisual equipment in France, Spain, Russia and the United
States, which are gradually being integrated into our waste
electronic and electrical equipment monitoring program.
Since 2015, all electronic waste has been disposed of in
accordance with environmental standards. In 2020, 18.35
metric tons of waste electrical and electronic equipment
were collected, 99.9% of which was recycled. In Europe,
the refurbishment and recycling of this equipment
is
entrusted to sheltered-sector companies employing people
with disabilities. One of these companies recycles plastic
materials, in particular in order to produce urban furniture.
In 2021, we aim to standardize recycling in Europe through
a single service provider able to collect, process and recycle
all IT, audiovisual and electronic equipment at all of our sites.
In parallel with these various actions, we are continuing
to promote eco- friendly behavior among our employees
and to encourage a variety of local initiatives to reduce our
environmental footprint. In 2020, a solidarity-based collection
was organized in partnership with the WEEE Forum on the
international e-waste day at the 3DS Paris Campus and 3DS
Boston Campus sites. On this occasion, employees were
invited to drop off their obsolete or defective electrical and
electronic equipment. In France, the recycling was managed
by a company in the sheltered-sector, employing people with
disabilities, as well as by a State collection company, which
will make a financial donation, proportional to the weight of
the equipment collected, to a non-profit organization.
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2
In 2021, in order to control the environmental impact of our
facilities:
} we will equip around 15 sites in Europe with connected
energy meters;
} we will implement our ISO50001 energy management
certification process, which aims to cover around 25 sites
in Europe;
} we will continue our efforts to use low-carbon electricity for
new sites, the number of which will depend on the offers
available in each of our countries of operation.
2.5.4 Climate risks management
From 2016 to 2018, the share of sustainable investments
increased by an average of 34% in most financial markets. In
this context, the Environmental, Social and Governance (ESG)
performance of companies, assessed by rating agencies and
specialized rankings, has an impact on investment decisions.
It can therefore result in a risk of exclusion from investor
portfolios, a risk of losing customers, who are themselves
committed to maintaining relationships with sustainable
partners and a reputational risk for companies.
From an economic standpoint, the cost of inaction on climate
change increases over the years and could reach around
5.5% of GDP by 2050 (source OECD: “Climate change:
Consequences of inaction”), implying for companies, across
all industries, macro-economic risks (recession), financial risks
(insurance, investment impairment) and business continuity
risks (supplier and customer bankruptcies).
The frequency and associated costs of natural disasters and
damage caused by humans are increasing worldwide. These
serious events have significant consequences for companies,
such as the risk on human life, business continuity and
insurance costs.
Within this broad context, we recognize the important
challenge of climate change and sustainable development
issues. Sustainability issues being core to Dassault Systèmes’
strategy, it opens up opportunities for Dassault Systèmes
to provide business and people with 3DEXPERIENCE
universes to imagine sustainable innovations capable of
harmonizing product, nature and life (see paragraph 2.5.2
“Climate strategy: solutions”).
The Company has therefore set up a dedicated governance
structure and regularly assesses its performance compared to
other global players. Dassault Systèmes is committed to the
Science Based Target initiative and is developing an approach
aimed at achieving carbon neutrality in the long term. This
objective requires the implementation of an ambitious action
plan including, in particular, an approach to our policy of
responsible purchasing of goods and services, business travel
and the purchase of low-carbon electricity combined with
energy efficiency measures (see paragraph 2.5.3 “Climate
strategy: operations”).
Dassault Systèmes is committed, alongside of private and
public sector players, as well as non-profits, to promote and
build collectively a low carbon economy. Dassault Systèmes
joined global initiatives to promote sustainable development,
such as the Science Based Target (SBT), Task Force on
Climate- Related Financial Disclosures (TCFD) supporters’
network, Global Enabling Sustainability Initiative (GeSI),
Business for Social Responsibility (BSR) as well as the Ellen
MacArthur Foundation. We are ranked in the Corporate
Knights 2021 Top 100 Most Sustainable Corporations in the
World as well as Clean200, the annual list of publicly traded
companies offering sustainable energy transition solutions.
In 1st quarter 2021, we will join the European Green Digital
Coalition and the United Nations Global Compact.
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DASSAULT SYSTÈMES ANNUAL REPORT 20202 2 Social, societal and environmental responsibility
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2.5.5 Measurement system and targets
Gas
To analyze our carbon intensity, we use the “GHG Protocol”
(Greenhouse
www.ghgprotocol. org).
Protocol:
The assessment of greenhouse gas emissions, which make up
our carbon intensity per employee, includes direct emissions
of scope 1, related to natural gas, use of refrigerants, fuel for
generators and company cars, indirect emissions from energy
consumption of scope 2, related to electricity and urban heating
and cooling network, and some other indirect emissions
(scope 3) related to:
} business travels required to maintain our relations with our
customers and partners;
} employee commuting;
} capital goods mainly consisting of desktop and laptop
computers, servers and office furniture;
} recycling of electric and electronic waste.
We also assess indirect emissions related to the purchased
goods and services, mainly consisting in fees for consulting and
other intellectual services, subcontracting, communications,
insurance services, bank charges and other services required
for our activities.
The use of our solutions involves energy consumption by
our customers, which varies according to the application
and utilization time. We have defined a methodology to
estimate associated greenhouse gas emissions based on the
number of users, the average consumption per user and the
application of energy emission factors. Moreover, Dassault
Systèmes’ applications have different impacts, depending on
industry segments, customers and users. Only a case-by-case
assessment of the reduction in greenhouse gas emissions from
the use of the 3DEXPERIENCE platform would be relevant
(see paragraph 2.5.2 “Climate strategy: solutions”).
The uncertainty factor is very high, mainly due to the use
of monetary ratios, energy emission factors, estimated
distances travelled, number of users and associated average
consumption. Thus, these estimates must be considered as an
order of magnitude.
Values in tCO2-eq
Scope 1
Scope 2
Scope 3(2)
2020
2019
2018
Workforce
in-scope(1)
16,842
16,842
Values
4,629
15,331
Workforce
in-scope(1)
14,144
14,144
Values
5,403
17,576
Workforce
in-scope(1)
12,895
12,895
18,956(3)
57,294
16,409(3)
83,248
13,736(3)
Carbon intensity per employee Scope 1, 2 and 3(4)
4.1
6.7
Values
7,501
20,353
79,494
8.1
Scope 3 – Purchased Goods and Services
Scope 3 - Use of our solutions by our customers
19,555
77,601
16,441
67,703
15,021
51,478
483,625
551,656
511,950
(1) The scope refers to total headcount excluding companies or countries as detailed in paragraph “2.8 Reporting methodology”.
(2) The indirect emissions from Scope 3 exclude emissions related to the use of solutions by our customers and emissions related to purchased goods and services.
(3) The headcount in-scope shown corresponds to the average headcount in-scope for the sources of emissions included in reported Scope 3.
(4) Carbon intensity includes scope 1, 2 and 3 greenhouse gas emissions excluding emissions related to the use of our solutions by our customers as well as emissions related to
purchased goods and services, in relation to the average headcount in scope.
} temporarily closed our sites during lock-down periods or
adjusted on-site presence in compliance with sanitary
recommendations, leading to a reduction of more than 62%
of employee commuting-related emissions and nearly 27%
in emissions related to electricity consumption.
Environmental
“Environmental, Social and Governance metrics”.
indicators are detailed
in paragraph 2.7
Dassault Systèmes is committed to reducing the carbon
intensity per employee by 38% by end 2025 compared to
base year 2018, for which the intensity was 8.1 tCO2-eq,
corresponding to a 5 tCO2-eq target for 2025.
In 2020, our carbon intensity per employee has decreased by
39% compared to 2019. Due to the COVID-19 pandemic, we
have indeed:
} significantly limited business travels, leading to a 57%
reduction in travel-related emissions and nearly 40% of
emissions related to company cars;
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2
2.6 Business Ethics and Vigilance Plan
2.6.1 Promoting Strong Business Ethics
Compliance with the rules of ethics and international standards
is an integral part of the purpose of Dassault Systèmes, which
is “to imagine sustainable innovations capable of harmonizing
products, nature and life”.
of the new rules regarding the fight against corruption
(French Sapin 2 Law) and personal data protection (GDPR).
This Code also includes references to the Company’s policies,
in particular concerning competition law and export controls.
Since its creation, the Company has developed its culture
and built its reputation on different fundamental principles,
particularly the creation of long-term relationships with its
stakeholder – employees, customers, partners, shareholders,
regulatory bodies and government agencies – 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 and ethical growth.
The Company’s commitment concerning business ethics and
corporate social responsibility is asserted through:
} rules applicable to all Dassault Systèmes employees;
} an ethics and compliance governance system;
} employee awareness-raising and training.
Rules of ethics and compliance applicable within
Dassault Systèmes
Dassault Systèmes’ business ethics rules are formalized in
corporate governance policies and procedures, in particular
through its Code of Business Conduct, introduced in 2004,
and its Corporate Social Responsibility Principles.
Code of Business Conduct
This Code describes the manner in which the Company expects
its business to be conducted. It addresses issues including:
(i) compliance with regulations applicable to Dassault
interactions within
Systèmes’ businesses; (ii)
the Company and with its ecosystem and; (iii) protecting
the Company’s assets (in particular, Dassault Systèmes’
intellectual property and that of its customers and partners).
The Code also includes specific policies on the fight against
corruption and influence-peddling, personal data protection,
conflicts of interest and insider trading (see paragraph 2.6.2
“Striving for Transparent Business Relations”).
individual
In 2020, the new version of the Code of Business Conduct
was rolled out within the Company following the review and
modernization process carried out in 2019 to take account
Corporate Social Responsibility Principles
The Corporate Social Responsibility Principles are based upon
international standards – also referred to in the new version of
the Code of Business Conduct – relative to human and social
rights and the protection of the environment, as laid down in
the United Nations International Bill of Human Rights, the
International Convention on the Rights of the Child, the OECD
Guidelines for Multinational Enterprises and the Fundamental
Conventions of the International Labor Organization.
These Principles provide for the following:
} prohibiting the employment of school-aged children (and
in any event those under 15 years of age), banning forced
labor and other forms of modern slavery as well as all
forms of discrimination (in recruitment as well as career
development and employment termination);
} providing satisfactory working conditions guarantees to
preserve employee health and safety;
} complying with minimum legal and regulatory requirements
concerning pay, freedom of association and the protection
of labor union rights and the right to collective bargaining;
} ensuring zero tolerance for corruption and
influence
peddling;
} complying with regulations relating to the protection of
personal data and the protection of the environment.
The Code of Business Conduct and the Corporate Social
Responsibility Principles are available on the Company’s
website
(https://www.3ds.com/about-3ds/what-drives-us/
ethics-compliance) and on its internal platform.
They serve as a reference for Dassault Systèmes employees,
to guide their behavior and interactions in their daily business
activities. They also strive to inspire the Company’s partners
and suppliers (see paragraph 2.6.4 “Commitment to Ensure
Respect for Human Rights”).
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DASSAULT SYSTÈMES ANNUAL REPORT 20202 } assessing Dassault Systèmes’ ethics and compliance risks
and preventing them;
} conducting investigations in order to deal with the breaches
that arise, or help the local teams to do so;
} assessing the ethics and compliance procedures and putting
forward proposals to the Ethics Committee concerning
any upgrade to Dassault Systèmes’ ethics and compliance
program.
The Business Ethics and Compliance department assesses and
investigates all the alerts it receives, in particular through the
whistleblowing procedure. This gives rise to the opening of
formal investigations by the Business Ethics and Compliance
department, which are then submitted to the Ethics
Committee.
Employee awareness-raising and training
Employee
especially
awareness-raising
concerning corruption, are an essential pillar of the Company’s
commitment in terms of ethics and compliance.
training,
and
A mandatory online training course on ethics and compliance
is thus an integral part of the onboarding program for all new
employees. This course, available in 11 languages, comprises
13 modules, each of which is broken down into a theory
section followed by practical applications in a question/
answer format. The topics covered include:
} the fight against corruption;
} protection of intellectual property;
} personal data protection;
} respect for confidentiality;
} ethics in the workplace with a focus on potential harassment
and discrimination situations;
} compliance with competition law;
} strict monitoring of exports;
} IT security;
} prevention of conflicts of interest, etc. .
As of December 31, 2020, a total of 16,434 employees representing
98.4% of the base workforce had attended this general training
course, compared to 16,173 on December 31, 2019.
2 Social, societal and environmental responsibility
Business Ethics and Vigilance Plan
Dassault Systèmes’ ethics
and compliance governance system
Dassault Systèmes’ ethics and compliance governance system
relies on an Ethics Committee and a Business Ethics and
Compliance department.
They deal with all investigations relating to ethics and
compliance, including in connection with the protection
of intellectual property, confidentiality, the fight against
corruption and fraud, compliance with rules regarding
competition and the control of exports, the protection of
personal data, IT security, ethics in work relations, in particular
the fight against discrimination and harassment, the use of
social media and networks and the monitoring of potential
conflicts of interest.
The Ethics Committee
The Company’s Ethics Committee meets once a month.
Its members are:
the Company’s General Secretary,
the Executive Vice President, Chief People & Information
Officer, the General Counsel, the Internal Audit Director, the
CEO’s Chief of Staff and the Director of the Business Ethics
and Compliance department.
The Committee ensures that employees comply with the
rules laid down in the Code of Business Conduct. It is thus
tasked with investigating any alleged breaches brought to its
attention, in particular through the Company’s whistleblowing
procedure.
In 2020, the Ethics Committee examined 43 cases opened due
to suspected non-compliance. Inquiries were conducted into
all of these cases. 44% of them were found to have involved
breaches of Dassault Systèmes’ Code of Business Conduct.
The Ethics Committee took remediation and disciplinary
actions – including dismissals – in all cases concerned.
The Business Ethics and Compliance department
This department reports to the Company’s General Secretary.
It is responsible for ensuring the implementation and respect
of the Code of Business Conduct of Dassault Systèmes, as well
as the specific Dassault Systèmes policies, recommendations
and procedures regarding ethics and compliance.
Its role is to define and implement Dassault Systèmes’ ethics
and compliance program in coordination with the Ethics
Committee. It is tasked with the following, in coordination
with other Company’s departments:
} promoting a culture of integrity within the Group, in
particular by ensuring that employees are adequately
trained and informed;
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2.6.2 Striving for Transparent Business Relations
In addition to promoting strong business ethics, Dassault
Systèmes asserts its commitment to sustainable, ethical
growth through its anti-corruption program.
The fight against corruption
The Code of Business Conduct is the main pillar of the
Company’s anti-corruption program.
the
Company’s zero-tolerance policy regarding corruption and
influence peddling, including bribes and facilitation payments,
irrespective of local customs or commercial pressure, even if
this results in the loss of business opportunities.
reiterates
It
Accordingly, 3DS employees must remain vigilant and
comply with applicable laws and regulations. They must
never, either directly or indirectly, encourage, offer, attempt
to offer, authorize, promise or accept any form of advantage
(e.g. payments, gifts, bribes or kickbacks) to obtain or retain
a contract or to secure any improper advantage, even if they
think they are acting in the best interest of 3DS.
Examples:
} gifts and invitations must be of reasonable amounts,
as defined in the Anti-Corruption Policy. They must be
compatible with local customs and practices and comply
with applicable laws. They must be appropriate and must
not include items that are likely to be embarrassing for the
Company in the event of their public disclosure;
} Dassault Systèmes makes no political contributions
and provides no advantages in the aim of promoting or
supporting a particular political party or public official.
The Company’s employees are prohibited from using any
Company resources to provide any advantage to political
parties or public officials.
The provisions of the Code of Business Conduct relating to the
fight against corruption are supplemented with the following
policies and procedures:
} a “Dassault Systèmes Anti-corruption Policy” (updated in
December 2017 and July 2019);
} the “Dassault Systèmes Guidelines for dealing with
Intermediaries” (June 2017);
} the “Dassault Systèmes Guidelines on Conflicts of Interests”
(April 2017);
} a “Dassault Systèmes Internal Whistleblowing Procedure”
(updated in December 2017).
At December 31, 2020, a total of 16,317 employees representing
97.7% of the base workforce, compared to 15,956 on December 31,
2019, had received training via a module dedicated to the fight
against corruption “Understanding anti-corruption principes“.
The Company’s program for corruption prevention is based not
only on these policies, guidelines, whistleblowing procedure,
communications and employee awareness/training programs,
but also on:
} the Business Ethics and Compliance department;
} a specific corruption and influence peddling risks mapping,
periodically updated, in line with the Company’s activities;
} an internal control and audit system;
} stringent operational processes;
} a community of Compliance Ambassadors composed of
legal, financial and operational experts who provide support
to the Business Ethics and Compliance department in the
Company’s local entities.
The risks of corruption and influence peddling arising from the
Company’s business model include the following:
} its reliance on intermediaries (distributors, agents and
system integrators). Such intermediaries are independent
third parties and are fully liable for their actions, but the
Company could,
in certain circumstances (negligence
or willful blindness), be held liable in the event such
intermediaries were to make illicit payments to generate
revenue;
} trading directly or
in
“higher risk countries” and/or qualified as “public officials”.
indirectly with clients deemed
Dassault Systèmes systematically manages these risks
through the policies, procedures and training courses
described above. In particular, the Company has strengthened
its policy of applying reasonable diligence in the selection
of intermediaries, through additional processes including
a self-administered questionnaire,
reputational checks
via compliance databases, the verification of the services
performed by the agents and the approval of the Business
Ethics and Compliance department. Accounting controls are
also carried out by the dedicated teams. Moreover, the Internal
Audit department may include specific checks as part of the
evaluation of Internal Control or ad hoc audits in order to
prevent or detect possible cases of fraud or non-compliance
with the Company’s rules and procedures.
The Company’s anti-corruption training course
includes
raising the awareness of its employees on the risks of dealing
with public officials. For example, the Company’s rules
concerning gifts and invitations are stricter for public officials.
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Moreover, in certain countries with higher risks of corruption,
Dassault Systèmes’ distributors are specifically made aware of
the Company’s policies and “zero tolerance” rules concerning
corruption through on-sites training.
Lastly, Dassault Systèmes measures the performance of its
anti-corruption program through key performance indicators
that cover its mandatory training courses’ implementation
rate (see above).
2.6.3 Fiscal transparency and policy
Dassault Systèmes’s commitment to ethical and sustainable
growth is supported by a transparent and responsible tax
policy in all countries where the Company operates. In line
with this commitment, the Company’s tax policy relies on
three key principles: tax compliance, tax transparency, and tax
responsibility.
2.6.3.1 Tax policy
Dassault Systèmes tax policy is defined according to applicable
in European
regulations, notably the principles found
directives and OECD recommendations, and it is implemented
in accordance with the Company’s business and operational
objectives.
Tax Compliance - Dassault Systèmes complies with tax
regulations
The Company prepares and files all required tax returns and
pays all taxes accordingly. It also provides accurate and timely
disclosures to all relevant tax authorities.
Dassault Systèmes applies the arm’s
length principle
consistently across the business (contingent on local laws),
defining prices in line with guidelines issued by the OECD.
it complies with
local tax
The Company ensures that
regulations wherever it operates, by monitoring regulatory
changes and the possible technical divergences that may arise
from their interpretation. It also complies with its Annual
Reporting obligations on a country-by-country basis. It also
ensures that all taxes are properly assessed and paid in all the
countries where they are due.
The Company benefits from tax
incentives offered by
Government authorities to support investment including in
R&D, employment and economic development. They are
implemented according to the relevant
legislations and
regulations, and are aligned with Dassault Systèmes’ business
and operational objectives.
Tax Transparency - Dassault Systèmes is open and
transparent with tax authorities
The Company seeks, whenever possible, to develop cooperative
relationships with tax authorities, based on mutual respect,
transparency and trust. On occasion, local tax authorities
may challenge the Company’s positions in the course of
tax audits, particularly in instances where there is divergent
interpretation of local or international tax provisions. In such
cases, Dassault Systèmes may opt for litigation when that
approach is considered to be justified.
In case of doubt about an applicable tax treatment, the
Company may seek rulings from tax authorities. Hence,
Dassault Systèmes can request Advance Price Arrangements
on an appropriate transfer pricing methodology.
On a voluntary basis, Dassault Systèmes recently entered
into the International Compliance Assurance Programme
(ICAP), an OECD pilot program in which taxpayers and tax
administrations work cooperatively and multilaterally to
review international tax practices of participating companies
in order to assess their level of tax risk.
Furthermore, the Company participates in some of the OECD
working groups or national and international initiatives that
promote and encourage tax transparency.
Tax Responsibility - Dassault Systèmes is committed
to having a responsible tax policy
The Company uses business structures which are driven by
business considerations and which have genuine substance.
Dassault Systèmes is committed to having no non-operational
legal entities in Non-Cooperative Countries and Territories
(tax heavens) as defined by French and European Union tax laws.
In the context of its external growth, the Company performs
thorough tax due diligence and might seek to change practices
that are not aligned with the tax policy outlined herein.
Finally, Dassault Systèmes neither encourages nor promotes
tax evasion.
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2.6.3.2 Tax organization and governance
A dedicated team of skilled tax professionals with extensive
knowledge and expertise of international tax matters (the “Tax
department”) has the mission to support all Company’s
entities and functions from a tax standpoint in all matters
that could have a tax impact. The head of Tax reports to the
Executive Vice President Finance and supervise directly all Tax
team members.
Dassault Systèmes Tax department aims to develop close
relationships with its businesses partners to provide clear,
relevant and timely guidance on tax matters, including
identification of tax risks and opportunities, if any. It also
relies on external tax advice if needed. The Tax department
is involved in strategic operations, including acquisitions,
from planning to implementation to ensure that appropriate
tax treatment is consistently applied and tax exposure are
managed. The Tax department also establishes all necessary
processes and controls to ensure the proper implementation
of Dassault Systèmes Tax policy.
2.6.4 Commitment to Ensure Respect for Human Rights
Dassault Systèmes’ commitment to sustainable and ethical growth
rests on the fundamental value of respect for Human Rights.
Dassault Systèmes' commitments in this regard are formalized
in the Corporate Social Responsibility (CSR) Principles, available
on the Dassault Systèmes website (https://www.3ds.com/
fileadmin/COMPANY/Ethics-and-compliance/CSR-Principles-
ENG-27-11-2018.pdf) . They were strengthened in the new
version of the Code of Business Conduct. This Code reasserts
that Dassault Systèmes is committed to providing a work
environment which is free from any form of discrimination,
harassment or intimidation and to ensuring that its employees,
clients and partners are treated in a respectful way at all times.
Moreover, in 2020, Dassault Systèmes published a statement
of the measures it has taken to combat modern slavery and
human trafficking, as required by the UK’s Modern Slavery
Act.
corporate
also promotes
Dassault Systèmes
social
responsibility within its ecosystem, as its suppliers and
partners are required to abide by these CSR Principles. Most
Dassault Systèmes companies’ standard contracts and general
purchasing terms and conditions thus provide for the right to
immediately terminate the contract in the event of a supplier’s
breach of any of these Principles. Furthermore, the Company
is committed to “Responsible Purchasing” characterized in
particular by the implementation of 3DS Sustainable Charter
with Suppliers which includes these Principles. In 2020,
more than 60 suppliers signed this charter (see sections 2.5.3
“Climate Strategy: operations” and 2.6.5 “Maintaining an
Appropriate Vigilance Plan”).
In order to manage and mitigate risks of non-compliance
regarding Human Rights and
freedoms
throughout the Company, Dassault Systèmes relies on its
fundamental
mandatory online training course Understanding ethics
and compliance rules, as well as its internal whistleblowing
procedure,
introduced within the scope of the French
law relative to the duty of vigilance of parent companies.
The procedure enables Dassault Systèmes employees to report
any risk of serious violation of Human Rights or fundamental
freedoms.
At Dassault Systèmes, the goal is to prevent risks of
discrimination or harassment and to ensure working conditions
that preserve people’s health and safety (see paragraph 2.3.5
“Preserving health and safety”). In 2020, a review was carried
out in all countries where Dassault Systèmes operates to
verify the compliance of its practices with local legislation for
combating discrimination and harassment. This permitted
to check the need for a specific policy and training on these
issues, as well as a local whistleblowing procedure and
governance. In addition, the banning of discrimination is part
of the Company’s internal policies and procedures, particularly
concerning recruitment processes and managerial training.
The new version of the Code of Business Conduct includes
clear definitions of harassment and discrimination, along with
examples. Furthermore, the Company implements a policy
of inclusion for persons with disabilities and pays special
attention to gender equality issues (see paragraph “5.1.7.5
Gender Equality within the Executive Team and Top Positions
of Responsibility”).
Dassault Systèmes measures its Human Rights performance
through key performance
including the rate
of participation in its mandatory online training course
“Understanding ethics and compliance rules”, as well as the
percentage of cases examined by the Ethics Committee in this
regard.
indicators
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2.6.5 Maintaining an Appropriate Vigilance Plan
As stated above, Dassault Systèmes is committed to conducting
its activities in compliance with the laws of the countries
in which it operates and in accordance with international
standards.
In accordance with the French Law of March 27, 2017 relative
to the duty of vigilance of parent companies and contracting
undertakings, Dassault Systèmes has set up a vigilance plan
(the “Plan”) covering the following three areas: human rights
and fundamental freedoms, the health and safety of persons
and the environment (the “Areas”).
is
The Plan
implemented by the Company’s various
stakeholders, i.e. mainly the Procurement department, Internal
Audit department and Human Resources department. It is
monitored by a Steering Committee composed of members of
these departments and of the Business Ethics and Compliance
department, which are also responsible for the assessment of
these procedures.
Report on the implementation of the 2020 Plan
For 2020, the Plan consisted of some twenty measures to
be implemented on the short and medium terms within a
structured process, of which the year’s major accomplishments
are the following:
} the continued deployment of the Company’s Corporate
Social Responsibility Principles and
the updated
whistleblowing procedure to include aspects relating to the
duty of vigilance. As of December 31, 2020, these policies
and procedures have been rolled out in 15 and 14 languages
respectively; the whistleblowing procedure was also subject
to a specific review in the newly-acquired companies by
Dassault Systèmes;
} the updating of the risk mapping in the three areas of duty
of vigilance within the Group, through a risk assessment
process conducted with contributors in different entities
and functions of the Company. This assessment revealed a
high level of risk control, in line with Dassault Systèmes’
standards in terms of governance. No risk was deemed to
require priority actions;
} the completion of the analysis of the risks of the Company’s
sites in terms of “Employee Health and Safety”, which made
it possible to analyze all the Dassault Systèmes sites; this
procedure is usually buttressed by the regular occurrence
of crisis management exercises to train teams and inform
them of risks and the provision of online crisis management
training; in 2020, the health crisis led to the establishment
of a crisis management organization at the central level of
the Company to manage day-to-day challenges, relying on
both the Geographies and the site managers of the Group
(see paragraph 2.3.5 “Preserving health and safety”);
} the Company-wide audit of applicable local laws in terms
of medical teams and duty of care of the employer, as well
as an audit of insurance coverage in the event of workplace
accidents;
} raising employee awareness on issues surrounding duty
of vigilance, in particular the Dassault Systèmes internal
whistleblowing procedure, through actions for rolling out
the new version of the Code of Business Conduct throughout
the year (deployment, presentations, training);
} the deployment of the 3DS Sustainable Charter with
Suppliers for the Company’s suppliers. More than 60
suppliers signed this charter in 2020 (see section 2.5.3
“Climate Strategy: operations”); In addition, in response
to the requirements of Duty of Care and Sapin 2 laws,
the Procurement department strengthened its supplier
monitoring in 2020. A real-time monitoring of adverse
media and sanction lists is made on our risky suppliers.
The volume of suppliers monitored represents more than
50% of our spend. Based on weak signals analyzed in 2020,
no on-site audit was carried out at our suppliers;
} the revised and updated standardization of a procedure for
monitoring and assessing the Plan’s measures to include
the qualitative and quantitative indicators used to manage
the vigilance plan. The system also includes meetings of
its Steering Committee, on a multi-year basis, and the use
of dedicated tools. In 2020, the Vigilance Plan Steering
Committee met four times.
The initiatives introduced in the area of environment continued
(see Sections 2.1 “Sustainability Governance” and 2.5.3
“Climate Strategy: operations”).
2021 Vigilance Plan
For 2021, the Plan is based on the Company’s internal
whistleblowing procedure, the mapping of Dassault Systèmes
and supplier risks and the related assessments, risk prevention
and mitigation measures and a procedure to monitor the
measures.
The risk assessment, and more specifically the assessment
conducted in 2020, revealed the limited nature of the risks of
serious harm in the three Areas of the duty of vigilance, which
could be the result of the Company’s activities or business
model (see chapter 1 “Presentation of the Company”) or
those of its suppliers or subcontractors. Indeed, due to their
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almost
intangible nature, software publishing activities
involve almost no assembly of products from a supply chain.
However, Dassault Systèmes uses this mapping to strengthen
its approach to “responsible procurement” (see section 2.5.3
“Climate Strategy: operations”).
In 2020, the Company also accelerated its efforts on sustainable
development issues, particularly in the area of environment,
for example: the hiring of a Chief Sustainability Officer, the
creation of a Sustainability Committee, the publication of
a "3DS Environmental Statement", Membership in the SBTi
(Science-Based Targets
initiative). These actions, which
are part of the Company’s overall approach to sustainable
development, help to strengthen its commitments in terms of
environmental protection (see paragraphs 2.1 “ Sustainability
Governance” and 2.5.3 “Climate Strategy: operations”).
For 2021, the Plan thus includes appropriate, proportionate
to the Company’s risk profile, vigilance measures to be
implemented on the short or medium terms to prevent or
mitigate risks in the Areas covered by the law. Some of these
measures consist in the continuation or monitoring of the
actions initiated under the 2020 Plan, while others are new.
For 2021, Dassault Systèmes has chosen to focus on the
following work-related themes:
} health: this remains a major focus of the Plan, especially as
a result of current health crisis; the Plan for 2021 provides
in particular for the development of a health policy at
Company level and a Company commitment charter on that
subject, as well as the implementation of recommendations
concerning vaccination against COVID-19 in the workplace;
} Dassault Systèmes’ internal whistleblowing procedure:
it will be reviewed to verify its compliance with Directive
(EU) 2019/1937 on the protection of persons who report
breaches of Union law (whistleblowers) coming into force
end-2021; the Plan also provides for an audit on the
deployment of the whistleblowing procedure;
} the fight against discrimination and moral and/or sexual
harassment: in 2021 Dassault Systèmes will continue to roll
out training in this area in around ten countries where the
Company operates.
Other measures of the 2021 Plan include the continuation of
initiatives begun in 2020 such as:
} in the area of personal health and safety: the addition of a
“health” section to the Dassault Systèmes site safety and
security assessment tool and raising awareness among site
managers on these topics at the Company’s sites;
} regarding purchasing: continued deployment of the 3DS
Sustainable Charter with Suppliers;
} in the area of Human Rights: the finalization of the
deployment of the updated Corporate Social Responsibility
Principles.
Dassault Systèmes exercises vigilance through recurring
actions to deepen the knowledge of its employees, such as
(i) monitoring and updating online training courses pertaining
to ethics, compliance and security, crisis management,
environmental responsibility and (ii) posts published on its
internal platform.
Finally, the Company’s whistleblowing procedure, the
software for preventing non-compliance issues and the control
points put in place by internal audit in its audit model are also
tools for exercising vigilance.
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DASSAULT SYSTÈMES ANNUAL REPORT 20202 2 Social, societal and environmental responsibility
Environmental, Social and Governance metrics
2.7 Environmental, Social and Governance metrics
Environmental, social and governance (esg) performance metrics
The Environmental, Social and Governance strategy is defined in the Sustainability Compass of the Company and will guide our
actions for sustainability over the coming years. It includes the 2025 objectives summarized in the following table:
Environment
Carbon intensity - in tCO2-eq per FTE(2)
Social
% of women People Managers
% of employees trained on ethics
and compliance(3)
% of pride and satisfaction(4)
Governance
2020
2019
2018
Workforce
in-scope(1)
Values
Workforce
in-scope(1)
Values
Workforce
in-scope(1)
Values
Objective
2025
18,713
4.1
15,846
6.7
13,292
8.1
5
19,789
20.7%
19,361
18.8%
16,055
17.0%
16,746
19,413
98.2%
82.5%
16,684
16,251
96.9%
78.0%
15,618
15,701
89.3%
76.9%
30%
95%
85%
% of women on the Executive team
19,789
38.5%
19,361
22.2%
16,055
22.2%
40%
(1) The scope refers to total headcount excluding companies or countries as detailed in paragraph “2.8 Reporting methodology”.
(2) Carbon intensity includes scope 1, 2 and 3 greenhouse gas emissions excluding emissions related to the use of our solutions by our customers as well as emissions related to
purchased goods and services, in relation to the average headcount in scope.
(3) Percentage of employees that completed mandatory training on Business Ethics, Personal Data Protection and Anti-Corruption.
(4) Pride and satisfaction rate of employees measured by an internal annual survey.
Dassault Systèmes is committed to reduce the carbon intensity
per employee by 38% by end 2025 compared to base year
2018, for which the intensity was 8.1 tCO2-eq, corresponding
to a 5 tCO2-eq target for 2025.
In 2020, our carbon intensity per employee decreased by 39%
compared to 2019.
Due to the COVID-19 epidemic, we have indeed:
} significantly limited business travel, leading to a 57%
reduction in travel-related emissions and nearly 40%
reduction of emissions related to company cars;
} temporarily closed our sites during lock-down periods or
adjusted on-site presence in compliance with sanitary
recommendations, leading to a reduction of more than 62%
of employee commuting-related emissions and nearly 27%
of emissions related to electricity consumption.
The Sustainability Compass of the Company also includes the
following objectives:
} define a science-based target for greenhouse gas emissions:
on December 2, 2020, we announced our commitment
to the Science Based Target initiative, confirming our
intention to set an ambitious series of targets to reduce our
greenhouse gas emissions, in order to achieve the objectives
of the Paris Agreement;
} two thirds of new licenses having a positive impact on
sustainable development: our solutions portfolio already
supports our customers to be more efficient in the use of
resources and to reduce their environmental footprint.
Today, we place this value at the center of our offers;
} engage 5,000 stakeholders: we are rolling out various
programs to mobilize our ecosystem,
including our
employees, our suppliers, our customers, students as well as
non-profits around sustainable development issues, because
we believe that our success hinges on a collective effort.
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Environmental, Social and Governance metrics
2
Other social, societal and environmental indicators
2020
2019
2018
Workforce
in-scope(1)
Values
Workforce
in-scope(1)
Values
Workforce
in-scope(1)
Values
Human Capital (Sustainability Accounting Standards Board)
2.3.1 Company Organization and Workforce
% headcount growth
% of permanent contracts
% of women in the Company
Gender Equality Index(2)
2.3.2 Attracting talented individuals
% of job offers filled by referral
% conversion of interns and apprentices(3)
2.3.3 Developing knowledge and know-how
19,789
19,789
19,789
3,618
16,746
16,746
% of employees who received training
16,746
87.6%
-
Average number of training hours per employee
% of job offers filled by internal applications(4)
2.3.4 Developing employee engagement
Knowledge of the Company and sharing our values
16,746
23.5 hours
16,746
36.9%
16,684
16,684
2.2%
99.1%
26.8%
19,361
19,361
19,361
20.6%
98.9%
26.2%
95/100
3,593
86/100
16,055
16,055
16,055
-
5.4%
98.7%
23.7%
-
24.3%
9.8%
16,684
16,684
22.5%
23.8%
15,618
14.5%
-
-
-
-
-
-
-
20.6
hours
31.2%
15,618
31.7%
% of certified employees
Managerial skills
% of certified managers
Work Environment
% Satisfaction
2.3.5 Preserving health and safety
Absenteeism rate
Number of occupational accidents
2.3.6 Retaining our talents
16,746
72.4%
16,684
59.9%
15,618
37.0%
16,746
75.8%
16,684
65.4%
15,618
61.1%
140 sites
80% 134 sites
73%
131 sites
72%
15,866
15,866
2.3%
19
15,761
15,761
1.8%
18
14,931
14,931
1.9%
15
Average rate of employees leaving at their own initiative
19,789
5.3%
19,361
7.6%
16,055
7.8%
Social Capital (Sustainability Accounting Standards Board)
2.4.1 Digital responsibility
Protection of personal data
% of employees trained
16,746
98.4%
16,684
97.3%
15,618
82.2%
(1) The scope refers to total headcount excluding companies or countries as detailed in paragraph “2.8 Reporting methodology”.
(2) The Gender Equality Index (Index Egalité Femmes-Hommes) reported covers Dassault Systèmes SE. It is calculated each year in respect of the previous year.
(3) Rate of conversion, under permanent or fixed-term contracts, of the total number of interns and apprentices, whether they continue their educational training or they are
graduated.
(4) Rate of job offers requiring at least three years professional experience filled by internal candidates.
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DASSAULT SYSTÈMES ANNUAL REPORT 20202 2 Social, societal and environmental responsibility
Environmental, Social and Governance metrics
Environment (Sustainability Accounting Standards Board)
2.5.2 Climate strategy: solutions
Scope 3 - Use of our solutions by our customers - tCO2-eq
2.5.3 Climate strategy: operations
Scope 1 - in tCO2-eq
Natural gas
Fuel
Refrigerants
Company cars
Scope 2 - in tCO2-eq
Electricity
% of low-carbon electricity
Urban steam and cooling network
Scope 3 - in tCO2-eq
Business travels
Employee commuting
Capital goods
Purchased goods and services
Waste Electrical and Electronic Equipment
% of sites with certification(2)
% of sites with a recycling facilities (ordinary waste)(2)
Weight of Waste Electrical and Electronic Equipment – in
metric ton
% of recycled Waste Electrical and Electronic Equipment
Leadership and Governance (Sustainability Accounting
Standards Board)
2.4.1 Digital responsibility
Millions of learners using or having used one or more
technologies(3)
2.6 Business ethics and Vigilance plan
Business ethics
% of employees trained
Anti-corruption
% of employees trained
2020
Workforce
in-scope(1)
Values
Workforce
in-scope(1)
2019
Values
Workforce
in-scope(1)
2018
Values
483,625
551,656
511,950
16,842
16,842
16,842
16,842
16,842
4,629
978
210
392
3,049
15,331
14,835
43.9%
14,144
14,144
14,144
14,144
14,144
5,403
825
0
315
4,263
17,576
17,034
44.2%
12,895
12,895
12,895
12,895
7,501
652
0
2,340
4,509
20,353
12,895 19,507
-
-
846
16,842
497
14,144
542
12,895
19,719
19,709
19,555
19,555
16,842
16,842
16,842
16,842
16,842
134,895
150,951
130,972
18,132
12,181
26,982
77,601
0
53.3%
88.3%
16,323
16,535
16,441
16,441
-
14,144
14,144
34,410
27,199
21,639
67,703
-
52.9%
84.3%
15,350 31,993
10,836 26,031
15,021 21,470
15,021 51,478
-
-
12,895
12,895
52.2%
76.1%
18.4
99.9%
14,144
14,144
38.9
99.3%
12,895
23.9
12,895
93.6%
-
10.6
-
8.6
-
7.6
16,746
98.4%
16,684
97.5%
15,618
95.1%
16,746
97.7%
16,684
96.1%
15,618
90.5%
(1) The scope refers to total headcount excluding companies or countries as detailed in paragraph “2.8 Reporting methodology”.
(2) Percentage calculated based on our 60 main sites.
(3) Number of learners using or having used one or more of our technologies in an initial or lifelong training context.
76
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Social, societal and environmental responsibility
Méthodologie de reporting
2
2.8 Reporting Methodology
is summarized
The methodology of our social, societal and environmental
reporting
in the “Social, societal and
environmental Reporting Protocol”, which defines the
methodology for collecting and calculating information and the
scope for collecting data. To make the reporting process more
reliable, this internal protocol guide includes definitions and
rules for calculating each indicator and 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.
The environmental
includes Dassault
reporting scope
Systèmes SE and all the companies in respect of which it has
a shareholding exceeding 50%. However, for some indicators,
the scope of coverage may be more limited, in particular are
excluded from the environmental reporting the companies
acquired during the period. The reporting covers three large
geographical regions in which we operate, being specified
that Russia is included in the Europe zone. The indicators
were selected from the mapping of social, societal and
environmental risks.
2.8.1 Methodology for social and societal reporting
Data related to employees is calculated on the basis of “full-
time equivalents”, which correspond to the proportion of
“hours worked per standard full-time work hours” and which
were jointly defined and shared by both Human Resources
and Finance teams.
In 2020, the indicators were based on the following:
} the number of employees or workforce refers to the
number of employees, including permanent and temporary
(apprenticeship included);
} data related to new joiners and departures is also determined
using this rule; the data is extracted from HR and financial
management software applications, both of which are
deployed in all Dassault Systèmes’ entities;
} data relating to managers includes all managers when
referring to employees with management responsibilities
and refer to 74.6% of managers when referring to People
Managers;
} data relating to paragraph 2.3.2 “Attracting talented
individuals” as well as data related to job offers filled with
internal candidates (see paragraphs 2.3.3 “Developing
knowledge and know-how”) covers all Dassault Systèmes’
entities except Centric Software, Outscale, DISTENE,
PROXEM, Medidata and NuoDB. The scope represents
84.6% of the workforce. The recruitment of employees
starting their professional career refers to the recruitment of
employees having a professional experience up to 5 years;
} data
to
relating
certification and
training hours
(see paragraphs 2.3.3 “Developing knowledge and know-
how” and 2.3.4 “Developing employee engagement”)
covers Dassault Systèmes’ workforce as of December 31,
2020, excluding Centric Software, Outscale, DISTENE,
PROXEM, Medidata and NuoDB, calculated on the basis of
number of employees. The scope represents 84.6% of the
workforce. For the calculation of the training hours, hours
included are related to classroom, virtual or face-to-face
training sessions, interactive distance learning meetings
lasting at least 30 minutes and eLearning modules lasting
more than 15 minutes. This new methodology, defined in
2020, has been applied to the number of training hours
delivered in 2019 and published in this document to allow
comparability of information;
} data relating to training on personal data protection
(see paragraph 2.4.1 “Digital responsibility”) covers
Dassault Systèmes’ workforce on permanent contracts,
calculated on the basis of number of employees, excluding
Centric Software, Outscale, DISTENE, PROXEM, Medidata
and NuoDB. The scope represents 84.6% of the workforce;
} figures presented in section 2.3.4 “Developing employee
engagement”, in section related to work environment,
are based on the survey conducted by Great Place To
Work. The scope includes the Company’s employees on
permanent contracts as of September 1, 2020, excluding
Centric Software, Outscale, PROXEM and NuoDB. In 2020,
this survey covers 166 physical sites, 140 of which obtained
a satisfaction rate concerning the working environment;
} absenteeism data includes absences due to illness as well
as those resulting from an accident at work and exclude
absences related to maternity and paternity as well as
other types of absence of an exceptional nature. Data
relating to absenteeism and the number of work-related
accidents are calculated on the number of employees in
77
DASSAULT SYSTÈMES ANNUAL REPORT 20202 2 Social, societal and environmental responsibility
Méthodologie de reporting
countries with more than 150 employees, namely France,
Germany, the United Kingdom, the Netherlands, the United
States, Canada, Japan, Malaysia, China, South Korea, India,
Australia, Poland and Italy, excluding Centric Software,
DISTENE, PROXEM, Medidata and NuoDB. This scope
represents 80.2% of Dassault Systèmes’ workforce in 2020
versus 81.4% in 2019;
} attrition rate is calculated by taking into account only
employee-initiated leaves for employees under permanent
contracts, compared to the monthly average for employees
under permanent contracts;
} data related to commitment to preserve jobs in 2020 are
calculated by comparing headcount on March 31 and on
December 31, 2020 and covers all Dassault Systèmes’
companies including newly acquired companies during this
period (PROXEM and NuoDB);
} data related to length of services is calculated on the basis
of the total number of months of length of services divided
by the total number of employees regardless of the time
worked. These data cover all Dassault Systèmes’ employees;
} data relating to paragraph 2.4.1 “Digital Responsibility”,
in the section “Preparing the Workforce of the Future”, is
estimated by taking into account the number of our main
academic licenses to which we apply a coefficient of number
of users resulting from our experience and exchanges with
our customers. The data represents the cumulative number
of learners’ year after year and are derived from our financial
management software;
} data relating to paragraphs 2.3.5 “Preserving health and
safety” and 2.4 “Societal responsibility” comes from
additional interviews conducted within Dassault Systèmes;
} the data in section 2.6 “Business Ethics and Vigilance Plan”
pertaining to policies on business ethics, fighting corruption,
the Company’s Social Responsibility principles and
commitments ensuring human rights and data pertaining
to the Vigilance Plan are provided by the Business Ethics
and Compliance department. Data related to mandatory
trainings covers Dassault Systèmes’ workforce on
permanent contracts, calculated on the basis of number of
employees, excluding Centric Software, Outscale, DISTENE,
PROXEM, Medidata and NuoDB employees. The scope
represents 84.6% of the workforce.
2.8.2 Methodology for environmental reporting
Methodology and scope of environmental reporting
For the scope of environmental reporting as well as for
calculating carbon intensities, data related to employees
is calculated on the basis of “full-time equivalents”, which
correspond to the proportion of “hours worked per standard
full-time work hours” and which were jointly defined and
shared by both Human Resources and Finance teams.
The environmental reporting scope fits to the published
indicators. Most of our environmental indicators are calculated
on the basis of the physical sites’ operating data: buildings’
energy consumption, quantities of waste produced, etc.
Conversely, greenhouse gas emissions from business travel
are measured through the tracking of purchases of transport
services (train and airline tickets, car rentals, etc.) by each of
Dassault Systèmes’ legal entities.
These characteristics explain the co-existence of two reporting
scopes for environmental data:
} for
indicators relating to energy consumption, total
greenhouse gas emissions scope 1 and 2, general waste
treatment, waste electrical and electronic equipment and
offices certification, the data presented in the environmental
report concerns the impacts measured at Dassault Systèmes’
main sites. For these indicators, the environmental reporting
scope covers the sites that have at least 50 employees. In
78
2020, the reporting scope thus covers 85;1% of Dassault
Systèmes’ employees versus 73.1% in 2019;
} for greenhouse gas emissions
in Dassault
Systèmes’ scope 3, the data presented in the environmental
reporting covers greenhouse gas emissions as follows:
included
} for indicators relating to the use of sold solutions, the data
presented covers emissions relating to all active licenses
as of January 1, 2021, covering all available solutions and
resulting from financial reporting tools,
} for indicators relating to the purchase of goods and
services and capital goods, the data presented covers
emissions relating to all annual invoices in euros recorded
between January 1 and December 31, 2020. The scope
covers 98.8% of the Company’s employees versus 84.9%
in 2019;
} for
indicators concerning business travel, the data
presented covers emissions produced by employees
at Dassault Systèmes’ main legal entities. For these
indicators, the data presented in the environmental report
covers the emissions produced by the employees of legal
entities comprising a site with at least 50 employees.
In 2020, the reporting scope thus covers 99.7% of
Dassault Systèmes’ employees versus 84.3% in 2019,
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Social, societal and environmental responsibility
Méthodologie de reporting
2
} for indicators relating to employee commuting, the
data presented covers the emissions relating to daily
commuting by employees of all
legal entities by
estimating the distances travelled between the declared
personal address and their workplace. In 2020, these
estimates cover a worldwide scope representing 99.6%
of Dassault Systèmes’ employees versus 85.4% in 2019.
Our environmental reporting may evolve as part of our
ongoing improvement process, or to take account of changes
in applicable regulations.
Collecting and consolidating environmental data
The environmental data was collected by the Sustainability
Leaders and Sustainability Contributors and then consolidated
by our Real Estate and Facilities Management department,
based on the Social, Societal and Environmental 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), calculation of indicators
and an increase in the frequency of information collection
from annual to quarterly.
The indicators relating to energy consumption and greenhouse
gas emissions as well as waste electrical and electronic
equipment are collected quarterly by the Sustainability
Leaders and Sustainability Contributors and are reviewed
and reported quarterly by our Real Estate and Facilities
Management department.
Indicators for the treatment of common waste and other
greenhouse gas emissions are collected annually by the
Sustainability Leaders and Sustainability Contributors.
Limitations on environmental reporting
In certain cases, the information produced cannot be based
on actual consumption, for example, for certain foreign
subsidiaries that represent low contribution or for sites where
some expenses are included in the rent. In these cases, the
Social, Societal and Environmental Reporting Protocol specifies
the procedure to follow in order to make the estimations
required.
Regarding waste treatment, collections are handled for most
subsidiaries by local government, which does not provide any
information on collected waste. It is therefore not possible to
provide any information on the amount of waste generated.
We have nevertheless queried all of our subsidiaries included
in the 2020 reporting scope, as to whether they sorted
their waste. Dassault Systèmes produces information on the
percentage of sites that perform this type of sorting, not on
the quantities of waste.
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DASSAULT SYSTÈMES ANNUAL REPORT 20202 2 Social, societal and environmental responsibility
Independent verifier’s report on Consolidated Non- financial Statement Presented in the management report
2.9
Independent verifier’s report on Consolidated
Non- financial Statement Presented in the
management report
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 General Assembly,
In our quality as an independent verifier, accredited by the COFRAC under the number n° 3-1681 (scope of accreditation available
on the website www.cofrac.fr), and as a member of the network of one of the statutory auditors of your entity (hereafter “entity”),
we present our report on the consolidated non-financial statement established for the year ended on the 31 December 2020
(hereafter referred to as the “Statement”), included in the management report pursuant to the requirements of articles L. 225
102-1, R. 225-105 and R. 225-105-1 of the French Commercial Code (Code de commerce).
The entity’s responsibility
The Board of Directors is responsible for preparing the Statement, including a presentation of the business model, a description
of the principal non-financial risks, a presentation of the policies implemented considering those risks and the outcomes of said
policies, including key performance indicators.
The Statement has been prepared in accordance with the entity’s procedures (hereinafter the “Guidelines”), the main elements of
which are presented in the Statement.
Independence and quality control
Our independence is defined by the requirements of article L. 822-11-3 of the French Commercial Code and the French Code of
Ethics (Code de déontologie) of our profession. In addition, we have implemented a system of quality control including documented
policies and procedures regarding compliance with applicable legal and regulatory requirements, the ethical requirements and
French professional guidance.
Responsibility of the independent third party
On the basis of our work, our responsibility is to provide a report expressing a limited assurance conclusion on:
} the compliance of the Statement with the requirements of article R. 225-105 of the French Commercial Code;
} the fairness of the information provided in accordance with article R. 225 105 I, 3° and II of the French Commercial Code, i.e.,
the outcomes, including key performance indicators, and the measures implemented considering the principal risks (hereinafter
the “Information”).
However, it is not our responsibility to comment on the entity’s compliance with other applicable legal and regulatory requirements,
in particular the French duty of care law and anti-corruption and tax avoidance legislation nor on the compliance of products and
services with the applicable regulations.
Nature and scope of the work
The work described below was performed in accordance with the provisions of articles A. 225-1 et seq. of the French Commercial
Code, as well as with the professional guidance of the French Institute of Statutory Auditors (“CNCC”) applicable to such
engagements and with ISAE 3000(1).
} we obtained an understanding of all the consolidated entities’ activities and the description of the principal risks associated;
} we assessed the suitability of the criteria of the Guidelines with respect to their relevance, completeness, reliability, neutrality
and understandability, with due consideration of industry best practices, where appropriate;
} we verified that the Statement includes each category of social and environmental information set out in article L. 225 102
1 III of the French Commercial Code as well as information set out in the second paragraph of article L. 22-10-36 regarding
compliance with human rights and anti-corruption and tax avoidance legislation;
(1) ISAE 3000 - Assurance engagements other than audits or reviews of historical financial information
80
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Social, societal and environmental responsibility
Independent verifier’s report on Consolidated Non- financial Statement Presented in the management report
2
} we verified that the Statement provides the information required under article R. 225-105 II of the French Commercial Code,
where relevant with respect to the principal risks, and includes, where applicable, an explanation for the absence of the
information required under article L. 225-102-1 III, paragraph 2 of the French Commercial Code;
} we verified that the Statement presents the business model and a description of principal risks associated with all the consolidated
entities’ activities, including where relevant and proportionate, the risks associated with their business relationships, their
products or services, as well as its their policies, measures and the outcomes thereof, including key performance indicators
associated to the principal risks;
} we referred to documentary sources and conducted interviews to:
} assess the process used to identify and confirm the principal risks as well as the consistency of the outcomes, including the
key performance indicators used, with respect to the principal risks and the policies presented, and
} corroborate the qualitative information (measures and outcomes) that we considered to be the most important presented in
Appendix 1; concerning certain risks (digital responsibility, facilitating open innovation and collective intelligence, retaining
our talents, developing knowledge and know-how, developing employee commitment), our work was carried out on the
consolidating entity, for the others risks, our work was carried out on the consolidating entity and on a selection of entities:
DS Deutschland GmbH, DS Americas Corp.;
} we verified that the Statement covers the scope of consolidation, i.e. all the consolidated entities in accordance with
article L. 233-16 of the French Commercial Code within the limitations set out in the Statement;
} we obtained an understanding of internal control and risk management procedures the entity has put in place and assessed the
data collection process to ensure the completeness and fairness of the Information;
} for the key performance indicators and other quantitative outcomes that we considered to be the most important presented in
Appendix 1, we implemented:
} analytical procedures to verify the proper consolidation of the data collected and the consistency of any changes in those
data,
} tests of details, using sampling techniques, in order to verify the proper application of the definitions and procedures and
reconcile the data with the supporting documents. This work was carried out on a selection of contributing entities and covers
between 16% and 19% of the consolidated data relating to the key performance indicators and outcomes selected for these
tests (respectively the headcount and greenhouse gas emissions on Scope 1 and Scope 2);
} we assessed the overall consistency of the Statement based on our knowledge of all the consolidated entities.
We believe that the work carried out, based on our professional judgement, is sufficient to provide a basis for our limited assurance
conclusion; a higher level of assurance would have required us to carry out more extensive procedures.
Means and resources
Our verification work mobilized the skills of five people and took place between November 2020 and February 2021 on a total
duration of intervention of about fourteen weeks.
We conducted eleven interviews with the persons responsible for the preparation of the Statement including in particular the
Human Resources and Information Systems Management, Real Estate and Accommodation Management, Compliance, Learning
Experience and Purchasing.
Conclusion
Based on the procedures performed, nothing has come to our attention that causes us to believe that the consolidated non-
financial statement is not presented in accordance with the applicable regulatory requirements and that the Information, taken
as a whole, is not presented fairly in accordance with the Guidelines, in all material respects.
Paris-La Défense, the 18th March 2021
French original signed by
Independent third party
EY & Associés,
Jean-François Bélorgey
Partner
Éric Mugnier
Partner, Sustainable Development
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DASSAULT SYSTÈMES ANNUAL REPORT 20202 2 Social, societal and environmental responsibility
Independent verifier’s report on Consolidated Non- financial Statement Presented in the management report
Appendix 1: The most important information
Social Information
Quantitative Information (including key performance indicators)
Qualitative Information (actions or results)
Rate of job offers filled by cooptation (%)
Conversion rate of trainees and apprentices (%)
Rate of job offers requiring at least 3 years of experience filled by internal
applications (%)
Absenteeism rate (%)
Number of accidents in the workplace
The results of the policy in terms of attracting and retaining
talent, developing employee commitment, and developing
knowledge and know-how
The results of the gender equality policy
The results of the policy in terms of preserving health and
safety
Environmental Information
Quantitative Information (including key performance indicators)
Carbon intensity (tCO2-eq per FTE)
Greenhouse gas emissions from operations - Scope 1 (tCO2-eq)
Greenhouse gas emissions from operations - Scope 2 (tCO2-eq)
Greenhouse gas emissions from operations - Scope 3 (tCO2-eq)
Weight of electrical and electronic waste (kg)
Share of electrical and electronic waste recycled (kg)
Qualitative Information (actions or results)
The results of the climate policy and strategy, both in terms of
solutions and operations
Quantitative Information (including key performance indicators)
Qualitative Information (actions or results)
Societal Information
The results of the digital responsibility policy, in particular on
the protection of personal data
The results of the policy on facilitating innovation and collective
intelligence
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Social, societal and environmental responsibility
Statutory Auditors’ Attestation on the information relating to the Dassault Systèmes SE’s total amount paid for sponsorship
2
2.10 Statutory Auditors’ Attestation on the
information relating to the Dassault Systèmes
SE’s total amount paid for sponsorship
This is a translation into English of a report issued in French and it is provided solely for the convenience of English-speaking
users. This attestation should be read in conjunction with and construed in accordance with French law and professional standards
applicable in France.
Statutory auditors’ attestation on the information communicated in accordance with the requirements of Article L. 225-
115 5° of the French Commercial Code (Code de commerce) relating to the total amount of payments made in compliance with
paragraphs 1 to 5 of Article 238 bis of the French Tax Code (Code général des impôts) for the year ended December 31, 2020
To the Annual General Meeting of Dassault Systèmes,
In our capacity as statutory auditors of your Company and in accordance with the requirements Article L. 225-115 5° of the
French Commercial Code (Code de commerce), we have prepared this attestation on the information relating to the total amount
of payments made in compliance with paragraphs 1 to 5 of Article 238 bis of the French Tax Code (Code général des impôts) for
the year ended December 31, 2020, contained in the attached document.
This information was prepared under your Board of Directors’ responsibility. Our role is to attest this information.
In the context of our role as statutory auditors (Commissaires aux comptes), we have audited your Company’s annual financial
statements for the year ended December 31, 2020. Our audit was conducted in accordance with professional standards applicable
in France, and was planned and performed for the purpose of forming an opinion on the annual financial statements taken as a
whole and not on any individual component of the accounts used to determine the total amount of payments made in compliance
with paragraphs 1 to 5 of Article 238 bis of the French Tax Code (Code général des impôts). Accordingly, our audit tests and
samples were not carried out with this objective and we do not express any opinion on any components of the accounts taken
individually.
We performed those procedures which we considered necessary to comply with professional guidance issued by the by the
French Institute of statutory auditors (Compagnie nationale des commissaires aux comptes). These procedures, which constitute
neither an audit nor a review, consisted in performing the necessary reconciliations between the total amount of payments made
in compliance with paragraphs 1 to 5 of Article 238 bis of the French Tax Code (Code général des impôts) and the accounting
records from which it derived, and verifying that it is consistent with the data used to prepare the annual financial statements for
the year ended December 31, 2020.
On the basis of our works, we have no matters to report on the reconciliation of the total amount of payments made in compliance
with paragraphs 1 to 5 of Article 238 bis of the French Tax Code (Code général des impôts), contained in the attached document
and amounting to €1.802.297 with the accounting records used to prepare the annual financial statements for the year ended
December 31, 2020.
This attestation shall constitute certification as accurate of the total amount of payments made in compliance with paragraphs 1
to 5 of Article 238 bis of the French Tax Code (Code général des impôts), within the meaning of Article L. 225-115 5° of the
French Commercial Code (Code de commerce).
This attestation has been prepared solely for your attention within the context described above and may not be used, distributed
or referred to for any other purpose.
Neuilly-sur-Seine and Paris-la Défense, March 18, 2021
The Statutory Auditors
French original signed by
PricewaterhouseCoopers Audit
Thierry Leroux
Ernst & Young et Autres
Nour-Eddine Zanouda
83
DASSAULT SYSTÈMES ANNUAL REPORT 20202 2 Social, societal and environmental responsibility
Statutory Auditors’ Attestation on the information relating to the Dassault Systèmes SE’s total amount paid for sponsorship
Vélizy-Villacoublay, March 18, 2021
Certification relating to the global amount
of sums paid for sponsorship on 2020
The global amount of sums paid for sponsorship, which are referred to at Article 238 bis of the General Tax Code is €1,802,297
for 2020.
The global amount giving rise to fiscal deductions in 2020, is €1,802,297.
Pascal DALOZ
Chief Operating Officer and Chief Financial Officer
84
ANNUAL REPORT 2020 DASSAULT SYSTÈMES 3
FINANCIAL REVIEW
AND PROSPECTS
3.1 Operating and Financial Review
3.1.1 Executive Overview for 2020
3.1.2 Consolidated Information: Financial Review
of 2020 Compared to 2019
3.1.3 Variability in Quarterly Financial Results
3.1.4 Capital Resources
86
86
95
100
101
3.2 Financial Objectives
3.3 Interim and Other Financial
Information
102
103
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DASSAULT SYSTÈMES ANNUAL REPORT 2020CONTENTS 3 Financial review and prospects
Operating and Financial Review
3.1 Operating and Financial Review
The executive overview in paragraph 3.1.1. “Executive
Overview for 2020” highlights selected aspects of our business
during 2020. The Executive Overview of 2020, including
the Summary Overview, Summary of our Non-IFRS Results,
Definitions of Key Metrics We Use, Supplemental non-IFRS
Financial Information, and the more detailed discussion
that follows in paragraph 3.1.2 “Consolidated Information:
Financial Review of 2020 compared to 2019” should be read
together with our consolidated financial statements and the
related Notes included in paragraph 4.1.1 “Consolidated
Financial Statements”.
Between the end of the 2020 fiscal year and the filing date
of this Annual Report, there was no material change in
the financial position or financial performance of Dassault
Systèmes.
3.1.1 Executive Overview for 2020
3.1.1.1
Summary Overview
(in millions of euros, except
percentages and per share data)
Total Revenue
Software Revenue
Services Revenue
Operating Margin
Diluted net earnings per share
("EPS")
IFRS
Non-IFRS
2020
2019
Change
Change in cc*
2020
2019
Change
Change in cc*
€4,452.2
€4,018.2
4,012.6
3,539.4
439.6
15.0%
478.8
20.2%
11%
13%
(8%)
(5.2)pts
12% €4,464.8
€4,055.6
15% 4,024.0
3,573.6
(7%)
440.8
30.2%
482.0
32.0%
10%
13%
(9%)
(1.8)pts
12%
14%
(7%)
€1.86
€2.34
(20%)
€3.77
€3.65
3%
5%
Software Revenue
(in millions of euros)
Americas
Europe
Asia
*
In constant currencies.
IFRS
Non-IFRS
2020
2019
Change
Change in cc*
2020
2019
Change
Change in cc*
1,527.0
1,108.7
1,482.6
1,469.7
1,003.0
961.0
38%
1%
4%
41%
1,537.6
1,140.1
2%
6%
1,483.1
1,471.6
1,003.3
961.9
35%
1%
4%
38%
2%
5%
Strategic Direction – Extending Our Ambitions
In February 2020, we unveiled our strategic direction for
the coming decades, extending our ambition from Things
to Life, reflecting our belief that we have the capabilities of
applying the knowledge and know-how we have acquired in
the non- organic world to the living world. We have reasons
to believe that we will eventually help our clients create the
complete virtual twin of humans, just as we did for airplanes,
vehicles or buildings. This opens up new perspectives for the
Healthcare industry, transforming how people are cured and
helping them live a better life. To support our new multi-decade
ambition, we will focus on developing our leadership in Life
Sciences & Healthcare, continuing to extend our investments
and leadership in Manufacturing Industries and advancing
forward in the promising Infrastructure & Cities sector.
New Product Line Revenue Reporting
In conjunction with our new ambitions and reflecting the
integration of Medidata, which we acquired in October 2019,
line financial
in 2020 a new product
introduced
we
reporting, with
Innovation software revenue,
Industrial
Life Sciences software revenue and Mainstream Innovation
software revenue.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial review and prospects
Operating and Financial Review
3
Our new product line revenue reporting, with our three product
lines encompassing our brands, is as follows:
our data science initiatives. Our R&D supports our clients’
next generation of innovation;
} we put in place a saving plan to enable us to mitigate the
impact of the pandemic, aiming at a stable non-IFRS EPS in
2020 compared to 2019;
} in October 2019, Medidata represented our
largest
acquisition ever and we were very pleased to report its
strong 2020 performance: Medidata expanded its customer
base by 16%, signed record multi-year deals and renewals
for RAVE EDC in clinical trials and experienced significant
traction with Patient Cloud. Both its revenue growth and
operating margin expansion are in line with the acquisition
business plan;
} in Mainstream Innovation, our levers of growth have
expanded with SOLIDWORKS, 3DEXPERIENCE WORKS and
CENTRIC PLM;
} in Industrial Innovation, we signed a number of important
transactions, demonstrating our market leadership, and we
delivered a significant number of 3DEXPERIENCE go lives
during 2020;
} recurring software revenue increased 26.2% to €3.21 billion,
representing 80% of total software revenue;
} IFRS EPS was €1.86 and non-IFRS EPS reached €3.77, up
3.3% as reported and 5% in constant currencies over 2019;
} cash flow from operations increased 4.7% to €1.24 billion.
Group Revenue by Type
IFRS total revenue was €4.45 billion in 2020, representing an
increase of 10.8% as reported and 12% in constant currencies.
IFRS software revenue increased 13.4% as reported, and 15%
in constant currencies to €4.01 billion. IFRS software revenue
growth reflected recurring software revenue growth of 28% in
constant currencies with the addition of Medidata and organic
growth of 7% in constant currencies, while licenses and other
software revenue decreased 18% in constant currencies on
COVID-19 related demand erosion.
IFRS recurring software revenue represented 80% of total
software and totaled €3.21 billion for 2020.
} Industrial Innovation software revenue is comprised of our
CATIA, ENOVIA, SIMULIA, DELMIA, GEOVIA, NETVIBES, and
3DEXCITE brands. In 2020, Netvibes, Exalead and PROXEM
solutions were all gathered into one single NETVIBES
brand. For the year ended December 31, 2020, Industrial
Innovation software revenue totaled €2.29 billion and
represented 57% of total IFRS software revenue;
} Life Sciences software revenue
is comprised of our
MEDIDATA and BIOVIA brands. Under this new presentation,
ENOVIA Life Sciences Compliance and Quality Management
is included in Life Sciences software revenue. For the year
ended December 31, 2020, Life Sciences software revenue
totaled €787.3 million and represented 20% of total IFRS
software revenue;
} Mainstream Innovation software revenue is comprised
of our SOLIDWORKS brand as well as CENTRIC PLM,
3DVIA and related revenue from our new 3DEXPERIENCE
WORKS software products family. For the year ended
December 31, 2020, Mainstream Innovation software
revenue totaled €937.6 million and accounted for 23% of
total IFRS software revenue.
New Industry Sectors
In addition to our new product line reporting, we have changed
our Industry groupings in 2020 to reflect our increased focus
on three large economic segments: Manufacturing Industries
(Transportation & Mobility; Aerospace & Defense; Marine &
Offshore; Industrial Equipment; High Tech; Home & Lifestyle;
Consumer Packaged Goods & Retail and part of Business
Services); Life Sciences & Healthcare (Life Sciences); and
Infrastructure & Cities (Energy & Materials; Construction, Cities
& Territories; Business Services).
2020 Review in Brief
The global pandemic, which unfolded over the course of
the first quarter of 2020, underscored the power of our
3DEXPERIENCE platform to run our business from anywhere
and to engage digitally with our customers as well as our
partners. While our business has not been immune, our
strategic assets: our brands,
industries and global/local
orientation combined with our financial model have enabled
us to demonstrate significant resilience in 2020:
} as part of our purpose, we committed to maintaining our
global people resources and we did;
} we continued to invest in expanding our R&D teams,
internally and externally, including critical resources around
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Software Revenue by Region
Software revenue was well-balanced on a geographical basis,
with Europe, Americas and Asia representing 37%, 38% and
25% of software revenue, respectively. As a demonstration of
our successful geographical diversification strategy, Asia now
joins the Americas and Europe regions reaching the 1 billion
euro milestone for annual software revenue in 2020.
} in the Americas, IFRS software revenue increased 37.7% as
reported and 41% in constant currencies, led by the addition
of Medidata with a large proportion of its software revenue
in North America and growth in Aerospace & Defense;
} in Asia, IFRS software revenue increased 4.4% as reported
and 6% in constant currencies: China showed a strong
recurring revenue performance in addition to Medidata;
Japan showed a good resilience and Asia Pacific South
software
large deal activity.
These results were offset in part by weaknesses in India
and, to a lesser extent in South Korea;
increased on
revenue
} in Europe, IFRS software revenue increased 0.9% as reported
and 2% in constant currencies, with double digit growth in
Northern Europe, a good resistance in Western and Central
Europe and weakness in Southern Europe;
} non-IFRS recurring software revenue grew year over year
across the three regions with all geos performing well in line
with business goals;
} on an organic basis and in constant currencies, IFRS
software revenue increased by 6% in the Americas, and was
lower by 1% in Asia and by 4% in Europe.
Software Revenue by Industry sector
On a non-IFRS basis and in constant currencies, Manufacturing
Industries software revenue decreased 3% in total and
represented 69% of total software.
Transportation & Mobility strengthened in the second half of
2020 over the first half resulting in a single digit decrease for
the full year.
Aerospace & Defense, High-Tech and Home & Lifestyle grew
year over year in 2020.
Reflecting the addition of Medidata, Life Sciences & Healthcare
software revenue increased significantly and represented 21%
of total non-IFRS software revenue in 2020.
88
Infrastructure & Cities software revenue increased 2% in
constant currencies and represented 10% of total non-IFRS
software revenue.
Ranked by total software, our top five industries in 2020
were Transportation & Mobility (24%), Life Sciences (21%,
reflecting the addition of Medidata), Industrial Equipment
(18%), Aerospace & Defense (13%) and High Tech (8%). In
2019, our top five industries were Transportation & Mobility
(29%), Industrial Equipment (16%), Aerospace & Defense
(14%), High Tech (9%) and Life Sciences (8%).
3DEXPERIENCE Software Revenue
revenue
In 2020, 3DEXPERIENCE non-IFRS software
represented 27% (27%
in 2019) of related non-IFRS
software revenue and was driven by business in Aerospace
& Defense, Transportation & Mobility, High Tech, Energy &
Materials, Industrial Equipment and Marine & Offshore. The
3DEXPERIENCE non-IFRS software revenue decreased 4% in
constant currencies for the full year, with a strong recovery in
the second half over the first half of 2020.
Acquisitions and Investments
While our primary focus in 2020 was to ensure a successful
first year post-acquisition of Medidata we continued to invest
in the specific domains:
} with respect to Data Science, we acquired PROXEM in
July 2020, bringing strong artificial intelligence capabilities
to complement our NETVIBES brand;
} in December 2020, we completed the acquisition of NuoDB,
a cloud-native distributed SQL database leader, where we
previously held a minority investment. NuoDB’s technology
has been a part of our cloud infrastructure and data science
strategy for a number of years. We consider their technology
as critical and unique on the market.
In January 2021, we took an equity position in AVSimulation,
a provider of ultra-realistic virtual environments for virtual
driving simulation. This will enrich our offering towards
assisted driving certification, a critical domain in view of
enhanced regulations.
Cash Flow and Balance Sheet Highlights
Net operating cash flow grew by 4.7% from €1,186.1 billion
in 2019 to €1,241.3 billion for 2020. During 2020, cash
obtained from operations was used principally for repayment
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial review and prospects
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3
of short- and long-term debt of €400.9 million (including in
particular prepaid debt related to the Medidata acquisition);
distribution of cash dividends of €182.5 million; repurchase of
shares in the amount of €166.2 million; capital expenditures,
net of €127.0 million, payment for lease obligations of
€93.3 million and payment for acquisitions of €89.5 million
(net of cash acquired). We also received cash from exercise of
stock options of €87.7 million.
Our deferred revenue increased 14% on an organic basis
and in constant currencies, and totaled €1.17 billion on
December 31, 2020. With recurring software revenue of
€3.21 billion in 2020, and representing 80% of our total
software revenue, we have a significant level of visibility on
our software revenue growth on a full year basis.
Our net financial cash/(debt) positioned totaled €(2.04) billion
on December 31, 2020, compared to €(2.66) billion on
December 31, 2019, with cash, cash equivalents and
short- term
investments of €2.15 billion and debt via
borrowings of €4.19 billion.
As of December 31, 2020, Dassault Systèmes’ Adjusted Net
Debt/IFRS EBITDAO ratio stood at 1.8 compared to 2.5 in 2019,
based on an adjusted net debt (including the lease liabilities
reported under IFRS 16) of €2,684.8 million (€3,351.4 million
in 2019) and an IFRS EBITDAO (IFRS EBITDA adjusted for
share-based payments) of €1,452.5 million (€1,325.4 million
in 2019).
IFRS EBITDAO and Adjusted net debt are computed as follows for 2019 and 2020:
(in millions of euros)
Reported Financial Net Debt
Operating leases liabilities (IFRS 16)
Adjusted Net Debt
Operating income (IFRS)
Amortization and impairment on intangible assets
Amortization and depreciation of tangible assets and right of use (IFRS 16)
Reported EBITDA
Share-based payments, excluding related social charges
EBITDAO
Adjusted Net Debt/EBITDAO
Year ended December 31,
2020
2,041.4
643.3
2019
2,655.6
695.8
€2,684.8
€3,351.4
669.7
414.9
189.6
812.8
253.8
142.2
€1,274.2
€1,208.9
178.3
116.5
€1,452.5
€1,325.4
1.8 x
2.5 x
2021 Financial Objectives
For a discussion of our 2021 business outlook, see
paragraph 3.2 “Financial Objectives”. For further information
regarding risks facing the Group, see paragraph 1.9.1 “Risks
Related to the Dassault Systèmes’ Business”.
Summary of our Non-IFRS Financial Results
In discussing and analyzing our results of operations, our
Management considers supplemental non-IFRS financial
information: (i) non-IFRS revenue data excludes the effect
of adjusting the carrying value of acquired companies’
contract liabilities (deferred revenue); and non-IFRS expense
data excludes (ii) the amortization of acquired intangibles
assets and of tangible assets revaluation, (iii) share-based
compensation expense and related social charges, (iv) lease
incentives of acquired companies, (v) and other operating
income and expense, net, including acquisition, integration
and restructuring expenses, and impairment of goodwill and
acquired intangible assets (vi) certain one-time items included
in financial income (loss), net, and (vii) 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 our consolidated
financial statements and the Notes thereto is presented
below under paragraph 3.1.1.2 “Supplemental non-IFRS
Financial Information”.
Our Management uses the supplemental non-IFRS financial
information, together with the IFRS financial information, for
financial planning and analysis, evaluation of our operating
performance, mergers and acquisition analysis and valuation,
operational decision-making and for setting financial objectives
for future periods. Compensation of our senior management is
based in part on the performance of our business measured
with the supplemental non-IFRS information. We believe that
the supplemental non-IFRS data also provides meaningful
information to investors and financial analysts who use the
information for comparing the Group’s operating performance
to its historical trends and to other companies in the software
industry, as well as for valuation purposes.
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} Total non-IFRS Revenue: Total non-IFRS revenue increased
12% to €4.46 billion on software growth of 14% offset
in part by a decrease of 7% in services revenue. Software
revenue represented 90% of total revenue and services 10%.
Financial results reflected the inclusion of Medidata. for
twelve months in 2020 and two months in 2019 following
the completion of its acquisition on October 28, 2019. On
an organic basis and in constant currencies, non-IFRS total
revenue decreased 3%.
} Non-IFRS software Revenue: Non-IFRS software revenue
increased 14% in constant currencies, driven by non-IFRS
recurring software revenue growth of 27% with the addition
of Medidata and organic growth of 6%. Non-IFRS recurring
software revenue totaled €3.22 billion and represented 80%
of non-IFRS software revenue. Licenses and other software
non-IFRS revenue decreased 18% in constant currencies.
} Non-IFRS operating income and margin: On a non-IFRS
basis, operating income increased 4% to €1.35 billion.
The non-IFRS operating margin was 30.2% compared to
32.0% for 2019, largely reflecting acquisition dilution of
about 210 basis points offset in part by underlying organic
improvement of about 40 basis points.
} Non-IFRS net income per share: Non-IFRS diluted net
income per share totaled €3.77, increasing 3% as reported
or 5% in constant currencies.
Definitions of Key Metrics We Use
Information in Constant Currencies
We have followed a long-standing policy of measuring our
revenue performance and setting our revenue objectives
exclusive of currency in order to measure in a transparent
manner the underlying level of improvement in our total
revenue and software revenue by type, industry, region and
product lines. We believe it is helpful to evaluate our growth
exclusive of currency impacts, particularly to help understand
revenue trends
in our business. Therefore, we provide
percentage increases or decreases in our revenue and EPS
(in both IFRS as well as non-IFRS) to eliminate the effect of
changes in currency values, particularly the U.S. dollar and the
Japanese yen, relative to the euro. When trend information is
expressed by us “in constant currencies”, the results of the
“prior” period have first been recalculated using the average
exchange rates of the comparable period in the current year,
and then compared with the results of the comparable period
in the current year.
While constant currencies calculations are not considered to be
an IFRS measure, we do believe these measures are critical to
understanding our global revenue results and to compare with
many of our competitors who report their financial results in
U.S. dollars. Therefore, we are including this calculation for
comparing IFRS revenue figures for comparable periods as well
as for comparing non-IFRS revenue figures for comparable
periods. All constant currencies information is provided on an
approximate basis. Unless otherwise indicated, the impact of
exchange rate fluctuations is approximately the same for both
the Group’s IFRS and supplemental non-IFRS financial data.
Information on Growth excluding acquisitions
(“organic growth”)
In addition to financial indicators on the entire Group’s scope,
Dassault Systèmes provides growth excluding acquisitions
effect, also named organic growth. The related growth rate
was determined by restating the scope of activity as follows:
for entities entering the consolidation scope in the current
year, subtracting the contribution of the acquisition from
the aggregates of the current year, and for entities entering
the consolidation scope in the previous year, subtracting the
contribution of the acquisition from January 1st of the current
year, until the last day of the month of the current year when
the acquisition was made the previous year
Information on Industrial Sectors
Dassault Systèmes’ Industries develop Solution Experiences,
industry-focused offerings that deliver specific value to
companies and users in a particular industry. We serve eleven
industries structured into three sectors:
} Manufacturing Sector: Transportation & Mobility; Aerospace
& Defense; Marine & Offshore; Industrial Equipment; High-
Tech; Home & Lifestyle; Consumer Packaged Goods & Retail
and a portion of Business Services;
} Life Sciences & Healthcare Sector: Life Sciences;
} Infrastructure & Cities Sector: Energy & Materials;
Construction, Cities and Territories; Business Services.
Information on Product Lines
Commencing with the first quarter of 2020 and as previously
announced, we introduced a new presentation of our product
lines to reflect our broader ambitions. Our new product line
financial reporting includes: 1) Industrial Innovation software
revenue, comprised of our CATIA, ENOVIA, SIMULIA, DELMIA,
GEOVIA, NETVIBES, and 3DEXCITE brands. In 2020, Netvibes,
Exalead and PROXEM solutions were all gathered into one
single NETVIBES brand; 2) Life Sciences software revenue,
comprised of our MEDIDATA and BIOVIA brands; and 3)
Mainstream Innovation software revenue, comprised of our
SOLIDWORKS brand as well as CENTRIC PLM, 3DVIA and
related revenue from our new 3DEXPERIENCE WORKS family.
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3DEXPERIENCE Licenses and Software Contribution
To measure the progressive penetration of 3DEXPERIENCE
software, we utilize the following ratios: a) for Licenses revenue,
we calculate the percentage contribution by comparing total
3DEXPERIENCE Licenses revenue to Licenses revenue for all
product lines except SOLIDWORKS and acquisitions (“related
Licenses revenue”); and, b) for software revenue, the Group
calculates the percentage contribution by comparing total
3DEXPERIENCE software revenue to software revenue for all
product lines except SOLIDWORKS and acquisitions (“related
software revenue”).
Adjusted Net Debt
The Adjusted Net Debt corresponds to the net financial debt
position (borrowings net of cash, cash equivalent and short-
term investments) adjusted of IFRS 16 lease liabilities.
IFRS EBITDAO (Earnings Before Interest, Taxes and
Amortization Operating)
The IFRS EBITDAO corresponds to the IFRS operating income
adjusted of amortization, depreciation and
impairment
expense of intangible and tangible assets and of non-cash
share-based payment expense (excluding related social
charges).
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 Group’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 our results of operations,
we supplement our 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: contract liabilities (deferred revenue) adjustments
for acquired companies, amortization of acquired intangibles
and of tangible assets revaluation, lease incentives of acquired
companies, share-based compensation expense and related
social charges, other operating income and expense, net
including acquisition, integration and restructuring expenses,
and impairment of goodwill and acquired intangible assets,
certain one-time items included in financial income (loss),
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, we believe that the supplemental
non-IFRS financial information provides a consistent basis for
period-to-period comparisons which can improve investors’
understanding of our financial performance.
Our management uses the supplemental non-IFRS financial
information, together with our IFRS financial information,
for financial planning and analysis, evaluation of our operating
performance, mergers and acquisition analysis and valuation,
operational decision-making and for setting financial objectives
for future periods. Compensation of our senior management is
based in part on the performance of our business measured
with the supplemental non-IFRS information. We believe 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:
} contract liabilities write-downs: 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 Company. As a result, in the case of a typical one-year
contract, the Company’s IFRS revenues 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 our supplemental non-IFRS financial information, we
have excluded this write-down to the carrying value of the
contract liabilities, and reflect instead the full amount of such
revenue. We believe that this non-IFRS measure of revenue
is useful to investors and management because it reflects a
level of revenue and operational results that 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;
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DASSAULT SYSTÈMES ANNUAL REPORT 20203 3 Financial review and prospects
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} amortization of acquired intangibles assets, including
amortization of acquired technology, and amortization
of acquired tangible assets revaluation arising from a
business combination: under IFRS, the cost of acquired
intangible and tangible 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 related to acquired
intangibles assets and of acquired tangible assets revaluation
arising from a business combination in order to provide a
consistent basis for comparing its historical results. Costs
related to internally developed technology are typically
expensed as 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 non- IFRS financial
information offers investors a useful basis for comparing its
historical results.
However, the acquired intangible assets and tangible assets
revaluation arising from a business combination, which
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 annual
amortization of acquired intangibles assets and tangible assets
revaluation arising from a business combination is a recurring
expense until they are fully amortized;
} share-based compensation expense and related social
charges: under IFRS, the Company is required to recognize
in its income statement all share-based compensation 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 that 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
considers
management
supplemental non-IFRS
the
information that excludes share-based compensation expense
when reviewing 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.
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;
} lease incentives of acquired companies: under IFRS, the
right-of-use on the company acquired leased assets has to
be adjusted by the buyer when the business combination
is accounted for, in order to recognize the fair value of their
future lease payments. Lease incentives received, such
as rent-free periods, are not included in the right-of-use
evaluation. Therefore, under IFRS, amortization of right-
of- use assets during the lease period does not take into
account the amortization savings related to these incentives,
which would have been recognized by the company
acquired if it continued to operate on a standalone basis.
In its supplemental non-IFRS financial information, the
Company excludes lease incentives of acquired companies
such as rent-free periods. As a result, the Company believes
that its supplemental non-IFRS financial information is useful
for investors and the Company’s management because
amortization expense and operating income presented as such
reflect the combined activities of both the Company and the
acquired company;
} other operating income and expense, net: under IFRS, the
Company has recognized certain other operating income
and expense comprised of the impact of costs incurred
in connection with the voluntary early retirement plan,
restructuring activities, gains or losses on sale of subsidiaries,
impairment of goodwill or acquired intangible assets, costs
directly related to acquisitions and costs related to site
closings and reorganization of the Company’s premises.
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.
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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;
its supplemental non-IFRS financial
} certain one-time items included in financial income (loss), net:
In
information,
the Company excludes certain one-time items included
in financial income (loss), 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.
However, these one-time items included in financial income
(loss), 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;
} certain one-time tax effects: The Company’s IFRS financial
statements reflect the impact of one-time tax effects,
such as restructurings of activities or tax remeasurement
effects, which may result in immediate adjustment of the
income tax provision.
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.
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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.
(in millions of euros, except percentages
and per share data)
2020
IFRS
Year ended December 31,
2020
Adjustment(1)
non-IFRS 2019 IFRS
Adjustment(1)
Variation
2019
non-IFRS
IFRS Non-IFRS(2)
€4,452.2
€12.6
€4,464.8 €4,018.2
€37.4
€4,055.6
11%
4,012.6
11.4
4,024.0
3,539.4
34.2
3,573.6
13%
-
11.4
807.5
3,216.5
999.6
2,539.8
-
34.2
999.6
2,574.0
(19%)
26%
10%
13%
(19%)
25%
807.5
3,205.2
80%
439.6
2,287.6
1,065.8
345.7
787.3
937.6
841.4
1,675.2
1,688.6
1,088.4
(3,782.5)
(214.1)
Total Revenue
Total revenue by activity
Software revenue
Licenses and other software
revenue
Subscription and Support revenue
Recurring portion of software
revenue
Services revenue
Total software revenue
by product line(3)
Industrial Innovation
o/w CATIA
o/w ENOVIA(4)
Life Sciences(5)
Mainstream Innovation
o/w SOLIDWORKS
Total revenue by geography
Europe
Americas
Asia
Total Operating Expenses
Share-based compensation expense
and related social charges
Amortization of acquired
intangibles assets and of tangible
assets revaluation
Lease incentives of acquired
companies
Other operating income and
expense, net
Operating Income
Operating Margin
Financial income (loss), net
Income before Income Taxes
Income tax expense
Non-controlling interest
Net Income attributable to
shareholders
Diluted Net Income Per Share(6)
1.2
0.8
0.8
-
9.9
0.6
-
0.4
11.8
0.4
667.5
214.1
80%
440.8
72%
478.8
2,288.5
1,066.6
345.7
797.3
938.3
841.4
2,391.6
1,100.2
368.7
236.9
910.9
823.5
1,675.6
1,700.4
1,088.8
(3,115.0)
1,671.8
1,298.6
1,047.7
(3,205.4)
(168.5)
(394.5)
394.5
(2.9)
(56.0)
669.7
15.0%
(23.4)
646.3
(160.8)
5.5
€491.0
€1.86
2.9
56.0
680.1
1.1
681.2
(172.0)
(5.5)
€503.7
€1.91
-
-
-
-
1,349.8
30.2%
(22.3)
1,327.5
(332.8)
-
(0.5)
(34.1)
812.8
20.2%
3.1
815.9
(209.6)
9.0
€994.7
€3.77
€615.3
€2.34
3.2
-
-
-
27.3
6.9
-
2.5
34.0
0.9
447.1
168.5
0.5
34.1
484.5
0.1
484.7
(134.4)
(5.9)
€344.3
€1.31
(8%)
(9%)
(4%)
(3%)
(6%)
232%
3%
2%
0%
30%
4%
18%
(4%)
(3%)
(6%)
202%
2%
2%
0%
28%
4%
13%
72%
482.0
2,391.6
1,100.2
368.7
264.2
917.8
823.5
1,674.3
1,332.7
1,048.6
(2,758.3)
-
-
-
-
1,297.4
32.0%
3.2
1,300.6
(344.0)
3.0
€959.6
€3.65
(18%)
N/A
(21%)
(23%)
(39%)
(20%)
(20%)
4%
N/A
2%
(3%)
(100%)
4%
3%
(244.0)
244.0
(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 assets and of tangible assets revaluation, share-based compensation expense and
related social charges, and the effect of adjusting the lease incentives of acquired companies, as detailed below, and other operating income and expense, net including acquisition,
integration and restructuring expenses, and impairment of goodwill and acquired intangible assets (iii) adjustments to IFRS financial income (loss), net reflect the exclusion of
certain one-time items included in financial income (loss), 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, certain one-time tax effects and the income tax effect of the non-IFRS adjustments.
(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) Commencing with the first quarter of 2020, the Group introduced a new presentation of revenue by product lines as presented in paragraph 3.1.1”Executive Overview for 2020” –
“New Product Line Revenue Reporting”. Under the new presentation, ENOVIA Life Sciences Compliance and Quality Management is included in Life Sciences software revenue.
(4) Excluding ENOVIA Life Sciences Compliance and Quality Management in 2020 (FY 2019: €15.0 million)
(5) Including ENOVIA Life Sciences Compliance and Quality Management in 2020 (FY 2019: €15.0 million)
(6) Based on a weighted average of 264.2 million diluted shares for 2020 and 263.2 million diluted shares for 2019.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial review and prospects
Operating and Financial Review
3
(in millions of euros)
2020 IFRS
Share-based
compensation expense
and relates
social charges
Lease
incentives of
acquired
companies
2020
non-IFRS 2019 IFRS
Share-based
compensation expense
and relates social
charges
Lease
incentives of
acquired
companies
2019
non-IFRS
Year ended December 31,
Cost of revenue
€(749.7)
€13.1
€ 0.8 €(735.8)
€(633.6)
Research and
development
Marketing and
sales
General and
administrative
TOTAL
(935.4)
(1,256.3)
(390.7)
75.7
62.3
63.1
€214.1
1.3
(858.4)
(737.9)
0.4 (1,193.6)
(1,226.3)
€9.1
69.5
49.9
€ 0.2 €(624.2)
0.3
(668.2)
0.1 (1,176.3)
0.4
(327.2)
(329.5)
€2.9
39.9
€168.5
-
(289.6)
€ 0.5
3.1.1.3
Critical Accounting Principles
Our consolidated financial statements have been prepared
in accordance with IFRS. The preparation of these financial
statements requires us to make certain assumptions and
estimates. Actual results may differ from these estimates under
different assumptions or conditions. We believe 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 compensation, 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: Financial Review of 2020
Compared to 2019
Revenue
Our total revenue is comprised of (i) software revenue, which is our primary source of revenue, and (ii) services revenue. For the
year ended December 31, 2020 software revenue represented 90.1% (88.1% in FY 2019) and services revenue represented 9.9%
(11.9% in FY 2019) of our IFRS total revenue.
(in millions of euros except percentages)
Total Revenue*
Total Software Revenue
} Licenses and Other software
} Subscription and Support revenue
Americas total software
Europe total software
Asia total software
Services Revenue
Year ended December 31,
2020
€4,452.2
€4,012.6
807.5
3,205.2
1,527.0
1,482.6
1,003.0
€439.6
2019
€4,018.2
€3,539.4
999.6
2,539.8
1,108.7
1,469.7
961.0
€478.8
Change
Change in cc
11%
13%
(19%)
26%
38%
1%
4%
(8%)
12%
15%
(18%)
28%
41%
2%
6%
(7%)
* Our largest national markets as measured by total revenue were the United States, Japan, Germany, France and China for the years ended December 31, 2020 and 2019.
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DASSAULT SYSTÈMES ANNUAL REPORT 20203 3 Financial review and prospects
Operating and Financial Review
IFRS total revenue increased 10.8% or €434.0 million,
reflecting software revenue growth of €473.2 million partly
offset by services revenue decrease of €39.2 million. Currency
had a negative impact of approximately 1 percentage point on
IFRS total revenue growth.
On a non-IFRS basis, total revenue of €4.46 billion
(FY 2019 €4.06 billion) increased 10.1% as reported and 12%
in constant currencies. On an organic basis and in constant
currencies, non-IFRS total revenue decreased 3% reflecting
the impact of the COVID-19 on license software and services
activities.
Software revenue is comprised of subscription and support
revenue and licenses revenue and other software revenue.
Subscription and support revenue are referred to together as
‘‘recurring revenue’’.
Our software applications are licensed principally pursuant
to one of two payment structures: (i) licenses, for which
the customer pays an initial or one-time fee for a perpetual
license or (ii) subscription revenue for which the customer
pays periodic fees to keep the license active. Support revenue
represents periodic fees associated with the sale of unspecified
product updates on a when-and-if-available basis and
technical support. Subscription licenses entitle the customer
to product updates without additional charge and to technical
support. Product updates include improvements to existing
products but do not cover new products. Subscription revenue
also is derived from multi-year cloud arrangements, including
access to cloud solution, hosting and support services. Other
software revenue is comprised of the Company’s product
development revenue relating to the development of additional
functionalities of standard products requested by customers
and reinstated maintenance.
(in millions of euros, except percentages)
Software revenue by type:
Licenses and Other software revenue
Subscription and Support revenue
TOTAL SOFTWARE REVENUE
(as % of total revenue)
Year ended December 31,
2020
2019
807.5
3,205.2
999.6
2,539.8
€4,012.6
€3,539.4
90.1%
88.1%
IFRS software revenue increased 13.4% or €473.2 million,
reflecting subscription and support revenue growth, offset
in part by a decrease in new licenses and other software.
increased 26.2%, or
Subscription and support revenue
€665.4 million with the addition of Medidata and organic
growth of 7% in constant currencies. Licenses and other
software revenue decreased 18% in constant currencies
on COVID-19 related demand erosion. Recurring software
revenue represented 80% of software revenue compared to
72% in 2019. On an organic basis and in constant currencies,
software revenue remained stable, with subscription and
support revenue organic growth offset by lower licenses and
other software.
On a non-IFRS basis, software revenue of €4.02 billion
increased 12.6% or 14% in constant currencies, driven by the
same factors. Non-IFRS subscription and support revenue of
€3.22 billion increased 25.0% or 27% in constant currencies.
Licenses and other software revenue of €807.5 million
decreased 19.2% or 18% in constant currencies. On an organic
basis and in constant currencies, non-IFRS software revenue
decreased 1%.
Services revenue is principally comprised of revenue from
consulting services in methodology for design, simulation,
deployment and support, training services and engineering
services. In addition, services and other revenue also include
content production for use in 3D visualization, advertising,
sales and marketing.
(in millions of euros, except percentages)
Services revenue
(as% of total revenue)
Year ended December 31,
2020
€439.6
9.9%
2019
€478.8
11.9%
Services revenue decreased 8.2% (8.5% on a non-IFRS basis)
and 7% in constant currencies (IFRS and non-IFRS), reflecting
COVID-19 related disruptions to new business and to service
engagements partially offset by the addition of services from
Medidata.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial review and prospects
Operating and Financial Review
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Non-IFRS services revenue gross margin decreased from
10.5% in 2019 to 9.0% in 2020, on lower than expected
activities, offset in part by a positive mix effect and lower sub-
contracting costs.
Operating Expenses
(in millions of euros)
IFRS Operating expenses
Non-IFRS adjustments:
} Amortization of acquired intangible
assets and of tangible assets
revaluation
} Share-based compensation expense
Year ended December 31,
2020
2019
€(3,782.5) €(3,205.4)
€667.5
€447.1
394.5
244.0
and related social charges
214.1
168.5
} Lease incentives of acquired
companies
} Other operating income and expense,
net
2.9
0.5
56.0
34.1
Non-IFRS Operating expenses
€(3,115.0) €(2,758.3)
IFRS operating expenses increased 18.0% in total, reflecting in
particular external growth from acquisitions of 23 percentage
points offset
in part by favorable currency effects of
2 percentage points. On an organic basis and in constant
currencies, IFRS and non-IFRS operating expenses decreased
3%.
Specifically, IFRS operating expenses increased €577.1 million
to €3,782.5 million, reflecting higher expenses for R&D of
€197.4 million, for amortization of acquired intangible assets
and of tangible assets revaluation of €150.5 million, and for
cost of services of €145.4 million.
Non-IFRS operating
increased 12.9% or
expenses
€356.7 million to €3,115.0 million, reflecting higher
expenses for R&D of €190.2 million and for cost of services
of €141.8 million. Non-IFRS operating expenses increased
15% in constant currencies due to external growth from
acquisitions.
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 assets and of
tangible assets revaluation, (ii) share-based compensation
expense and related social charges, (iii) lease incentives
of acquired companies and (iv) other operating income
and (expense), net including acquisition, integration and
restructuring expenses, and impairment of goodwill and
acquired intangible assets. With respect to share-based
compensation expense and related social charges the increase
of €45.6 million in 2020 compared to 2019 principally reflects
the full year effect of rights granted at the end of 2019 and
related to Medidata acquisition and changes in previous plans.
For the reconciliation of this non-IFRS financial information
with information set forth in our financial statements and
the Notes thereto, see paragraph 3.1.1.2 “Supplemental
Non- IFRS Financial Information” further above and the
discussion of Amortization of acquired intangibles and Other
operating income and expense, net below herein.
Cost of Software Revenue
The cost of software revenue includes principally software
personnel costs, licensing fees paid for third-party components
integrated into the Company’s own products, hosting and
other cloud-related costs and other expenses.
Year ended December 31,
(in millions of euros, except percentages)
2020
2019
Cost of software revenue (excluding
amortization of acquired intangibles and of
tangible assets revaluation)
(as% of total revenue)
€(341.5)
€(196.2)
7.7%
4.9%
IFRS cost of software revenue (excluding amortization of
acquired intangibles and of tangible assets revaluation)
increased 74.1% or €145.3 million, principally due to the
addition of the Medidata acquisition for 58 percentage points.
On an organic basis cost of software increased 19 percentage
points, reflecting in particular costs related to headcount
growth. Currency had a positive effect of about 2.9 percentage
points.
Non-IFRS cost of software revenue increased 73.5% to
€334.7 million from €192.9 million in 2019 due to the same
factors with 56 percentage points of growth from acquisitions
and a 20 percentage points increase from organic growth.
Currency had a positive effect of about 2.5 percentage points.
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DASSAULT SYSTÈMES ANNUAL REPORT 20203 3 Financial review and prospects
Operating and Financial Review
Cost of Services Revenue
The cost of services revenue includes principally personnel
and other costs related to organizing and providing services
revenue.
(in millions of euros, except percentages)
Cost of services revenue
(as% of total revenue)
Year ended December 31,
2020
2019
€(408.1)
€(437.4)
9.2%
10.9%
IFRS cost of services revenue decreased 6.7% or €29.3 million
on lower costs and currency effects, offset in part by the
addition of Medidata for 9 percentage points. Specifically,
on an organic basis and in constant currencies, IFRS cost of
services decreased 14%, reflecting lower travel and services
subcontracting. Currency had a 1.7 percentage points positive
currency impact.
Non-IFRS cost of services decreased 7.0% or €30.2 million to
€401.1 million due to the same factors.
Research and development expenses
Expenses for R&D include primarily personnel costs as well
as the rental, depreciation and maintenance expenses for
computer hardware used in R&D including cloud infrastructure,
development tools, computer networking and communication
expenses.
Costs for R&D of software are expensed in the period in which
they are incurred. We do 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 received from
various governmental authorities to fund certain R&D projects
as well as R&D tax credits received mostly in France.
Year ended December 31,
(in millions of euros, except percentages)
2020
2019
Research and development expenses
€(935.4)
€(737.9)
(as% of total revenue)
21.0%
18.4%
IFRS research and development expenses increased 26.8%
or €197.4 million, reflecting change in perimeter from
acquisitions of 24 percentage points as well as higher organic
personnel cost growth. Thus, on an organic basis, IFRS R&D
increased 4 percentage points in total and currency had a
positive impact of 1.2 percentage points.
Non-IFRS research and development expenses increased
28.5% to €858.4 million, principally due to change in
perimeter from acquisitions and organic growth. Specifically,
on an organic basis, non-IFRS research and development
expenses increased 5%. Currency had a positive impact of
1.5 percentage points.
Marketing and Sales Expenses
Marketing and Sales expenses consist primarily of personnel
costs, which
include sales commissions and personnel
expenses for processing sales transactions; marketing and
including advertising;
communications expenses,
travel
infrastructure costs, such as
expenses; and marketing
information technology resources used for marketing.
Year ended December 31,
(in millions of euros, except percentages)
2020
2019
Marketing and sales expenses
€(1,256.3) €(1,226.3)
(as% of total revenue)
28.2%
30.5%
IFRS Marketing and sales expenses
increased 2.5% or
€30.0 million in total, reflecting lower marketing and sales
expenses on an organic basis largely offsetting by external
growth from acquisitions estimated at 10 percentage
points for sales expenses and at 11 percentage points for
marketing expenses. Currency had a positive impact of under
2 percentage points.
Similarly, non-IFRS Marketing and sales expenses increased
1.5% to €1,193.6 million from €1,176.3 million in 2019.
On an organic basis and in constant currencies, IFRS and
non-IFRS sales, respectively by 6% and 7%, and marketing
expenses decreased 7% reflecting restrictions on physical
events and lower travel expenses in connection with the
COVID-19 health crisis.
General and Administrative Expenses
General and administrative expenses consist primarily of
personnel costs of the finance, human resources, legal and
general management; third-party professional fees (excluding
acquisition-related fees) and other expenses; travel expenses;
and infrastructure costs, including information technology
resources.
Year ended December 31,
(in millions of euros, except percentages)
2020
2019
General and administrative expenses
€(390.7)
€(329.5)
(as% of total revenue)
8.8%
8.2%
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial review and prospects
Operating and Financial Review
3
IFRS general and administrative expenses increased 18.6%
or €61.2 million in total, principally reflecting the effect of
acquisitions.
Similarly, non-IFRS general and administrative expenses
increased 13.0% or €37.6 million in total to €327.2 million
from €289.6 million in 2019.
On an organic basis and in constant currencies, general and
administrative expenses decreased 4% (IFRS) and 5% (non-
IFRS) principally reflecting restrictions and lower travel
expenses in connection with the COVID-19 health crisis.
Amortization of Acquired Intangible assets and of tangible
assets revaluation
Amortization of acquired
includes mainly
amortization of acquired technology and acquired customer
relationships.
intangibles
(in millions of euros)
Year ended December 31,
2020
2019
Amortization of acquired intangible
assets and of tangible assets revaluation
€(394.5)
€(244.0)
IFRS Amortization of acquired intangible assets and tangible
assets revaluation
increased 61.7% or €150.5 million
principally reflecting the Medidata acquisition completed in
the fourth quarter of 2019.
See Notes 16 and 17 to the consolidated financial statements.
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 2019). 2019 other operating income (expense) included
acquisition costs for €(24.0) million (nil in 2020).
See Note 8 to the consolidated financial statements.
Operating Income
(in millions of euros)
Operating income
Year ended December 31,
2020
2019
€669.7
€812.8
IFRS Operating income decreased 17.6% reflecting higher
total revenue of €434.0 million, up 10.8%, offset by a
€577.1 million increase in operating expenses notably R&D
costs, amortization of acquired intangible assets and of
tangible assets revaluation and cost of software mainly due
to external growth from acquisitions. IFRS Operating margin
decreased from 20.2% in 2019 to 15.0% in 2020.
Non-IFRS Operating income increased 4.0%, as reported and
6% in constant currencies and totaled €1.35 billion compared
to €1.30 billion in 2019. The non-IFRS operating margin was
30.2% compared to 32.0% in 2019, and principally reflected
acquisition dilution of about 210 basis points offset in part
by organic growth of about 40 basis points. Currency did not
have an impact on the non-IFRS operating margin evolution
on a full year basis.
Financial income (loss), net
Financial income (loss), 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.
(in millions of euros)
2020
2019
(in millions of euros)
Other operating income (expense), net
€(56.0)
€(34.1)
Financial income (loss), net
Year ended December 31,
Year ended December 31,
2020
€(23.4)
2019
€3.1
IFRS Other operating
income
€(56.0) million in 2020 compared to €(34.1) million in 2019.
(expense), net
totaled
Other operating income and (expense), net mainly includes
the costs incurred in connection with a voluntary early
retirement plan for €(33.5) million (€(4.2) million in 2019),
the costs incurred in connection with relocation activities
for €(9.6) million (€(3.7) million in 2019), the impairment
of acquired intangible assets for €(7.3) million (nil in 2019)
and other restructuring costs for €(4.6) million (€(2.1) million
IFRS financial income (loss), net totaled €(23.4) million in
2020 compared to €3.1 million for 2019, principally reflecting
a decrease in interest income from lower cash balances and
higher interest expense related to an increase in debt for the
financing of the acquisition of Medidata.
Non-IFRS financial income, net totaled €(22.3) million,
compared to €3.2 million in 2019 with the decrease principally
driven by the same factors.
See Note 9 to the consolidated financial statements.
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DASSAULT SYSTÈMES ANNUAL REPORT 20203 3 Financial review and prospects
Operating and Financial Review
Income tax expense
Net income and net income per diluted share
Year ended December 31,
Year ended December 31,
(in millions of euros, except percentages)
2020
2019
(in millions of euros, except per share data)
2020
2019
Income tax expense
€(160.8)
€(209.6)
Net income attributable to shareholders
€491.0
€615.3
Effective consolidated tax rate
24.9%
25.7%
Net income per diluted share
€1.86
€2.34
IFRS income tax expense decreased by 23.3%, reflecting
primarily a 20.8% decrease in pre-tax income and, to a lesser
extent, a decrease from 25.7% in 2019 to 24.9% in 2020 of
the effective tax rate.
On a non-IFRS basis, income tax expense decreased 3.3%
to €332.8 million compared to €344.0 million in 2019,
principally due to an effective tax rate decrease. On a non-IFRS
basis, the estimated effective tax rate was 25.1% compared to
26.5% in 2019.
The principal benefit driving the IFRS and non-IFRS lower
effective tax rates for 2020 was the decrease of the statutory
tax rate in France.
See Note 10 to the consolidated financial statements for
an explanation of the differences between the effective tax
rate and the French corporate income tax computed at the
statutory rate of 32.02% for 2020 and 34.43% for 2019.
Weighted average diluted
shares outstanding
264.2
263.2
IFRS net income per diluted share decreased 20.5% to
€1.86, principally driven by a decrease in operating income
of 17.6%, mainly on higher amortization of intangibles and
higher financial net losses, partially offset by lower income
tax expense.
Non-IFRS diluted net income per share increased 3.3% to
€3.77 from €3.65 in 2019 mainly reflecting an increase in
operating income of 4.0%, with higher financial (loss), net
partially offset by a lower effective tax rate. Excluding currency
effects, non-IFRS diluted net income per share grew 5%.
3.1.3 Variability in Quarterly Financial Results
Our quarterly licenses revenue growth may have varied
significantly in the past and may vary significantly in the
future. Over the course of 2020, we have seen the impact of
the COVID-19 pandemic affecting macroeconomic conditions
due to significant restrictions affecting demand as well as
triggering supply constraints. In addition, quarterly licensing
revenue growth reflects business seasonality, clients’ decision
processes, licenses and subscription licensing mix and timing
and mix of multi-year on-premise software contracts. Services
revenue activity also vary significantly by quarter reflecting
clients’ decision processes as well as our decisions regarding
service engagements to be performed by us or by system
integrators we work with. In addition, the COVID-19 health
crisis has significantly impacted services activities during 2020
in our Manufacturing Sector, in particular, due to a lower level
of new licenses activities reducing the demand for services
as well as the timeline and scope of services agreements
underway prior to the COVID-19 pandemic.
Our total software revenue growth has generally been less
sensitive to quarterly variation due to the significant level of
recurring software revenue, which is comprised of subscription
revenue and support revenue. IFRS and non-IFRS Recurring
software revenue represented 80% and 72% of total software
revenue in 2020 and 2019, respectively but could be subject
to renewal delays. With the implementation of IFRS 15
effective as of January 1, 2018, sequential comparisons
of our recurring software revenue growth need, however,
to take into account the fact that a high proportion of on-
premise, subscription software contracts renew for an annual
period as of January 1st. Therefore, under IFRS 15 we record
a higher percentage of the annual amount of the on-premise
subscription in the first quarter. In addition, year-over-year
growth comparisons may be impacted by changes in timing
of annual on premise subscription renewals. Revenue from
cloud subscriptions are generally recognized ratably over the
contractual terms. Nonetheless, timing of large acquisitions
could affect our quarter to quarter growth rate of recurring
software revenue.
A significant portion of license sales typically occurs in the
last month of each quarter, and we normally experience our
highest licenses sales for the year in our fiscal fourth quarter.
Therefore, total revenue, operating income, operating margin
and net income have generally been higher in the fourth
quarter of each year.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial review and prospects
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Acquisitions and divestitures can also cause the different
elements of our revenue to vary from quarter to quarter. Rapid
changes in currency exchange rates could also cause reported
revenue, operating income and earnings per share and their
respective reported growth rates to vary from quarter to
quarter.
Therefore, it is possible that our quarterly total revenue
could vary significantly and that our net income could vary
significantly, reflecting the change in revenues, together with
the effects of our investment plans. See paragraphs 1.9.1.1
“Uncertain Global Economic Environment” and 1.9.1.11
“Variability
in Dassault Systèmes’ Quarterly Operating
Income” in Risk Factors.
(in millions of euros, except percentages)
Licenses and Other Software
Seasonality %
Subscription & Support Revenue
Seasonality %
Software Revenue
Seasonality%
3.1.4 Capital Resources
For the Year Ended December 31,
1Q
2020
172.3
21.3%
841.9
26.3%
€1,014.2
25.3%
2Q
2020
169.3
21.0%
789.5
24.6%
€958.8
23.9%
3Q
2020
167.0
20.7%
767.3
23.9%
€934.3
23.3%
4Q
2020
298.9
37.0%
806.4
25.2%
€1,105.3
27.5%
FY
2020
807.5
100.0%
3,205.2
100.0%
€4,012.6
100.0%
We have a significant financial flexibility thanks to our available
cash and short-term investments position and strong level of
annual cash flow. Principal uses of cash are for acquisitions,
repayment of debt, cash dividends and share repurchases to
minimize share count dilution from performance share plans.
improved to €(2.04) billion
Our net financial position
at December 31, 2020, compared to €(2.66) billion at
December 31, 2019, with an increase in cash and cash
equivalents and short-term investments of €0.20 billion to
€2.15 billion from €1.95 billion, less debt related to borrowings
of €4.19 billion compared to €4.60 billion in 2019.
As of December 31, 2020, Dassault Systèmes Adjusted
Net Debt/IFRS EBITDAO ratio stood at 1.8 compared to 2.5
in 2019, based on an adjusted net debt including the lease
liabilities as reported under IFRS 16 of €2,684.8 million
(€3,351.4 million in 2019) and an IFRS EBITDAO (EBITDA
adjusted with share-based payment) of €1,452.5 million
compared to €1,325.4 million in 2019.
Net operating cash flow grew by 4.7% from €1,186.1 billion
in 2019 to €1,241.3 billion for 2020. During 2020, cash
obtained from operations was used principally for repayment
of short- and long-term debt of €400.9 million (including in
particular the early repayment of loans related to Medidata’s
acquisition); distribution of cash dividends of €182.5 million;
repurchase of shares in the amount of €166.2 million; capital
expenditures, net of €127.0 million, payment for lease
obligations of €93.3 million; and payment for acquisitions
of €89.5 million (net of cash acquired). We also received cash
from exercise of stock options of €87.7 million.
In 2019, net operating cash flow increased 32.0% to
€1,186.1 million, compared to €898.6 million for 2018.
During 2019 cash obtained from operations was used
principally for payment for acquisitions, net of cash acquired,
of €5.21 billion; repayment of short- and long-term debt of
€1.11 billion (including Medidata’s repayment of debt for
€0.08 billion); distribution of cash dividends of €168.8 million;
repurchase of shares in the amount of €133.8 million capital
expenditures, net of €98.3 million; and payment for lease
obligations of €76.3 million. The Group also received cash
from exercise of stock options of €90.4 million.
Exchange rate fluctuations had a negative translation effect,
on cash and cash equivalent balances, of €87.4 million as of
December 31, 2020, compared to a positive translation effect
of €36.9 million as of December 31, 2019.
We follow a conservative policy for investing our cash
resources, mostly relying on investment-grade short-term
maturity
investments from major banks and financial
institutions counter-parties.
See also the Consolidated Statements of Cash Flows in
paragraph 4.1.1 “Consolidated Financial Statements”.
101
DASSAULT SYSTÈMES ANNUAL REPORT 20203 3 Financial review and prospects
Financial Objectives
3.2 Financial Objectives
We outlined our initial 2021 non-IFRS financial objectives on
February 4, 2021 at the time of the release of our unaudited
annual financial results for 2020 and are confirming them as
of the date of this report. We are expecting a gradual recovery
in 2021 leading to strong growth for the full year, with this
growth largely organic in nature and only reflecting the
current scope of operations.
Our objectives are subject to the assumptions and cautionary
statements set forth below and are subject to revision, as
market and business conditions as well as currency exchange
rates evolve during 2021.
initial 2021 financial objectives are prepared and
Our
communicated only on a non-IFRS basis are as follows:
} 2021 non-IFRS revenue growth objective range of about
9% to 10% in constant currencies at €4.71 billion to
€4.76 billion reflecting the principal 2021 currency
exchange rate assumptions below for the U.S. dollar and
Japanese yen as well as the potential impact from additional
fluctuations of non-Euro currencies;
} 2021 non-IFRS operating margin of about 30.8% compared
to 30.2% in 2020;
} 2021 non-IFRS diluted net earnings per share of about
€4.10 to €4.15, representing a growth objective of about
8% to 10% as reported;
} the financial objectives are based upon an average exchange
rate assumption of U.S. dollar 1.22 per euro for 2021 and
Japanese yen of 126.0 per euro for 2021.
The 2021 financial objectives above include the following
key assumptions and are on a non-IFRS basis and in constant
currencies:
} software revenue growth of about 9-10% in constant
currencies;
} recurring software revenue growth of about 8-9% in
constant currencies;
} license revenue growth of about 13-15% in constant
currencies;
} effective tax rate of about 23.7%;
} MEDIDATA total revenue growth of about 14% and an
operating margin improvement like for like of about
230 basis points.
102
The 2021 non-IFRS financial objectives/framework set forth
above do not take into account the following accounting
elements and are estimated based upon the 2021 principal
currency exchange rates above: contract liabilities write-
downs estimated at approximately €2 million, share-based
compensation expense,
including related social charges,
estimated at approximately €121 million and amortization
intangibles and of tangibles reevaluation,
of acquired
estimated at approximately €348 million, largely impacted
by the Medidata acquisition; and lease incentives of acquired
companies at approximately €3 million. The above objectives
also do not include any impact from other operating income and
expenses, net principally comprised of acquisition, integration
and restructuring expenses, and impairment of goodwill and
acquired intangible assets; from one-time items included in
financial income (loss); from one-time tax effects; and from
the income tax effects of these non-IFRS adjustments. Finally,
these estimates do not include any new stock option or share
grants, or any new acquisitions or restructurings completed
after December 31, 2020.
In conjunction with our 2020 Capital Market Day held on
November 17, 2020, we issued a press release updating our
2019-2023 multi-year growth plan, initially announced in
June 2018. We are targeting a 2020-2024 non-IFRS diluted
EPS CAGR of about 13% to €6 per share. The one-year shift
reflects the impact of the pandemic on our 2020 financial
results.
The information above includes statements that express our
operating framework and objectives for our future financial
performance. Such forward-looking statements are based
on our management’s views and assumptions as of the date
of this report and involve known and unknown risks and
uncertainties. The main risks and uncertainties to which the
Group may be exposed during fiscal year 2021 are presented
paragraph 1.9 “Risk factors”.
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial review and prospects
Interim and Other Financial Information
3
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.
103
DASSAULT SYSTÈMES ANNUAL REPORT 20203 104
ANNUAL REPORT 2020 DASSAULT SYSTÈMES 4
FINANCIAL STATEMENTS
4.1 Consolidated Financial Statements 106
4.1.1 Consolidated Financial Statements
4.1.2 Statutory Auditors’ Report on the Consolidated
Financial Statements
4.2 Parent company financial
statements
106
148
153
4.2.1 Parent company financial statements and notes
154
4.2.2 Selected financial and other information
for Dassault Systèmes SE over the last five years
177
4.2.3 Statutory Auditors’ Report on the parent
company financial statements
4.2.4 Statutory Auditors’ Special Report on Related
Party Agreements
178
183
4.3 Legal and Arbitration Proceedings 184
105
DASSAULT SYSTÈMES ANNUAL REPORT 2020CONTENTS 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 26, 2021.
4.1 Consolidated Financial Statements
4.1.1 Consolidated Financial Statements
Consolidated Statements of Income
(in millions of euros, except per share data)
Licenses and other software revenue
Subscription and support revenue
Software revenue
Services revenue
TOTAL REVENUE
Cost of software revenue
Cost of services revenue
Research and development
Marketing and sales
General and administrative
Amortization of acquired intangible assets and of tangible assets revaluation
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 Group
Non-controlling interests
Earnings per share
Basic net income per share
Diluted net income per share
Year ended December 31,
2020
€807.5
3,205.2
4,012.6
439.6
4,452.2
(341.5)
(408.1)
(935.4)
2019
€999.6
2,539.8
3,539.4
478.8
4,018.2
(196.2)
(437.4)
(737.9)
(1,256.3)
(1,226.3)
(390.7)
(394.5)
(56.0)
669.7
(22.9)
(0.4)
646.3
(160.8)
€485.5
€491.0
€(5.5)
€1.89
€1.86
(329.5)
(244.0)
(34.1)
812.8
8.5
(5.4)
815.9
(209.6)
€606.3
€615.3
€(9.0)
€2.37
€2.34
Note
4
8
9
9
10
11
11
106
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
Consolidated Statements of Comprehensive Income
(in millions of euros)
NET INCOME
Gain on hedging reserves
Income tax related to above items
Foreign currency translation adjustment
Other comprehensive income that are or may be reclassified to profit or loss in
subsequent periods
Remeasurements of defined benefit pension plans
Remeasurements of investments in non-consolidated equities
Income tax related to above items
Other comprehensive income that will not be reclassified to profit or loss in subsequent periods
OTHER COMPREHENSIVE INCOME, NET OF TAX
TOTAL COMPREHENSIVE INCOME
Attributable to:
Equity holders of the Group
Non-controlling interests
Note
23
22
Year ended
December 31,
2020
€485.5
36.0
(13.7)
(664.1)
(641.8)
4.7
(4.1)
-
0.6
(641.2)
€(155.7)
€(146.3)
€(9.4)
2019
€606.3
6.4
0.1
15.0
21.5
(33.9)
-
8.5
(25.4)
(3.9)
€602.3
€611.1
€(8.8)
107
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
Consolidated Balance Sheets
(in millions of euros)
Assets
Cash and cash equivalents
Trade accounts receivable, net
Contract assets
Income tax receivable
Other current assets
TOTAL CURRENT ASSETS
Property and equipment, net
Other non-current assets
Deferred tax assets
Intangible assets, net
Goodwill
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
(in millions of euros)
Liabilities and equity
Trade accounts payable
Accrued compensation and other personnel costs
Contract liabilities
Borrowings, current
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 comprehensive income, net of tax
Total parent shareholders’ equity
Non-controlling interests
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
108
Year ended December 31,
Note
2020
2019
12
13
13
13
14
15
10
17
18
13
20
19
10
20
19
23
€2,148.9
1,229.1
€1,944.9
1,319.2
27.0
152.7
202.7
26.9
115.4
262.6
3,760.3
3,669.0
861.1
252.4
153.1
3,546.8
4,390.5
9,203.9
899.7
249.5
137.4
4,186.1
4,730.9
10,203.7
€12,964.2
€13,872.6
€171.7
496.1
1,169.1
16.0
17.2
216.7
2,086.9
625.3
4,174.3
971.5
5,771.2
132.6
954.0
(442.1)
5,043.7
(626.9)
5,061.3
44.8
5,106.1
€220.0
497.3
1,093.5
4.4
55.4
263.3
2,133.8
830.2
4,596.8
1,049.2
6,476.2
132.0
863.3
(450.2)
4,653.2
10.4
5,208.7
53.9
5,262.6
€12,964.2
€13,872.6
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Consolidated Statements of Cash Flows
(in millions of euros)
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
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 and sale of treasury stock
Acquisition of non-controlling interests
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash and cash equivalents
INCREASE (DECREASE) 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
Total cash outflow for leases
Financial statements
Consolidated Financial Statements
4
Note
24
24
14, 17
16
23
23
24
20
20
Year ended December 31,
2020
€485.5
742.5
13.3
1,241.3
(127.0)
-
(89.5)
8.5
(208.0)
87.7
(182.5)
(166.2)
(5.2)
18.5
(400.9)
(93.3)
(741.9)
(87.4)
204.0
1,944.9
€2,148.9
€250.4
€33.6
€115.1
2019
€606.3
462.8
117.0
1,186.1
(98.3)
(0.1)
(5,211.7)
(24.7)
(5,334.8)
90.4
(168.8)
(133.8)
-
4,641.7
(1,105.8)
(76.3)
3,247.5
36.9
(864.4)
2,809.3
€1,944.9
€134.6
€28.5
€90.8
109
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
Consolidated Statements of Shareholders’ Equity
(in millions of euros)
DECEMBER 31, 2018*
Adjustment on initial application of
IFRS 16 (net of tax)
JANUARY 1, 2019 ADJUSTED
BALANCE
Net income
Other comprehensive income, net
of tax
TOTAL COMPREHENSIVE INCOME
Dividends
23
Exercise of stock options
Treasury stock transactions
Share-based compensations
6, 7
Other changes**
DECEMBER 31, 2019
Net income
Other comprehensive income, net
of tax
TOTAL COMPREHENSIVE INCOME
Dividends
23
Exercise of stock options
Treasury stock transactions
Share-based compensations
6, 7
Transactions with non-controlling
interests
Other changes
DECEMBER 31, 2020
Common
stock
Share
premium
Treasury
stock
Note
Retained
earnings
and other
reserves
Other
comprehensive
income, net of
tax
Total parent
shareholders’
equity
Non-
controlling
interests
Total
Equity
€131.4
€766.3 €(353.8)
€4,003.5
€14.6
€4,561.9
€63.9 €4,625.9
-
-
-
(36.0)
-
(36.0)
-
(36.0)
131.4
766.3
(353.8)
3,967.5
14.6
4,526.0
-
-
-
-
-
-
-
-
0.7
97.0
-
-
-
-
-
-
-
-
-
-
-
(96.5)
-
-
615.3
-
615.3
-
615.3
(168.8)
-
(37.3)
116.3
160.2
(4.1)
(4.1)
-
-
-
-
-
(4.1)
611.1
(168.8)
97.7
(133.8)
116.3
160.2
63.9
(9.0)
4,589.9
606.3
0.2
(8.8)
-
-
-
0.2
(1.4)
(3.9)
602.3
(168.8)
97.7
(133.8)
116.5
158.8
€132.0
€863.3 €(450.2)
€4,653.2
€10.4
€5,208.7
€53.9 €5,262.6
491.0
-
491.0
(5.5)
485.5
-
-
-
-
-
-
-
-
0.5
90.7
-
-
-
-
-
-
491.0
(182.5)
-
-
-
-
-
-
-
-
-
8.1
(174.3)
-
-
-
175.7
47.4
33.2
(637.3)
(637.3)
-
-
-
-
-
-
(637.3)
(146.3)
(182.5)
91.2
(166.2)
175.7
(3.9)
(9.4)
-
-
-
(641.2)
(155.7)
(182.5)
91.2
(166.2)
0.8
176.5
47.4
33.2
(0.6)
0.1
46.8
33.3
€132.6
€954.0 €(442.1)
€5,043.7
€(626.9)
€5,061.3
€44.8 €5,106.1
*
**
The Group has initially applied IFRS 16 at January 1, 2019. In accordance with the transition method chosen, comparative information is not restated.
Including €121.0 million related to the pre-acquisition fair value of the right to receive a replacement award for Medidata unvested share at acquisition date (see the Note 7 Share-
based Compensations and the Note 16 Business Combinations).
Analysis of changes in shareholders’ equity related to components
of the other comprehensive income
(in millions of euros)
DECEMBER 31, 2018
Variations
DECEMBER 31, 2019
Variations
DECEMBER 31, 2020
Investments in
non-
consolidated
equities
€3.4
-
€3.4
(3.4)
€-
Foreign
currency
translation
adjustment
€67.9
14.8
€82.6
(660.2)
Hedging
reserves
€(2.5)
6.5
€4.1
22.3
Actuarial
gains and
losses
Parent
shareholders’
equity
Non-
controlling
interests
€(54.2)
(25.4)
€(79.6)
€14.6
(4.1)
€10.4
4.0
(637.3)
€0.9
0.2
€1.1
(3.9)
€26.4
€(577.6)
€(75.6)
€(626.9)
€(2.8)
Other
comprehensive
income, net of
tax
€15.5
(3.9)
€11.6
(641.2)
€(629.6)
110
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
Notes to the Consolidated Financial Statements
CONTENTS
Note 1 Description of Business
112
Note 14 Property and Equipment, Net
Note 2
Summary of Significant
Accounting Policies
112
Note 3
Segment and Geographic Information 117
Note 15 Other Non-Current Assets
Note 16 Business Combinations
Note 17
Intangible Assets, Net
Note 4
Software Revenue
Note 5 Government Grants
Note 6
Personnel Costs
Note 7
Share-based Compensations
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
Note 13 Trade Accounts Receivable, Net,
119
120
120
120
124
125
125
127
127
Note 18 Goodwill
Note 19 Other Liabilities
Note 20 Borrowings
Note 21 Derivatives and Currency
and Interest Rate Risk Management 138
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 Statutory Auditors’ Fees
and Services
Contract Balances and Other Current
Assets
128
Note 28 Principal Dassault Systèmes
Companies
129
131
131
133
134
135
136
4
140
143
144
144
145
146
147
111
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
The accompanying notes are an integral part of these consolidated financial statements.
Note 1 Description of Business
The “Group” refers to Dassault Systèmes SE and
its
subsidiaries. The Group provides end-to-end software
solutions and services, designed to support companies’
innovation processes, from specification and design of a
new product, to its manufacturing and sale to the customer,
through all stages of digital mock-up, simulation, and realistic
3D virtual experiences representing the end-user experience.
The Group serves eleven industries structured into three
sectors: Manufacturing
(Transportation &
Mobility; Aerospace & Defense; Marine & Offshore; Industrial
Equipment; High- Tech; Home & Lifestyle; Consumer Packaged
Goods & Retail; and a portion of Business Services); Life
Sciences & Healthcare (Life Sciences); and Infrastructure & Cities
Industries
(Energy & Materials; Construction, Cities & Territories;
Business Services). To serve its customers, the Group has
developed a broad software applications portfolio, comprised
of 3D modeling applications, simulation applications, social
and collaborative applications, and information intelligence
applications, powered by its 3DEXPERIENCE platform.
Dassault Systèmes SE is a European company (Societas
Europaea), 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 SE shares are listed in France on Euronext Paris.
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 by the European Union as of
December 31, 2020. These consolidated financial statements
were established by the Board of Directors on March 18, 2021.
The consolidated
financial statements are presented
in millions of euros except where otherwise indicated. Some
total rounding difference may occur.
The consolidated financial statements include the accounts
of Dassault Systèmes SE and its subsidiaries. Companies
over which the Group has control are fully consolidated.
The Group controls an entity when (i) it has power over this
entity, (ii) is exposed to or has rights to variable returns from
its involvement with that entity, and (iii) has the ability to
use its power over that entity to affect the amount of those
returns. Companies over which the Group exercises significant
influence are accounted for under the equity method.
Intercompany transactions and balances are eliminated.
Impact of significant recently issued accounting
standards
New standards, interpretations or amendments effective
beginning on January 1, 2020 had no impact on the Group’s
consolidated financial statements. As a reminder, changes in
accounting policies performed in 2019 were mainly related to
the adoption of IFRS 16 standard.
The Group undertakes no early application of any standard or
interpretation or associated amendments which were already
published in the Official Journal of the European Union at
December 31, 2020.
interpretations published
Standards, amendments and
by the IASB and not yet approved by the EU do not have a
significant impact on the consolidated financial statements at
December 31, 2020.
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.
involving the use of significant estimates and
Areas
assumptions mainly include: assessing product lifecycles;
identifying the different elements comprising a software
solution arrangement, including the distinction between
upgrades/enhancements, new products and
services,
contract price allocation to the different elements based
on their standalone selling prices and determining the
revenue recognition date of those elements; 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
112
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
assets in a business combination; determining assumptions
to estimate the fair value of share-based compensations;
assessing the recognition of deferred tax assets; and making
reasonable estimates about the ultimate resolution of the
Group’s tax uncertainties based on current tax laws and the
Group’s interpretation thereof. Actual results and outcomes
could differ from management’s estimates and assumptions.
Foreign currency adjustments
The functional currency of the Group’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 Group’s and its
subsidiaries’ functional currency are recorded in the statement
of income.
Revenue recognition
The Group derives revenue from two primary sources:
(1) licenses, other software revenue (which includes the
development of additional functionalities of standard products
requested by clients), subscription and support (which
includes software license updates and technical support);
(2) consulting and training services.
Revenues are disclosed net of taxes collected from customers
and remitted to governmental authorities.
The Group accounts for a contract with a client when there is a
written agreement that creates legally enforceable rights and
obligations, including payment terms, when the contract has
commercial substance and when collection consideration is
probable. A performance obligation is a promise in a contract
with a client to transfer products or services that are distinct
from the other promises of the contract.
Revenue is recognized when, or as, control of a promised
product or service is transferred to a client, in an amount that
reflects the consideration to which the Group expects to be
entitled in exchange for those products or services.
Group’s products are also sold by value-added resellers that
are assessed as principal in the transaction because they
generally have the primary responsibility for fulfillment to
the end-customer. As a result, the Group recognizes revenue
in the amount of the fee it expects to be entitled to, i.e. the
consideration paid by the distributor, assuming all other
revenue recognition criteria are met.
Licenses, subscription, support and other software revenue
Software license revenue represents fees earned from granting
customers licenses to use the Group’s software. It includes
license revenue of perpetual and periodic license sales of
software products and is recognized at a point in time for an
arrangement when control is transferred to the client.
Subscription contracts generally have a one-year term and
contain two separate performance obligations pertaining to
on premise software license and support. The revenue from
such arrangements is recognized in line with revenue from
arrangements with multiple performance obligations.
Subscription revenue also is derived from access to cloud
solution contracts including remote access to a software
solution, hosting and support services. Revenue from
cloud subscription is generally recognized linearly over the
contractual term.
Support revenue represents periodic fees associated with the
sale of unspecified product updates on a when-and-if- available
basis and technical support. Support agreements are entered
into in connection with the initial software license purchase.
Support may be renewed by the customer at the conclusion
of each term. Revenue from support is recognized on a
straight- line basis over the term of the support agreement as
the Group has a standing ready obligation to provide services.
Other software revenue mainly relates to the development
of additional functionalities of standard products requested
by clients and is recognized when the development work is
performed.
Recurring fees for subscription and support are reported
within Software Revenue.
Revenue under arrangements with multiple performance
obligations, which typically include software licenses, support
and/or services agreements sold together is allocated to each
distinct performance obligation based on their standalone
selling price.
The stand-alone selling price is the price at which the Group
would sell a promised product or service separately to a client.
The Group generally establishes stand-alone selling price
based on the observable prices of products or services sold
separately in comparable circumstances to similar clients.
Estimating stand-alone selling price is a formal process that
includes review and approval by the Group’s management.
In certain instances, e.g. perpetual software licenses only sold
bundled with one year of support, the Group is not able to
establish a standalone selling price range based on observable
prices. The stand-alone selling price is then determined by
applying the residual approach.
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DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
When a sale of a license goes along with a service essential to
the software functionality, the two performance obligations
(software and service) are not distinct. Therefore, the license
revenue is recognized in accordance with the pattern of
recognition of the service obligation.
Services Revenue
Services revenue consist primarily of fees from consulting
services in process optimization and 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.
Performance obligation from fixed price contracts are usually
satisfied over the time. The revenue is recognized using
percentage of completion based on the labor costs incurred to
date as a percentage of the total estimated labor costs to fulfill
the contract.
Service revenues derived from time and material contracts are
recognized over the time on an output basis as labor hours are
delivered or direct project expenses are incurred.
Incremental Costs of Obtaining a Contract
The Group generally does not capitalize the incremental costs
incurred to obtain a contract (e.g. variable remuneration of the
sales force), and expenses them as incurred, as contracts with
customers generally have a contractual period of 12 months
or less.
For other long term contracts with customers, the Group
capitalizes the expenses associated with variable compensation
paid to internal sales personnel that is incremental to obtaining
and renewing these contracts.
Contract Assets/Liabilities and Accounts Receivable
The Group classifies the right to consideration in exchange for
products or services transferred to a client as either a receivable
or a contract asset. A receivable is a right to consideration that
is unconditional as compared to a contract asset, which is a
right to consideration that is conditional upon factors other
than the passage of time.
The majority of the Group’s contract assets represents unbilled
amounts related to fixed price services contracts when revenue
recognized exceeds the amount billed to the client, and the
right to consideration is subject to milestone completion or
client acceptance.
The amount of billing in excess of revenue recognized is
classified as contract liabilities.
Share-based compensations
The Group recognizes compensation expense for share- based
compensations 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 estimate.
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 Group’s common stock on the date
of grant. The fair value also includes the impact of certain
conditions based on an option-pricing model.
Vesting conditions excluded from the fair value measurement
are taken into account to estimate the number of shares that
will eventually vest. At the end of each reporting period, the
Group reviews this estimate and records the impact of changes
to original estimate, if any, in the statement of income.
For performance shares plan that allows the beneficiaries to
acquire shares either upon satisfaction of a market condition or
a non-market vesting condition, the Group estimates the fair
value of the equity instrument at grant date for each possible
outcome, and accounts for the share-based compensations
based on the most likely outcome at the end of each reporting
period.
Cost of software revenue
Cost of software revenue primarily includes software license
expense for software products included in the Group’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 Group’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 Group 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
114
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
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 Group receives grants from certain governmental
authorities to finance certain research and development
activities, including research and development tax credits in
France that are treated as government grants. 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 Group distinguishes
income and expense that are
unusual, infrequent or generally non-recurring in nature in
the consolidated statement of income. Such income and
expense include the impact of restructuring activity and other
generally non-recurring events, such as gain or loss on sale
of subsidiaries, impairment of goodwill or acquired intangible
assets, 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 include the
interest expenses related to financing operations and lease
liabilities. Are also included the impact of remeasuring
financial instruments at fair value, 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 tax assets are recognized for all deductible temporary
differences, the carry forward of unused tax credits and any
unused tax losses. 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 Group and it is probable that the temporary
difference will not reverse in the foreseeable future.
Allowance for doubtful accounts and loans receivable
The allowance for doubtful accounts and loans receivable
reflects the Group’s best estimate of probable losses inherent
in the receivable balance. The Group applies the simplified
approach as permitted by IFRS 9 to account for the expected
losses on trade accounts receivables and establishes a
statistical model based on historical experience and prospective
information including financial difficulties and other currently
available evidence.
Financial instruments
Fair Value – The carrying amount 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.
investments are
Cash, cash equivalents and short-term
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 Group 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 – The Group elected the
classification at fair value through Other comprehensive
income for all its investments in non-consolidated equities.
As such, net gains and losses related to equity securities are
recognized in Other comprehensive income and are never
reclassified to profit or loss.
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DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
Derivative
Instruments – The Group 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. Hedging
a net investment allows the Group to hedge the exposure
to adverse changes in the fair value of an investment made
abroad in a currency other than the Group’s operating currency
(i.e. IFRS 9). For this type of hedge, the effective portion of
the gain or loss on the hedging instrument is recognized in
other comprehensive income, and the ineffective portion is
recognized in the consolidated income statement. These gains
and losses offset the translation differences recorded at the
consolidation of the foreign subsidiary.
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 ten years; buildings, thirty 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.
Leases are recorded under property, plant and equipment
as a right-of-use asset. The asset is recognized at the
commencement date of the contract against a lease liability,
adjusted for direct costs, prepaid rents, lease incentives
received and estimated costs of dismantling and restoration.
These assets are amortized on a straight-line basis over the
lease term, which corresponds to the non-cancellable period,
together with the reasonably certain extension and termination
options, taking into account the penalties that would be
incurred upon termination. Under this model, the depreciation
expense of assets is accounted for in operating expense, and
the cost of the debt towards the lessor is accounted for under
financial expense.
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 nineteen 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 Group’s share in the
net fair value of the acquiree’s net identifiable assets.
When a business combination with permanent non- controlling
interest
includes a put option related to these same
non- controlling interests, a liability is recognized in the
consolidated balance sheet along with a decrease in the
consolidated reserves. Subsequent fluctuations of this put
option related to potential changes in estimates or unwinding
of discounts are also booked in consolidated reserves. Any
further acquisition of minority interests is considered as a
transaction between shareholders and is therefore not subject
to re-evaluation.
impairment
After initial recognition, goodwill is measured at cost less
any accumulated
losses. For the purpose
of impairment testing, goodwill acquired in a business
combination is, from the acquisition date, allocated to each of
the Group’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.
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 Group 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 Group’s commitments.
The amount of the provision provided is the best estimate of
the outflow of resources required to extinguish this present
obligation.
116
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
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
Group’s own equity instruments are credited or charged to
shareholders’ equity and are not recognized in the statement
of income.
Lease liabilities
Lease
liabilities are recognized at the commencement
date of the contracts. The lease term is determined as the
non- cancellable period, together with the reasonably certain
extension and termination options, taking into account the
penalties that would be incurred upon termination. The
amount of lease liability represents the present value of
lease payments over the lease term less any lease incentives
receivable, adjusted by the expected penalties payable under a
termination option which is reasonably certain to be exercised.
Borrowings
Borrowings are recognized initially at fair value, net of
incurred. Any difference between the
transaction costs
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 Group’s payments for defined contribution plans are
recorded as expenses for the relevant period.
For defined benefit plans concerning post-employment
benefits, the Group 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 Group, 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 a Group for which
discrete financial information is available and whose operating
results are regularly reviewed by management to assess
performance and allocate resources. Dassault Systèmes
operates in a single operating segment, the sale of software
solutions, which 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” of the Universal registration document).
The accounting policies used differ from those described in
Note 2 Summary of Significant Accounting Policies as follows:
} 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;
} the measure of operating segment income excludes:
} share-based compensations expense and associated
payroll taxes (see Note 6 Personnel Costs and Note 7
Share-based Compensations),
} amortization of acquired intangible assets and of tangible
assets revaluation,
} and other operating income and expense, net (see Note 8
Other Operating Income and Expense, Net);
} the measure of operating segment income takes into
account the impact of the lease incentives, including rent-
free periods, which are not recognized in the right-of-use
asset under a business combination.
117
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
(in millions of euros)
TOTAL REVENUE FOR OPERATING SEGMENT
Adjustment for unearned revenue of acquired companies
REPORTED TOTAL REVENUE
(in millions of euros)
INCOME FOR OPERATING SEGMENT
Adjustment for unearned revenue of acquired companies
Share-based compensations expense and related payroll taxes
Amortization of acquired intangible assets and of tangible assets revaluation
Lease incentives of acquired companies
Other operating income and expense, net
REPORTED OPERATING INCOME
Year ended December 31,
2020
2019
€4,464.8
€4,055.6
(12.6)
(37.4)
€4,452.2
€4,018.2
Year ended December 31,
2020
2019
€1,349.8
€1,297.4
(12.6)
(214.1)
(394.5)
(2.9)
(56.0)
€669.7
(37.4)
(168.5)
(244.0)
(0.5)
(34.1)
€812.8
Data by geographic operations of the Group is established according to geographical location of the consolidated companies and
is as follows:
Total revenue
Total assets
Additions to
property,
equipment
and intangibles
€1,223.9
€4,194.2
€53.2
631.3
218.0
2,335.3
2,292.7
893.0
443.0
2,147.2
580.0
8,106.7
7,947.0
663.3
118.4
43.1
3.5
80.8
79.1
44.3
1.5
€4,452.2
€12,964.2
€178.3
€1,279.1
€4,059.8
624.0
261.3
1,839.5
1,785.5
899.6
459.9
2,199.0
634.7
9,120.6
8,931.8
692.2
163.0
€207.8
177.8
21.7
43.8
43.5
17.5
2.5
€4,018.2
€13,872.6
€269.1
(in millions of euros)
2020
Europe
of which France
of which Germany
Americas
of which the United States
Asia
of which Japan
TOTAL
2019
Europe
of which France
of which Germany
Americas
of which the United States
Asia
of which Japan
TOTAL
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
The Group also receives data that identifies the location of the Group’s end-user customers. Using such information, revenue by
geographic area would be as follows:
(in millions of euros)
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 millions of euros)
Licenses revenue and other software revenue
Subscription and Support revenue(1)
SOFTWARE REVENUE
Year ended December 31,
2020
2019
€1,675.2
€1,671.8
381.3
431.3
1,688.6
1,575.7
1,088.4
481.6
382.7
424.9
1,298.6
1,172.8
1,047.7
465.1
€4,452.2
€4,018.2
Year ended December 31,
2020
€807.5
3,205.2
2019
€999.6
2,539.8
€4,012.6
€3,539.4
(1) In 2020, corresponds to €353.8 million at a point in time and €2,851.3 million over time, to be compared to €348.7 million and €2,191.1 million respectively in 2019.
Breakdown of software revenue by main product line is as follows:
(in millions of euros)
Industrial Innovation
Of which CATIA
Of which ENOVIA
Life Sciences
Mainstream Innovation
Of which SOLIDWORKS
SOFTWARE REVENUE
Year ended December 31,
2020
€2,287.6
1,065.8
345.7
787.3
937.6
841.4
2019*
€2,391.6
1,100.2
368.7
236.9
910.9
823.5
€4,012.6
€3,539.4
*
Commencing with the first quarter of 2020, the Group introduced a new presentation of revenue by product line which includes: 1) Industrial Innovation software revenue,
comprised of its CATIA, ENOVIA, SIMULIA, DELMIA, GEOVIA, NETVIBES/EXALEAD, and 3DEXCITE brands; 2) Life Sciences software revenue, comprised of its MEDIDATA and
BIOVIA brands; and 3) Mainstream Innovation software revenue, comprised of its SOLIDWORKS brand as well as CENTRIC PLM, 3DVIA and its new 3DEXPERIENCE WORKS family.
Under the new presentation, ENOVIA Life Sciences Compliance and Quality Management is included in Life Sciences software revenue (€15.0 million for 2019).
119
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
Note 5 Government Grants
Government grants were recorded in the consolidated statements of income as a reduction to research and development expenses
and to other expenses, as follows:
(in millions of euros)
Research and development
Other expenses
TOTAL GOVERNMENT GRANTS
Note 6 Personnel Costs
Year ended December 31,
2020
€33.4
3.3
€36.7
2019
€28.3
3.2
€31.6
Personnel costs, excluding share-based compensations (€178.3 million in 2020 and €116.5 million in 2019, see Note 7 Share-
based Compensations) and associated payroll taxes (€35.8 million in 2020 and €52.0 million in 2019), are presented in the
following table:
(in millions of euros)
Personnel costs
Social security costs
TOTAL
Average number of employees was 19,667 and 17,066 in 2020 and 2019 respectively.
Note 7 Share-based Compensations
Year ended December 31,
2020
2019
€(1,816.6)
€(1,548.2)
(390.5)
(346.2)
€(2,207.0)
€(1,894.4)
The expense related to compensations based on performance shares and stock-options, including associated payroll taxes, is
recorded in the consolidated statements of income as follows:
(in millions of euros)
Research and development
Marketing and sales
General and administrative
Cost of revenue
Year ended December 31,
2020
€(75.7)
(62.3)
(63.1)
(13.1)
2019
€(69.5)
(49.9)
(39.9)
(9.1)
TOTAL EXPENSE RELATED TO SHARE-BASED COMPENSATIONS
€(214.1)
€(168.5)
120
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
Changes during 2020 and 2019 of unvested performance shares, MEDIDATA Program and stock options were as follows:
UNVESTED AT JANUARY 1, 2019
Granted
Vested
Forfeited
UNVESTED AT DECEMBER 31, 2019
Granted
Vested
Forfeited
UNVESTED AT DECEMBER 31, 2020
Number of awards
Performance
shares
3,408,480
MEDIDATA
Program
Stock options
Total
-
3,615,957
7,024,437
307,615
1,894,649
1,632,374
3,834,638
(502,500)
(19,100)
(11,430)
(1,654,749)
(2,168,679)
(15,756)
(294,305)
(329,161)
3,194,495
1,867,463
3,299,277
8,361,235
1,161,687
-
2,208,503
3,370,190
(1,029,050)
(675,526)
(1,587,681)
(3,292,257)
(13,020)
(128,002)
(227,301)
(368,323)
3,314,112
1,063,935
3,692,798
8,070,845
Performance shares
New plans granted in 2020
Pursuant to an authorization granted by the General Meeting
of Shareholders held on May 22, 2018, the Board of Directors
decided on May 26, 2020 to grant 804,966 performance
shares (Plan 2020-A) to some employees and executives of
the Group and 300,000 performance shares (Plan 2020-B) to
Mr. Bernard Charlès, Vice-Chairman of the Board of Directors
and Chief Executive Officer as part of a plan of progressively
associating him with the Company’s capital implemented
since several years. Such shares shall be acquired as at
May 26, 2024. They shall be vested subject to the condition
that the beneficiary is an employee, an executive or a director
of the Group at the end of a presence period ending on May 26,
2023 and subject to the achievement of a condition based on
the Group’s non-IFRS diluted earnings per share growth.
The weighted average grant-date fair value of 2020-A and
2020-B performance shares was €58.42. It was estimated
based on the quoted price of Dassault Systèmes SE’s
common stock on the date of grant, assuming an expected
dividend yield of 0.53%, and adjusted to include the non-
vesting condition based on the non-IFRS diluted earnings
per share using a Monte-Carlo model. The model simulates
the performance of the non-IFRS diluted earnings per share
of the Group excluding foreign currency effects, assuming an
expected volatility of 8.22%.
Pursuant to an authorization granted by the General Meeting
of Shareholders held on May 22, 2018, the Board of Directors
decided on May 26, 2020 to grant 56,721 performance
shares (Plan 2020-M) to some employees and executives of
the Group. Such shares shall be acquired as at May 26, 2023.
None of the 2020-A and 2020-B beneficiaries are also a
2020-M plan beneficiary. They shall be vested subject to the
condition that the beneficiary is an employee or an executive
of the Group at the end of a presence period ending on
May 26, 2023 and subject to the achievement of a double
condition on the growth of the non-IFRS revenue and of the
non-IFRS operating margin of the MEDIDATA activity.
The weighted average grant-date fair value of 2020-M
performance shares was €141.26. It was estimated based on
the quoted price of Dassault Systèmes SE’s common stock
on the date of grant, assuming an expected dividend yield of
0.53% and an expected volatility of 8.22%.
Amendments to plans
On April 22, 2020, the Board of Directors amended the rules of
the 2019-A, 2019-B and 2019-A2 performance shares plans.
These plans were initially granted by the Board of Directors on
September 25, 2018 (2019-A and 2019-B plans) and July 1,
2019 (2019-A2 plan). The modifications were related to the
condition based on the Group non-IFRS diluted earnings per
share growth (non-vesting condition). As a consequence, the
incremental fair value measured at the date of modification is
recognized over the modified vesting period.
The incremental fair value at the date of modification was
€38.68. It included the non-vesting condition based on the
non-IFRS diluted earnings per share using a Monte-Carlo
model, with an expected volatility of 8.22%.
121
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
A summary of the Group’s performance shares plans is as follows:
Plans
2016-A
2016-B
2017-A
2017-B
2018-A
2018-B
2019-A
2019-B 2019-A2
2020-A
2020-B 2020-M
Date of General
Meeting of
Shareholders
Date of grant by Board
of Directors
Total number of shares
granted
Acquisition period
(in years)(1)
Performance
conditions
Performance
conditions is reached
at December 31, 2020
09/04/
2015
05/26/
2016
09/04/
2015
05/26/
2016
09/04/
2015
05/23/
2017
09/04/
2015
05/23/
2017
09/04/
2015
05/22/
2018
09/04/
2015
05/22/
2018
09/04/
2015
09/25/
2018
09/04/
2015
09/25/
2018
05/22/
2018
07/01/
2019
05/22/
2018
05/26/
2020
05/22/
2018
05/26/
2020
05/22/
2018
05/26/
2020
782,950
300,000
801,700
300,000 815,730 300,000 496,700 300,000 307,615 804,966 300,000
56,721
Two or
three(2)
See
Note(3)
Two or
three(2)
See
Note(3)
Three
Three
Three
Three
Three
years and
eight
months
Three
years and
eight
months
Two
years and
eleven
months
Four
Four
Three
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(5)
Yes
Yes
Yes
Yes
See
Note(6)
See
Note(6)
N/A
N/A
N/A
N/A
N/A
N/A
(1) For 2016-A, 2016-B and 2020-M plans, subject to the condition that the beneficiary be an employee or a Director of the Group at the acquisition date. For the 2017-A, 2017-B,
2018-A and 2018-B plans, the presence period was two years. The presence period is two years and eight months for 2019-A and 2019-B plans, around one year and eleven
months for 2019-A2 plan and three years for 2020-A and 2020-B plans.
(2) Share acquisition divided into two tranches, the first having vested on May 26, 2018 and the second having vested on May 26, 2019.
(3) Performance condition for the first tranche will be measured based on the average performance of two criteria: the growth of the non-IFRS diluted earnings per share of the Group
for the year 2017, excluding foreign currency effects, compared to the year 2015 (non-market condition), and the outperformance of the price of the Dassault Systèmes SE share
compared to the performance of the CAC 40 index between February 2016 and February 2018 (market condition). Such growth and outperformance must be at least equal to a
threshold established by the Board of Directors. Performance condition for the second tranche will be measured based on two cumulative criteria: the growth of the non-IFRS
diluted earnings per share of the Group for the year 2018, excluding foreign currency effects, compared to the year 2015 (non-market condition), and the outperformance of the
price of the Dassault Systèmes SE share compared to the performance of the CAC 40 index between February 2016 and February 2019 (market condition). Such growth and
outperformance must be at least equal to a threshold established by the Board of Directors. The 2016-B shares granted to Mr. Bernard Charlès, Vice-Chairman of the Board of
Directors and Chief Executive Officer, are also subject to an additional performance condition related to his variable compensation itself dependent on achieving performance criteria
previously established by the Board of Directors.
(4) For the 2017, 2018, 2019 and 2020 plans (2020-M excluded): performance condition based on a targeted growth between the non-IFRS diluted earnings per share of the Group
excluding foreign currency effects for the respective years 2019, 2020, 2021 and 2023, and the one achieved in the respective years 2016, 2017, 2018 and 2019 (non-vesting
condition). Such growth must be at least equal to a threshold (expressed as a percentage) established by the Board of Directors granting the shares.
(5) For the 2020-M plan, performance condition based on the growth of the non-IFRS revenue and of the non-IFRS operating margin of the MEDIDATA activity. This double condition
is based on targeted growths between the year 2022, excluding foreign currency effects, and the one achieved in the year 2019 (vesting condition).
(6) Performance condition will be measured by the March 18, 2021 Board of Directors.
Grant of rights to receive Dassault Systèmes SE shares
in replacement of rights to receive Medidata shares
As part of the acquisition of Medidata and subject to its closing,
the Board of Directors approved on June 11, 2019 the grant of
rights to receive Dassault Systèmes SE shares in replacement
of the rights to receive Medidata shares that had been granted
to some of its employees and executives. This grant amounts
to a maximum of 1,894,649 Dassault Systèmes SE shares
and will be definitively vested if the beneficiaries are still
employees upon the expiry of the vesting periods.
The weighted average vesting period of these shares is
1.41 year from the closing date of the acquisition of Medidata
and the last vesting date of these shares is September 2023.
The weighted average grant-date fair value of the Dassault
Systèmes SE shares was:
} €134.15 for equity awards which also gave right at vesting
date to all dividends paid during the vesting period;
} €132.80 for other equity awards.
Stock options
The main features of the Group stock option plans granted
before 2020 are as follows: options vest over various
periods ranging from one to four years, subject to continued
employment, options expire eight to ten years from grant
date, or after termination of employment or term of office,
whichever is earlier, options have generally been granted at an
exercise price equal to or greater than the grant date market
value of the Dassault Systèmes SE share.
122
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
New plans granted in 2020
Plan 2020-01
Pursuant to an authorization granted by the shareholders at
the General Meeting of Shareholders held on May 26, 2020,
the Board of Directors decided on May 26, 2020 to grant
1,490,316 options to subscribe to Dassault Systèmes SE
shares to certain employees and executives of the Group, at an
exercise price of €145.45 (Plan 2020-01) equal to the closing
value of the Dassault Systèmes SE share the day before
the grant.
Such options are divided in four tranches. They shall be vested
subject to the condition that the beneficiary is an employee
or an executive of the Group at the end of a presence period
of respectively one year (tranche 1), one year and a half
(tranche 2), two years and a half (tranche 3), and three years
and a half (tranche 4), and subject to the achievement of
certain performance conditions for the years 2020, 2021,
2022 and 2023 (non-market vesting condition for the tranche
1 and non-vesting condition for the tranches 2, 3 and 4).
The options expire ten years from grant date or in case of
termination of employment before the end of the presence
period.
The weighted average grant-date fair value of options granted
in 2020 was €16.57. It was estimated on the date of grant
using a Black-Scholes option pricing model. Assumptions
used are as follows: weighted-average expected life of around
6 years, expected volatility rate of 21.13%, expected dividend
yield of 0.53% and average risk-free interest rate of (0.34)%,
adjusted to include the non-vesting condition (for tranches 2,
3 and 4) using a Monte-Carlo model. The expected volatility
was determined using a combination of the historical volatility
of Dassault Systèmes SE’s stock and the implied volatility of
the Group’s exchange-traded options.
Plans 2020-M-01, 2020-M-02, 2020-M-03, 2020-M-04
The main features of the 2020-M-01, 2020-M-02, 2020-
M-03, 2020-M-04 are as follows: options shall be vested at
the end of an acquisition period of one to three years, subject
to the condition that the beneficiary be an employee or an
executive of the Group at the acquisition date and subject
to the achievement of a non-market performance objective
for the years 2020, 2021, and 2022. The options expire ten
years from grant date or upon termination of employment,
whichever is earlier, options have generally been granted at an
exercise price equal to or greater than the grant date (or the day
before the grant date), market value of the Group’s share. The
weighted average grant-date fair value of granted options was
estimated on the date of grant using a Black-Scholes option
pricing model. Assumptions used are as follows: weighted-
average expected life of around 6 years, expected volatility
rate of 21.13%, expected dividend yield of 0.53% and average
risk-free interest rate of (0.34)%. The expected volatility was
determined using a combination of the historical volatility of
Dassault Systèmes SE’s stock and the implied volatility of the
Group’s exchange-traded options.
Pursuant to an authorization granted by the shareholders at
the General Meeting of Shareholders held on May 23, 2019,
the Board of Directors decided on March 11, 2020 to grant
13,193 options to subscribe to Dassault Systèmes SE shares to
certain employees and executives of the Group, at an exercise
price of €131.00 (Plan 2020-M-01). The weighted average
grant-date fair value of 2020-M-01 options was €22.97.
Pursuant to an authorization granted by the shareholders
at the General Meeting of Shareholders held on May 26,
2020, the Board of Directors decided on May 26, 2020 to
grant 658,410 options to subscribe to Dassault Systèmes SE
shares to certain employees and executives of the Group, at
an exercise price of €145.45 (Plan 2020-M-02). The weighted
average grant-date fair value of 2020-M-02 options was
€23.80.
Pursuant to an authorization granted by the shareholders at
the General Meeting of Shareholders held on May 26, 2020,
the Board of Directors decided on September 23, 2020 to
grant 35,175 options to subscribe to Dassault Systèmes SE
shares to certain employees and executives of the Group, at
an exercise price of €157.85 (Plan 2020-M-03). The weighted
average grant-date fair value of 2020-M-03 options was
€23.80.
Pursuant to an authorization granted by the shareholders at
the General Meeting of Shareholders held on May 26, 2020,
the Board of Directors decided on December 4, 2020 to grant
11,409 options to subscribe to Dassault Systèmes SE shares to
certain employees and executives of the Group, at an exercise
price of €152.15 (Plan 2020-M-04). The weighted average
grant-date fair value of 2020-M-04 options was €23.80.
Amendments to plans
On April 22, 2020, the Board of Directors amended the rules
of the 2018-01, 2019-01 and 2020-M-01 stock option plans,
respectively granted by the Board of Directors on May 22,
2018 (2018-01 plan), July 1, 2019 (2019-01 plan) and
March 11, 2020 (2020-M-01 plan). The modification of the
non-market performance conditions (vesting conditions) did
not change significantly the amount of awards expected to
vest on these plans.
123
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
Other information related to the Group stock options
A summary of the Group’s stock option activity is as follows:
2020
2019
OUTSTANDING AS OF JANUARY 1,
Granted
Exercised
Forfeited
OUTSTANDING AS OF DECEMBER 31,
Exercisable
Weighted
average exercise
price
Number of
options
Weighted
average exercise
price
Number of
options
5,707,133
2,208,503
€102.28
5,689,320
145.60
1,632,374
(1,098,236)
83.05
(1,305,060)
(226,072)
6,591,328
2,898,530
127.96
(309,501)
€119.12
5,707,133
€94.11
2,407,856
€85.13
140.00
74.84
101.52
€102.28
€78.16
A summary of the remaining contractual life and the exercise price of options outstanding as of December 31, 2020 is presented
below:
Stock option plan
2014-01
2015-01
2016-01
2017-01
2018-01
2019-01
2020-01
2020-M-01
2020-M-02
2020-M-03
2020-M-04
OUTSTANDING AS OF DECEMBER 31,
Number of
options
Remaining
life (years)
Exercise price
25,627
302,668
457,412
874,773
1,345,945
1,442,863
1,463,171
13,193
619,092
35,175
11,409
6,591,328
1.40
4.68
5.40
6.39
7.39
8.50
9.40
9.19
9.40
9.73
9.93
7.87
€45.50
€62.00
€69.00
€82.00
€110.00
€140.00
€145.45
€131.00
€145.45
€157.85
€152.15
€119.12
Note 8 Other Operating Income and Expense, Net
Other operating income and expense, net are comprised of the following:
(in millions of euros)
Costs incurred in connection with voluntary early retirement plan(1)
Costs incurred in connection with relocation activities(2)
Impairment of acquired intangible assets
Restructuring costs and other(3)
Acquisition costs(4)
OTHER OPERATING INCOME AND EXPENSE, NET
Year ended December 31,
2020
€(33.5)
(9.6)
(7.3)
(4.6)
(0.9)
€(56.0)
2019
€(4.2)
(3.7)
-
(2.1)
(24.0)
€(34.1)
(1) The Group implemented a new voluntary early retirement plan over 3 years, effective in February 2020. This plan is accounted for as a post-employment benefit which estimated
costs are based on an assumption of expected proportion of employees to enter the plan and are accrued taking into account the employees estimated residual service period.
(2) Primarily composed of right-of-use impairments for vacant leasehold properties related to the reorganization of Medidata Solutions, Inc. premises in 2020 and other Group’s
premises in North America in 2019.
(3) Primarily related to redundancies costs in 2020 regarding restructuring plans at Medidata Solutions, Inc. and committed in 2019 following the Company’s decision to rationalize
its sales organization in Europe.
(4) In 2019, primarily corresponds to the direct costs incurred during the acquisition process of Medidata Solutions, Inc.
124
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
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, 2020 and 2019
are as follows:
(in millions of euros)
Interest income(1)
Interest expense(2)
INTEREST INCOME AND EXPENSE, NET
Foreign exchange losses, net
Other, net(3)
OTHER FINANCIAL INCOME AND EXPENSE, NET
Year ended December 31,
2020
€14.3
(37.2)
€(22.9)
(0.8)
0.4
€(0.4)
2019
€33.7
(25.2)
€8.5
(1.3)
(4.2)
€(5.4)
(1) Interest income is primarily composed of interests on cash, cash equivalents and short-term investments.
(2) Mainly includes:
(i)
(ii)
in 2020, interest expenses related to several financing operations as part of the acquisition of Medidata Solutions, Inc., including an interest expense of €8.3 million related to
the bond and €11.8 million related to the borrowings from banking institutions (see Note 20 Borrowings).
in 2019, an interest expense of €8.1 million due pursuant to two borrowings entered into in October 2015 for €650 million and in June 2013 for €350 million and fully repaid
in September and July 2019, respectively.
(iii) an interest expense related to lease liability for €16.1 million in 2020 and €14.8 million in 2019.
(3) In 2019, mainly includes the costs associated with the bridge loan’s commitment for the acquisition of Medidata Solutions, Inc., which was not used.
Note 10 Income Taxes
Deferred tax assets and liabilities are as follows:
(in millions of euros)
Provisions and other expenses
Profit-sharing and pension accruals
Net tax loss and tax credit carryforward assets
Amortization and basis difference
Amortization of acquired intangibles
Other
NET DEFERRED TAX LIABILITY
Deferred tax assets
Deferred tax liabilities
NET DEFERRED TAX LIABILITY
Year ended December 31,
2020
€167.8
48.5
90.8
75.6
(826.7)
(28.2)
2019
€173.4
40.8
134.4
37.2
(1,040.2)
(38.3)
€(472.2)
€(692.7)
153.1
(625.3)
137.4
(830.2)
€(472.2)
€(692.7)
125
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
Change in deferred taxes can be summarized as follows:
(in millions of euros)
NET DEFERRED TAX LIABILITY AS OF JANUARY 1,
Changes included in the income statement
Business combinations(1)
Other changes included in shareholders’ equity
Currency translation adjustments
NET DEFERRED TAX LIABILITY AS OF DECEMBER 31,
Year ended December 31,
2020
€(692.7)
95.7
67.0
8.4
49.4
2019
€(98.7)
88.7
(727.7)
38.4
6.5
€(472.2)
€(692.7)
(1) In 2020 includes the impact of the change in deferred tax rate that are expected to apply in the period in which the asset is realised or the liability is settled, mainly related to United
States based acquired assets (see Note 16 Business Combinations).
The components of income before income taxes are as follows:
(in millions of euros)
France
Foreign
INCOME BEFORE INCOME TAXES
The components of income tax expense are as follows:
(in millions of euros)
France
Foreign
CURRENT TAXES
France
Foreign
CHANGE IN DEFERRED TAXES
INCOME TAX EXPENSE
Year ended December 31,
2020
€382.4
263.9
€646.3
2019
€364.3
451.6
€815.9
Year ended December 31,
2020
2019
€(134.9)
€(125.3)
(121.6)
(256.6)
17.0
78.8
95.7
(173.1)
(298.3)
3.9
84.8
88.7
€(160.8)
€(209.6)
Differences between the income tax provision and the provision computed using the statutory French income tax rate are as
follows:
(in millions of euros)
Taxes computed at the statutory rate of 32.02% in 2020 (34.43% in 2019)
Foreign tax rate differentials(1)
R&D tax credit and other tax credits(2)
Income taxable at reduced rate(3)
Other tax effects, net(4)
INCOME TAX EXPENSE
EFFECTIVE TAX RATE
Year ended December 31,
2020
2019
€(207.0)
€(280.9)
41.8
21.5
46.6
(63.8)
€(160.8)
24.9%
58.5
13.6
55.4
(56.2)
€(209.6)
25.7%
(1) In 2020 and 2019, mainly includes tax rate differential with the United States tax rate of 21%.
(2) R&D tax credit and other tax credits derived mainly from research tax credits in France and in the United States.
(3) In 2020 and 2019, includes the favorable effect of recent French (Art. 238) and United States (FDII) legislation changes decreasing taxation of revenue from ownership of
intangibles.
(4) In 2020 and 2019, mainly includes tax impact in connection with provisions for tax risks and French Cotisation sur la valeur ajoutée des entreprises (“CVAE”).
At December 31, 2020, there were unrecognized tax losses and tax credit carried forward of €122.8 million, which are scheduled
to expire after 2026.
126
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
Note 11 Earnings per Share
Basic net income per share is determined by dividing net
income attributable to equity holders of the Group 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
Group 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.
The following table presents the calculation for both basic and diluted net income per share:
(in millions of euros, except shares and per share data)
Net income attributable to equity holders of the Group
Weighted average number of shares outstanding
Dilutive effect of share-based compensations
Diluted weighted average number of shares outstanding
Basic net income per share (in euros)
Diluted net income per share (in euros)
Year ended December 31,
2020
€491.0
2019
€615.3
260,445,255
259,397,967
3,728,150
3,800,928
264,173,405
263,198,895
€1.89
€1.86
€2.37
€2.34
Note 12 Cash and Cash Equivalents and Short-term Investments
Cash and cash equivalents are comprised of the following:
(in millions of euros)
Bank accounts
Cash equivalents
CASH AND CASH EQUIVALENTS
At December 31, 2020 and 2019, approximately 46% and
36% of cash and cash equivalents were denominated in
U.S. dollars respectively.
The short-term investments of €0.1 million and €0.7 million,
classified as Other current assets at December 31, 2020 and
2019 respectively, were primarily comprised of mutual funds
and fixed term deposits.
The investment rules are determined and controlled centrally
by the Group’s management. Cash, cash equivalents and
short-term investments are on deposit with high credit-quality
financial institutions, principally in Europe. The Group follows
a conservative policy in investing its cash resources, mostly
relying on short-term maturity investments.
Year ended December 31,
2020
€305.7
1,843.1
2019
€380.5
1,564.4
€2,148.9
€1,944.9
liquidity of
its financial
The Group has adopted policies regarding financial ratings
and spread of maturity dates in order to ensure the security
and
instruments. The Group’s
management oversees closely the quality of its investments
and the credit-worthiness of its counterparts and believes that
it has a minimal exposure to the risk of bankruptcy of anyone
of them. The Group also closely oversees the liquidity of its
financial assets held with these same counterparts. In this
regard, the Group follows in particular the financial rating of
each of its counterparties and, up to the present time, all of its
counterparties are rated within the Investment Grade category
by the rating agencies. As a result, the Group believes that it
has a very low exposure to credit or counterparty risk.
127
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
Note 13 Trade Accounts Receivable, Net, Contract Balances
and Other Current Assets
Trade accounts receivable and other current assets are measured at amortized cost.
Trade accounts receivable
(in millions of euros)
Trade accounts receivable
Allowance for trade accounts receivable
TOTAL TRADE ACCOUNTS RECEIVABLE, NET
The maturities of trade accounts receivable, net, were as follows:
(in millions of euros)
Trade accounts receivable past due at closing date:
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,
2020
2019
€1,277.5
€1,350.9
(48.4)
(31.7)
€1,229.1
€1,319.2
Year ended December 31,
2020
2019
€124.8
€173.9
22.9
45.9
193.6
1,035.5
34.9
45.6
254.4
1,064.8
€1,229.1
€1,319.2
The Group is not dependent on any of its principal clients. No
single customer or sales channel partner represented more
than 5% of the Group’s total revenue in 2020 and 2019.
In the context of the health crisis linked to the COVID-19
and its impact on the economic environment, the Group has
updated its assessment of customer risk in the context of the
signing of new contracts and of assessment for allowance of
customer accounts. In particular, the Group has strengthened
its comprehensive credit rating and monitoring system of its
customers and distributors.
Contract balances
(in millions of euros)
Contract assets
Contract liabilities
Year ended December 31,
2020
€27.0
2019
€26.9
€(1,169.1)
€(1,093.5)
The amount of the revenue recognized during 2020 which had
been deferred in the contract liabilities as at January 1, 2020 is
€833.2 million. The amount of the revenue recognized during
2019 which had been deferred in the contract liabilities as at
January 1, 2019 is €733.0 million.
The amount of the revenue recognized during 2020 and
2019 related to performance obligations satisfied (or partially
satisfied) in previous periods is €0.2 and €0.3 million
respectively.
During the reporting period the change in contract assets and
contract liabilities due to business combination is €(0.8) million
mainly related to the acquisitions of NuoDB, Inc. and
PROXEM SAS. In 2019, this change is €(59.8) million mainly
related to the acquisitions of Medidata Solutions, Inc. and
IQMS, LLC.
All contract assets recorded in the balance as of December 31,
2019 have been reclassified to receivables during 2020 since
the right to consideration became unconditional.
128
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
Remaining unsatisfied performance obligations
The amount of the remaining unsatisfied performance
obligations, as defined by IFRS 15, is the portion of the
transaction price from contracts with customers allocated to
performance obligations unsatisfied or partially satisfied as of
the closing date.
When applying the practical expedients permitted by IFRS 15
(right to exclude contracts with duration less than one year and
time and materials contracts), the amount of the remaining
unsatisfied performance obligations is €1,664.4 million as
of December 31, 2020. Due to the profile of contract terms,
approximately 49% of this amount is expected to be recognized
as revenue over the next year, approximately 51% thereafter.
As of December 31, 2019, the amount of the remaining
unsatisfied performance obligations is €1,398.3 million,
of which approximately 56% of this amount was expected
to be recognized as revenue over the following year and
approximately 44% thereafter. The increase in 2020 in the
remaining unsatisfied performance obligations is mainly in
relation to Medidata Solutions, Inc.
Other current assets
Other current assets are composed of the following:
(in millions of euros)
Prepaid expenses
Deferred sales compensation, current(1)
Value added tax
Derivatives, current(2)
Other
TOTAL OTHER CURRENT ASSETS
(1) See Note 2. Summary of Significant Accounting Policies.
(2) See Note 21. Derivatives and Currency and Interest Rate Risk Management.
Year ended December 31,
2020
€104.1
25.5
37.3
6.5
29.3
2019
€122.6
11.6
88.6
3.2
36.5
€202.7
€262.6
Note 14 Property and Equipment, Net
Property and equipment consist of the following:
(in millions of euros)
Right-of-use
Computer equipment
Office furniture and equipment
Leasehold improvements
Buildings
TOTAL
Year ended December 31, 2020
Year ended December 31, 2019
Accumulated
depreciation
and Impairment
€(170.8)
(228.9)
(47.5)
(90.0)
(3.8)
Gross
€734.5
345.1
75.3
194.8
52.4
Net
€563.7
116.2
27.8
104.9
48.6
Accumulated
depreciation and
Impairment
€(82.0)
(186.0)
(46.4)
(80.3)
(2.9)
Gross
€697.1
314.6
80.2
189.0
16.5
Net
€615.1
128.6
33.8
108.7
13.5
€1,402.1
€(541.0)
€861.1
€1,297.4
€(397.6)
€899.7
129
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
The change in the carrying amount of property and equipment as of December 31, 2020 is as follows:
(in millions of euros)
NET PROPERTY AND EQUIPMENT AS
OF DECEMBER 31, 2019
Additions
Business combinations
Other changes(2)
Depreciation and impairment for the
period(3)
Exchange differences
NET PROPERTY AND EQUIPMENT AS
OF DECEMBER 31, 2020
Right-of-use(1)
Computer
equipment
Office furniture
and equipment
Leasehold
improvements
Buildings
Total
€615.1
€128.6
53.0
0.8
17.1
(102.7)
(19.6)
50.3
0.1
(1.5)
(56.2)
(5.1)
€33.8
6.7
-
(0.8)
(10.1)
(2.0)
€108.7
22.9
0.1
(0.3)
(19.3)
(7.1)
€13.5
27.8
-
11.8
(1.2)
(3.4)
€899.7
160.8
1.0
26.3
(189.6)
(37.2)
€563.7
€116.2
€27.8
€104.9
€48.6
€861.1
(1) In 2020, the depreciation charge of right-of-use is €85.0 and €4.9 million for offices and vehicles respectively; as of December 31, 2020, the net book value of right-of-use is
€544.7 and €8.4 million for offices and vehicles respectively.
(2) Including a reclassification of €11.8 million from Other Non-Current Assets related to the prepayment made in 2019 on buildings acquisition.
(3) Including €(10.5) million of right-of-use impairments.
The change in the carrying amount of property and equipment as of December 31, 2019 is as follows:
(in millions of euros)
NET PROPERTY AND EQUIPMENT AS
OF DECEMBER 31, 2018
IFRS 16 first time application(1)
NET PROPERTY AND EQUIPMENT
ADJUSTED AS OF JANUARY 1, 2019
Additions
Business combinations
Other changes
Depreciation for the period
Exchange differences
NET PROPERTY AND EQUIPMENT AS
OF DECEMBER 31, 2019
Right-of-use(2)
Computer
equipment
Office furniture
and equipment
Leasehold
improvements
Buildings
Total
€-
391.8
€391.8
170.8
120.1
4.5
(74.4)
2.3
€96.8
-
€96.8
67.6
13.3
(2.2)
(47.6)
0.6
€14.5
-
€14.5
5.8
23.3
(3.9)
(5.9)
-
€62.7
(1.1)
€61.6
14.1
41.7
4.5
(13.7)
0.5
€4.2
-
€4.2
0.1
9.8
-
(0.6)
0.1
€178.2
390.7
€568.9
258.3
208.3
3.0
(142.2)
3.5
€615.1
€128.6
€33.8
€108.7
€13.5
€899.7
(1) The rights-of-use are related to offices for €382.4 million and vehicles for €9.4 million.
(2) In 2019, the depreciation charge of right-of-use is €67.0 and €7.4 million for offices and vehicles respectively; as of December 31, 2019, the net book value of right-of-use is
€601.4 and €13.7 million for offices and vehicles respectively.
130
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Note 15 Other Non-Current Assets
Other non-current assets consist of the following:
(in millions of euros)
Tax receivable(1)
Deferred sales compensation, non-current(2)
Investments in non-consolidated subsidiaries
Other
OTHER NON-CURRENT ASSETS
Financial statements
Consolidated Financial Statements
4
Year ended December 31,
2020
€144.9
43.4
28.7
35.4
2019
€123.1
36.1
54.8
35.5
€252.4
€249.5
(1) In 2020 and 2019, tax payments following tax reassessments which are disputed by the Group with the relevant authorities (see Note 25 Commitments and Contingencies).
(2) See Note 2 Summary of Significant Accounting Policies.
Note 16 Business Combinations
2020 acquisitions
NuoDB, Inc.
On December 10, 2020, the Group completed the acquisition
of NuoDB, Inc., a company in which the Group had a 16%
ownership interest. Founded in 2010 and headquartered
in Cambridge, Massachusetts, NuoDB,
Inc. provides a
cloud-native distributed SQL database that capitalizes on
the competitive advantages of the cloud, with on demand
scalability,
transactional
consistency, and is built for mission critical applications.
continuous
availability
and
The total acquisition price, including the fraction of capital
already held, amounted to €89.9 million.
The preliminary allocation of the purchase price resulted in
€31.8 million of goodwill. The primary items that generated
goodwill include mainly the value of the synergies between
NuoDB, Inc. and the Group’s activities.
PROXEM SAS
On June 9, 2020 the Group completed the acquisition of
100% of the capital of PROXEM SAS, a specialist in artificial
intelligence-based semantic processing software and services,
and provider of consumer experience analysis solutions.
The total acquisition price amounted to €21.2 million.
The preliminary allocation of the purchase price resulted in
€10.1 million of goodwill. The primary items that generated
goodwill include mainly the value of the synergies between
PROXEM SAS and the Group’s activities.
Purchase price allocation
The estimated fair values of assets acquired and liabilities
assumed in connection with the acquisitions presented below
are provisional. The Group is waiting for additional information
necessary to finalize these fair values and the provisional
measurements of fair value presented are subject to change.
The Group 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.
131
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
The purchase prices of NuoDB, Inc. and PROXEM SAS have been allocated to identifiable assets acquired and liabilities assumed,
based on estimated fair values at the date of the acquisition, as follows:
(in millions of euros)
Cash and cash equivalents
Other assets
Intangible assets acquired(1)
Other liabilities
Deferred taxes, net
TOTAL IDENTIFIABLE NET ASSETS
Goodwill
TOTAL PURCHASE PRICE
NuoDB, Inc.
PROXEM SAS
€3.3
2.0
54.0
(4.1)
2.9
€58.1
31.8
€89.9
€1.3
1.4
12.7
(1.8)
(2.5)
€11.1
10.1
€21.2
Total
€4.6
3.4
66.7
(5.9)
0.4
€69.2
41.9
€111.1
(1) Intangible assets acquired subject to amortization and included in the fair value of identifiable assets and liabilities are software.
The unaudited financial information presented in the table
below summarizes the combined results of operations for
the year ended December 31, 2020 as if the acquisitions
had occurred at the beginning of the period. This financial
information reflects the additional amortization expense
of acquired intangible assets, with the related tax effects,
assuming the fair value adjustments had been applied from
the beginning of the period and the elimination of the
intercompany transactions. This information is presented for
informational purposes and does not purport to be indicative
of the results that will be achieved in the future.
(in millions of euros)
Revenue
Net income
Year ended December 31, 2020
(unaudited)
€4,455.1
€468.4
In addition, the portion of acquired companies’ revenue and net income generated since the acquisition date and included in the
Group’s consolidated financial statements as of December 31, 2020 is as follows:
(in millions of euros)
Revenue
Net income
2019 acquisitions
Medidata Solutions, Inc.
In accordance with the terms of the agreement announced
on June 12, 2019, the Group finalized on October 28, 2019
the acquisition of the full capital of Medidata Solutions, Inc.
(“Medidata”), a leader of the digital transformation of the Life
Sciences industry and Pharmaceutical industry for clinical
development, commercial, and real-world data intelligence.
Medidata’s clinical expertise and cloud-based solutions power
the development and commercialization of smarter therapies
for 1,300 customers worldwide, including pharmaceutical
companies and biotechs, contract research organizations
(CROs), and medical centers. These solutions enable efficiency
and improve quality throughout clinical development programs
by enhancing decision-making, accelerating processes
execution and oversight, minimizing operational risk, reducing
costs and adapting trial strategies. Thirteen of the top fifteen
drugs sold in 2018 were powered by Medidata’s technology.
Eighteen of the top twenty-five pharmaceutical companies
Year ended December 31, 2020
€1.6
€(0.9)
and nine of the top ten CROs are Medidata customers.
Founded in 1999, Medidata is headquartered in New York
City, with sixteen offices across seven countries, notably
in the U.S., Japan, Korea, and the U.K., and counts around
2,200 employees as at December 31, 2019.
The total consideration transferred amounted €5,060.8 million
and includes (i) the payment in cash of the existing issued
shared at a price of $92.25 per share for a total amount of
€5,034.9 million, (ii) the right to receive a replacement award
for unvested shares at acquisition date (see the Note 7 Share-
based Compensations) which pre-acquisition fair value is
estimated at €121.0 million (iii) net of the gain related to the
hedging of €/$ risk for €(95.0) million.
The Group financed this acquisition notably by issuing a bond
for a total amount of €3,650.0 million and entering into two
term loans with banking establishment of €500.0 million and
$530.0 million (see Note 20 Borrowings).
The definitive allocation of the purchase price resulted in
€2,322.8 million of Goodwill. Goodwill represents mainly
132
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
the pipeline of future products in early stage research and
development at the acquisition date and the expected future
synergies between Medidata and the Group’s activities.
IQMS, LLC
On January 3, 2019, the Group completed the acquisition
of 100% of the capital of IQMS, LLC, a manufacturing ERP
software company, for a purchase price of €379.0 million.
The definitive allocation of the purchase price resulted in
€213.7 million of goodwill. The primary items that generated
goodwill include mainly the value of the synergies between
IQMS, LLC and the Group’s activities.
Other acquisitions
The Group completed its acquisition of 100% of Argosim SAS
on January 9, 2019, of Trace Software International’s
technological activities on March 29, 2019 and of 100% of
Distene SAS on December 19, 2019 for a total consideration
of €28.8 million.
The definitive allocation of the purchase prices resulted in a
€8.9 million goodwill.
Note 17 Intangible Assets, Net
Intangible assets consist of the following:
(in millions of euros)
Software
Customer relationships
Other intangible assets
TOTAL
Year ended December 31, 2020
Year ended December 31, 2019
Accumulated
amortization
and Impairment
Gross
Net
Gross
Accumulated
amortization
and Impairment
Net
€3,209.5
€(1,131.2)
€2,078.2
€3,354.3
€(913.1)
€2,441.1
2,218.9
169.7
(881.8)
(38.3)
1,337.1
131.4
2,390.0
186.9
(810.0)
(21.9)
1,580.0
165.0
€5,598.1
€(2,051.4)
€3,546.8
€5,931.2
€(1,745.1)
€4,186.1
The change in the carrying amount of intangible assets as of December 31, 2020 is as follows:
(in millions of euros)
NET INTANGIBLE ASSETS AS OF DECEMBER 31, 2019
Business combinations
Other additions
Amortization and impairment for the period*
Exchange differences and other changes
Software
€2,441.1
66.7
16.0
(272.8)
(172.8)
Customer
relationships
Other intangible
assets
Total intangible
assets
€1,580.0
€165.0
€4,186.1
0.2
0.8
(124.0)
(119.9)
-
0.7
(18.0)
(16.1)
66.9
17.5
(414.9)
(308.8)
NET INTANGIBLE ASSETS AS OF DECEMBER 31, 2020
€2,078.2
€1,337.1
€131.4
€3,546.8
*
Including €(7.3) million of other intangible assets impairment.
The change in the carrying amount of intangible assets as of December 31, 2019 is as follows:
(in millions of euros)
NET INTANGIBLE ASSETS AS OF DECEMBER 31, 2018
Business combinations
Other additions
Amortization and impairment for the period
Exchange differences and other changes
Software
€641.5
1,959.5
9.6
(154.6)
(14.9)
Customer
relationships
Other intangible
assets
Total intangible
assets
€482.6
1,197.5
0.1
(96.3)
(3.9)
€13.7
153.9
1.1
(2.9)
(0.7)
€1,137.8
3,310.8
10.8
(253.8)
(19.5)
NET INTANGIBLE ASSETS AS OF DECEMBER 31, 2019
€2,441.1
€1,580.0
€165.0
€4,186.1
133
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
Note 18 Goodwill
The change in the carrying amount of goodwill as of December 31, 2020 and 2019 is as follows:
(in millions of euros)
GOODWILL AS OF JANUARY 1,
Business combinations
Exchange differences
GOODWILL AS OF DECEMBER 31,
Year ended December 31,
2020
€4,730.9
(7.6)
(332.9)
2019
€2,124.5
2,599.6
6.7
€4,390.5
€4,730.9
The Group performed annual impairment tests in the fourth
quarter of 2020 and 2019.
For the purpose of the impairment test, the Group identified
12 cash-generating units (“CGUs”) or groups of CGUs as of
December 31, 2020, generally corresponding to the Group’s
main software product brands. Each CGU represents the
lowest level within the Group 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 millions of euros)
December 31,
2019
NuoDB, Inc.
Acquisition
PROXEM SAS
Acquisition
Other changes*
Exchange
differences
December 31,
2020
MEDIDATA SOLUTIONS INC.
€2,341.3
588.5
405.7
372.0
266.1
225.2
249.7
123.3
119.6
39.4
€-
-
-
31.8
-
-
-
-
-
-
€-
-
-
-
-
10.1
-
-
-
-
€(49.0)
€(193.7)
€2,098.6
-
-
(0.5)
-
-
-
-
-
-
(35.1)
(33.9)
(8.2)
(9.9)
(12.5)
(21.1)
(10.4)
(7.7)
(0.4)
553.4
371.9
395.2
256.2
222.8
228.6
112.9
111.8
39.0
SIMULIA
BIOVIA
CATIA
DELMIA**
ENOVIA***
SOLIDWORKS
CENTRIC PLM
GEOVIA
Other
TOTAL
€4,730.9
€31.8
€10.1
€(49.5)
€(332.9)
€4,390.5
Including adjustment made during the measurement-period on Medidata Solutions Inc.
Including QUINTIQ.
*
**
*** Including NETVIBES and EXALEAD.
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 62% of
the Group’s total goodwill as of December 31, 2020. 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. The pre-tax discount rates are
between 8.1% and 8.8%. 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, 2020, based on management estimates, the
Group concluded that the value in use of each CGU or groups of
CGUs 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 150
basis points in the pre-tax discount rate or a decrease of 100
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.
134
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Note 19 Other Liabilities
Other liabilities are comprised of the following:
(in millions of euros)
Value added tax and other taxes
Provisions, current(1)
Post-employment benefits(2)
Derivatives, current(3)
Lease liabilities, current
Other(4)
TOTAL OTHER CURRENT LIABILITIES
Post-employment benefits(2)
Provisions, non-current(1)
Employee profit sharing, non-current
Derivatives, non-current(3)
Lease liabilities, non-current
Uncertainty over Income tax treatments
Other(4)
Financial statements
Consolidated Financial Statements
4
Year ended December 31,
2020
€97.5
12.1
8.0
2.1
78.8
18.2
€216.7
€197.5
22.9
-
0.3
564.5
151.5
34.9
2019
€150.8
12.0
1.0
4.2
83.0
12.4
€263.3
€173.1
19.8
31.5
0.3
612.8
121.5
90.3
TOTAL OTHER NON-CURRENT LIABILITIES
€971.5
€1,049.2
(1) See reconciliation of provisions below.
(2) See Note 22 Post-employment Benefits.
(3) See Note 21 Derivatives and Currency and Interest Rate Risk Management.
(4) In 2019 and 2020, includes the put option debt on Centric Software Inc.’s minority interests.
The change in the carrying value of provisions as of December 31, 2020 is as follows:
(in millions of euros)
PROVISIONS AS OF DECEMBER 31, 2019
Additions
Utilization
Reversal of unused amounts
Business combinations
Exchange differences and other
PROVISIONS AS OF DECEMBER 31, 2020
Claims,
litigation
and other
€28.5
18.0
(8.9)
(3.6)
1.6
(2.7)
€32.8
Restructuring Total provisions
€3.3
1.2
(3.8)
(0.5)
-
1.9
€2.1
€31.8
19.3
(12.7)
(4.2)
1.6
(0.8)
€35.0
The maturity analysis of undiscounted lease liabilities payments as of December 31, 2020 is as follows:
(in millions of euros)
Total
Less than 1 year
1-3 years
3-5 years
More than
5 years
Lease liabilities – undiscounted cash flows
704.9
102.5
184.2
128.4
289.9
Payments due by period
135
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
The Group has chosen to apply two exemptions provided by IFRS 16 and to recognize as operating rent expense for leases with
a lease term no more than 12 months and for leases with underlying asset of low value. The related rents recognized in the
consolidated income statement is summarized below:
(in millions of euros)
Expenses relating to short-term leases
Expenses relating to leases of low-value assets
TOTAL
Note 20 Borrowings
Borrowings are comprised of the following:
(in millions of euros)
Term loans, current
Accrued interests
TOTAL BORROWINGS, CURRENT
Bond, non-current(1)
Term loans, non-current(2)
TOTAL BORROWINGS, NON-CURRENT
Year ended December 31,
2020
(5.4)
(0.6)
(6.0)
2019
(4.7)
(1.2)
(5.9)
Year ended December 31,
2020
€13.7
2.3
€16.0
3,631.6
542.7
2019
€-
4.4
€4.4
3,628.8
968.0
€4,174.3
€4,596.8
(1) As of December 31, 2020, the fair value is €3,709.2 million (level 1 of fair value hierarchy).
(2) As of December 31, 2020, the fair value is €553.4 million (level 2 of fair value hierarchy).
The change in borrowings as of December 31, 2020 is as follows:
(in millions of euros)
BORROWINGS AS OF DECEMBER 31, 2019
Issuance
Business combinaison
Reimbursement
Exchange differences
Other changes
BORROWINGS AS OF DECEMBER 31, 2020
Bond
€3,628.8
Term loans
€968.0
Accrued
interests
Total
€4.4
€4,601.2
-
-
-
-
2.8
€3,631.6
18.5
0.1
(400.9)
(0.5)
(28.8)
€556.4
-
-
-
-
(2.1)
€2.3
18.5
0.1
(400.9)
(0.5)
(28.1)
€4,190.4
The analysis of the borrowings as of December 31, 2020 by currency and nature of rate is as follows:
Total
Euros
€3,631.6
€3,631.6
556.4
2.3
299.5
1.9
Currency analysis and rate nature
Dollars
€-
243.6
0.4
Other
currencies
Fixed rate
Floating rate
€-
€3,631.6
13.3
-
13.7
1.7
€-
542.7
0.6
€4,190.4
€3,933.1
€244.0
€13.3
€3,647.0
€543.3
(in millions of euros)
Bond
Term loans
Accrued interests
TOTAL
136
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
The table below provides a breakdown of total borrowings by contractual maturity date as of December 31, 2020:
(in millions of euros)
Bond
Term loans
Accrued interests
TOTAL
Bond
Payments due by period
Total
Less than 1 year
€3,631.6
556.4
2.3
€-
13.7
2.3
1-5 years
€1,592.0
542.7
-
5-10 years
€2,039.7
-
-
€4,190.4
€16.0
€2,134.7
€2,039.7
On August 27, 2019, Standard & Poors Global Ratings assigned
to Dassault Systèmes SE and to its long term credit a rating of
“A-” with a stable outlook.
On September 16, 2019, the Group issued its four-tranche
fixed rate bond for a total of €3,650 million. This issuance was
part of the financing of the acquisition of Medidata Solutions,
Inc. completed in October 2019.
The conditions of the bond issue are as follows:
Bond
2022
2024
2026
2029
Nominal amount
(in millions
of euros)
Carrying amount
(in millions
of euros)
Maturity date
€900.0
700.0
900.0
€895.5
Sep 16, 2022
696.5
Sep 16, 2024
895.5
Sep 16, 2026
€1,150.0
€1,144.2
Sep 16, 2029
Coupon
0.000%
0.000%
0.125%
0.375%
The terms and conditions of this loan are detailed in the
transaction note having obtained the AMF visa n° 19-434
dated September 12, 2019.
Term loans
In connection with the acquisition of Medidata Solutions, Inc.,
the Group also subscribed in October 2019 a term loan for
€500.0 million bearing interest at Euribor 3 months +0.50%
per annum and a term loan for $530.0 million bearing interest
at Libor USD 3 months +0.60% per annum. Both loans have
a 5-year term.
On October 28, 2020, the Group redeemed early, as allowed by
the financing contract, part of its term loans for €200.0 million
and $230.0 million.
The Group’s financing contracts do not have commitments
such as “covenant ratios” linked to the change in the Group’s
rating. A lower credit rating would result in an increase
(capped) in the margins applicable to the credit facilities;
symmetrically, a higher rating would lead to a decrease in the
applicable margins (with a floor).
Line of credit
The Group received a financing commitment in the form of a
revolving line of credit of €750 million for a period of 5 years
from October 28, 2019. In May 2020, the Group exercised
its option to extend its term for one year, bringing the new
termination date to October 2025. As of December 31, 2020,
the line of credit was not drawn down.
137
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
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.
against the euro in 2020 and increased by approximately 5%
in 2019, resulting in a negative impact on the Group’s revenue
and operating income in 2020 and a positive impact in 2019.
All financial instruments are related to the foreign currency
hedging strategy of the Group and have maturity dates of less
than 2 years. Management believes that counter-party risk on
financial instruments is minimal since the Group deals with
major banks and financial institutions.
A description of market risks to which the Group is exposed to
is provided in paragraph 1.9.2 “Financial and Market Risks” of
the Universal registration document.
Foreign currency risk
The Group operates internationally and transacts in various
foreign currencies, primarily U.S. dollar and Japanese yen.
In 2020, revenue denominated in U.S. dollars represented
47.8% of the Group’s total revenue, compared with 40.2%
in 2019. Operating expenses denominated in U.S. dollars
represented 49.1% of the Group’s total operating expenses
in 2020, compared with 39.6% in 2019. This Group’s net
operating exposure to U.S. dollars amounted to €272.8 million
in 2020, so 6.1% of the Group’s total revenue. The average
value of the U.S. dollar decreased by approximately 2%
In 2020, revenue denominated in Japanese yens represented
9.8% of the Group’s total revenue, compared to 11.3% in
2019. Operating expenses denominated in Japanese yens
represented 3.3% of the Group’s total operating expenses in
2020 and 4.1% in 2019. This Group’s net operating exposure
to Japanese yen amounted to €311.0 million in 2020, so
7.0% of the Group’s total revenue, and this exposure was
in part hedged through market instruments at a level of
€232.5 million, as further described below. The average value
of the Japanese yen against the euro was flat in 2020, and
increased by approximately 7% in 2019, resulting in a limited
impact on the Group’s revenue and operating income in 2020
and a positive impact in 2019.
Consequently, the Group estimates that the sensitivity on
the operating income to a variation of +10% and -10% in
the exchange rate of the euro against the U.S. dollar would
have had an impact of €(24.8) and €30.3 million respectively.
In addition, the Group estimates that the sensitivity on the
operating income to a variation of +10% and -10% in the
exchange rate of euro against the Japanese yen would have
had an impact of €(28.3) and €34.6 million respectively.
The table below sets forth, for the year ended December 31, 2020, the value in euros of the Group’s revenue, operating expenses
and net position, before and after hedging, denominated in U.S. dollars, Japanese yens and other currencies (principally the euro):
(in millions of euros)
Revenue
Operating expenses
NET POSITION
Hedge
NET POSITION AFTER HEDGE
Year ended December 31, 2020
U.S. dollar
Japanese yen
Euro and other
currencies
€2,129.3
(1,856.6)
€272.8
(28.9)
€301.6
€436.2
(125.3)
€311.0
232.5
€78.5
€1,886.6
(1,800.7)
€85.9
34.5
€51.4
Total
€4,452.2
(3,782.5)
€669.7
238.2
€431.5
The Group usually hedges exchange rate risk related to its
revenues and expenses coming from usual and predictable
economic activity arising in the normal course of operations.
The Group 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 SE for its own account
and on behalf of its subsidiaries.
As part of the financing of the acquisition of Medidata
Solutions, Inc. shares in U.S. dollars, the Group hedged the
euro/U.S. dollar risk, using instruments contingent on the
closing of the acquisition. These hedges were undertaken with
four banks for a total of $4.2 billion with a possible maturity
date until January 13, 2020. On October 28, 2019, the date
of the completion of the acquisition of Medidata Solutions,
Inc., all hedges undertaken for this operation were drawn in
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
full and the gain was reclassified into goodwill (See Note 16
Business Combinations and Note 18 Goodwill).
the underlying exposure and highly effective in offsetting
underlying price movements.
To manage currency exposure, the Group generally uses
foreign exchange forward contracts. Except those indicated in
the table below, the derivative instruments held by the Group
are designated as cash flow hedges, with high correlation with
The effectiveness of forward contracts and currency options
is measured using forward rates and the forward value of the
underlying hedged transaction. During 2020 and 2019, the
ineffective portion of gains or losses from hedging instruments
excluded from the assessment of effectiveness portion was nil.
At December 31, 2020 and 2019, the fair value of instruments used to manage the currency exposure (excluding the net
investment hedge) was as follows:
(in millions of euros)
Forward exchange contract JPY/USD – sale(1)
Forward exchange contract JPY/EUR – sale(1)
Forward exchange contract EUR/INR – sale(1)
Forward exchange contract USD/INR – sale(1)
Forward exchange contract GBP/EUR – sale(1)
Forward exchange contract EUR/USD – sale(1)
Forward exchange contract CNY/EUR – sale(1)
Other instruments(2)
Year ended December 31,
2020
Nominal
amount
€73.0
Fair value
€(0.1)
63.8
47.0
31.8
22.5
9.0
3.1
30.4
4.7
(1.5)
0.8
0.7
-
-
(0.2)
2019
Nominal
amount
€83.7
143.0
23.9
30.9
54.6
42.0
35.2
35.9
Fair value
€1.9
(2.0)
0.9
0.1
(1.6)
(0.5)
-
-
(1) Instruments entered into by the Company to hedge the foreign currency exchange risk of forecasted royalty flows.
(2) Mainly derivatives not designated as hedging instruments. Changes in the derivatives’ fair value were recorded in other financial income and expense, net in the consolidated
income statement.
The Group also hedges its foreign exchange risk by designating
the term loan, issued by Dassault Systèmes SE, in U.S. dollar
at variable rate, as a net investment hedge for the acquisition
of Medidata Solutions, Inc. in the United States. In 2019, the
initial amount hedged was $530.0 million. In 2020, part of
this term loan has been redeemed early for $230.0 million
bringing back the nominal value of this term loan to
$300.0 million (See Note 20 Borrowings). Gains or losses
related to the effective portion of the net investment hedge,
which have been recognized directly in equity for €30.9 and
€6.3 million in 2020 and 2019 respectively, will be reclassified
in the income statement in the event of the disposal of the net
investment. During 2020 and 2019, the ineffective portion
of gains or losses from hedging instruments excluded from
the assessment of effectiveness portion was nil (See Note 2
Summary of Significant Accounting Policies).
Interest rate risk
Except for their impact on the general economic environment,
which is difficult to quantify, the Group believes that changes
in interest rates in 2020 did not materially affect its business
and earnings before financial income (loss), net and that
it would be the same in the future. Therefore, the Group’s
interest rate risk is primarily a risk related to a reduction of
financial revenue.
In October 2015, the Group entered into interest rate swap
agreements for a total amount of €650.0 million with the
objective of modifying forecasted interest obligations relating
to the €650.0 million French term loan facility so that the
interest payable effectively becomes fixed at 0.72% from
October 2015 until October 2020.
In July 2013 and October 2014, the Group entered into interest
rate swap agreements for a total amount of €350.0 million
that have the economic effect of modifying forecasted interest
obligations relating to the €350.0 million French term loan
facility so that the interest payable effectively becomes fixed
at 1.48% from June 2014 until June 2018 and 1.04% from
June 2018 until July 2019.
At December 31, 2019, all interest rate swaps were unwound
following the repayment of the two borrowings of €650.0 and
€350.0 million on September and July 2019, respectively.
As part of the financing of the acquisition of Medidata
Solutions, Inc., the Group subscribed, in October 2019,
a term loan for €500.0 million bearing interest rate at
Euribor 3 months +0.50% per annum and a term loan for
139
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
$530.0 million bearing interest rate at Libor USD 3 months
+0.60% per annum. In October 2020, part of these term loans
has been redeemed early for €200.0 million for the term loan
subscribed in euros, and for $230.0 million for the term loan
subscribed in U.S. dollar (See Note 20 Borrowings). These
borrowings were not subject to interest rate swaps. With all
other variables held constant, an increase in interest rates of
100 basis points would have generated an annual interest
expense €7.1 million higher in 2020, while a decrease in rates
of 100 basis points would have lowered the annual interest
expense by €2.8 million.
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, 2020,
investments
cash and cash equivalents and short-term
totaled €2,148.9 million, including €378.3 million sensitive
to fluctuations in interest rates. With all other variables held
constant, an increase in interest rates of 100 basis points
would have had a positive impact in 2020 of €3.8 million on
financial income and a decrease in interest rates of 100 basis
points would have had a negative impact of €3.8 million.
Note 22 Post-employment Benefits
Contributions made to defined contribution plans were €39.9
and €29.0 million in 2020 and 2019 respectively.
The Group provides defined benefit retirement indemnities to
the employees of its French operations. The Group 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.
The Group has implemented for the main French companies a
new voluntary early retirement plan over three years, effective
in February 2020. This plan allows eligible employees to retire
fully or partially in advance while receiving a replacement
income in the form of an allowance and maintain a social
protection system. This plan is accounted for as a post-
employment benefit which estimated costs are based on an
assumption of expected proportion of employees to enter
the plan and are accrued taking into account the employees
estimated residual service period.
The projected benefit obligation was determined using the prospective method, based on the following assumptions:
Assumptions
Assumptions used to determine the benefit obligation are as follows:
Discount rate
Year ended December 31, 2020
Year ended December 31, 2019
Europe
Asia
Europe
Asia
0.80%* 1.00% – 2.10%
0.90%* 0.50% – 2.40%
Average rate of compensation increase
1.80% – 2.60% 2.50% – 5.00% 2.50% – 2.80% 2.50% – 5.00%
*
Except for the voluntary early retirement plan implemented for French companies.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Components of net periodic benefit cost
The components of net periodic benefit cost were as follows:
(in millions of euros)
Service cost(1)
Interest cost on benefit obligations
Interest income on plan assets
Other(2)
NET PERIODIC BENEFIT COST
Financial statements
Consolidated Financial Statements
4
Year ended December 31,
2020
€(43.6)
(2.0)
0.4
0.2
2019
€(11.4)
(3.0)
0.7
2.9
€(45.1)
€(10.9)
(1) In 2020 and in 2019, includes service costs related to the voluntary early retirement plan implemented for French companies for €(11.5) and €(1.6) million respectively.
(2) In 2019, includes €3.2 million related to the end of the American defined-benefit pension plan.
Obligations and funded status
Changes in benefit obligations and plan assets are as follows:
(in millions of euros)
Benefit obligations at beginning of year
Service cost
Interest cost on benefit obligations
Remeasurement(1)
Benefits paid
Exchange rate differences and other changes(2)
BENEFIT OBLIGATIONS AT END OF YEAR
Fair value of plan assets at beginning of year
Employer contribution
Interest income and return on plan assets
Benefits paid
Remeasurement
Exchange rate differences and other changes(2)
FAIR VALUE OF PLAN ASSETS AT END OF YEAR
NET DEFINED BENEFIT LIABILITY
Year ended December 31,
2020
€213.7
43.6
2.0
(5.2)
(7.3)
(4.0)
€242.9
39.7
(1.3)
0.4
(1.0)
(0.3)
-
€37.4
2019
€238.7
11.4
3.6
37.1
(14.5)
(62.6)
€213.7
91.2
(1.3)
1.3
(1.8)
0.9
(50.5)
€39.7
€(205.5)
€(174.0)
(1) Remeasurement gains and losses mainly arise from changes in financial assumptions. A decrease of 150 basis points in the discount rates would increase the obligation by
€54.2 million.
(2) In 2020 and in 2019, includes the reclassification of the voluntary early retirement plans implemented for French companies in Accrued compensation and other personnel costs
for €3.9 million and €15.7 million respectively. In 2019, also includes the end of the American defined-benefit pension plan for €(3.2) million.
The benefit obligation by geographical location is as follows:
Europe
Asia
TOTAL BENEFIT OBLIGATIONS
The fair value of plan assets is fully allocated in Europe.
Year ended December 31,
2020
87%
13%
100%
2019
86%
14%
100%
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DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
Plan assets
The weighted average asset allocations are as follows:
Debt instruments
Equity instruments
Other
TOTAL
Average duration
The average duration of the main entities in each country is as follow:
(in years)
2020
2019
Cash flows
Year ended December 31,
2020
83%
6%
11%
100%
2019
84%
7%
10%
100%
France
10.8
14.9
Korea
7.4
6.6
Japan
7.5
7.9
Germany
15.8
16.6
The Group does not expect to make any additional contributions to the hedge funds related to its pension plans in 2021.
The planned payments to the beneficiaries for future periods are presented in the following table:
Total
€16.0
17.0
19.3
15.0
12.3
68.4
(in millions of euros)
2021
2022
2023
2024
2025
2026-2030
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
Note 23 Shareholders’ Equity
Shareholders’ equity activity
As of December 31, 2020, Dassault Systèmes SE had 265,136,237 common shares issued with a nominal value of €0.50
per share.
Changes in shares outstanding are as follows:
(in number of shares)
SHARES ISSUED AS OF JANUARY 1,
Exercise of stock options
SHARES ISSUED AS OF DECEMBER 31,
Treasury stock as of December 31,
SHARES OUTSTANDING AS OF DECEMBER 31,
The primary objective of the Group’s capital management is
to ensure that it maintains a strong credit rating and healthy
capital ratios in order to support its capital market access and
for the purpose of increasing the profitability of shareholders’
equity and earnings per share. The Group manages its capital
structure and adjusts it in light of changes in economic
conditions. To maintain or adjust the capital structure, the
Group 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, 2020 and 2019.
Dividend rights
Dassault Systèmes SE 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 €13.2 and
€13.1 million as of December 31, 2020 and 2019, 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 SE.
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 Group 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 millions of euros)
HEDGING RESERVES:
Gains (Losses) arising during the year
Less: (losses) gains reclassified to the income statement
Year ended December 31,
2020
2019
264,038,001
262,732,941
1,098,236
1,305,060
265,136,237
264,038,001
(4,059,939)
(4,576,358)
261,076,298
259,461,643
Following the May 2020 and May 2019 Shareholders’
Meetings, a cash dividend of €182.5 and €168.8 million for
the year ended December 31, 2019 and 2018 respectively has
been distributed in 2020 and in 2019.
Dividends per share were €0.70 and €0.65 as of December 31,
2019 and 2018, respectively.
No dividend was paid to non-controlling interest in 2020
and 2019.
Stock repurchase programs
The General Meeting of Shareholders of May 26, 2020
authorized the Board of Directors to implement a share
repurchase program
limited to 5,000,000 of Dassault
Systèmes’ shares. Under this authorization, the Company may
not buy shares above a maximum annual aggregate amount of
€800 million.
The Group signed a liquidity agreement for an initial period
until December 31, 2015, automatically renewable for
subsequent 12-month terms. On December 31, 2020,
934,946 shares were acquired, at an average price of €146.97,
and 945,837 shares were sold, at an average price of €148.18.
Furthermore, the Group signed a liquidity agreement on
December 11, 2020 for a period covering from December 14,
2020 to February 4, 2021. On December 31, 2020, no share
was acquired.
Year ended December 31,
2020
€33.7
(2.3)
€36.0
2019
€1.1
(5.3)
€6.4
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DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
Note 24 Consolidated Statements of Cash Flows
Adjustments for non-cash items consist of the following:
(in millions of euros)
Depreciation and impairment of property and equipment
Amortization and impairment of intangible assets
Non-cash share-based compensations expense
Deferred taxes
Other(1)
Note
14
17
6, 7
10
Year ended December 31,
2020
€189.6
414.9
178.3
(95.7)
55.4
2019
€142.2
253.8
116.5
(88.7)
39.0
ADJUSTMENTS FOR NON-CASH ITEMS
€742.5
€462.8
(1) In 2020 and 2019 includes provisions for tax risks impact (see Note 10 Income Taxes).
Changes in operating assets and liabilities consist of the following:
(in millions of euros)
Decrease (increase) in trade accounts receivable and contract assets
(Decrease) increase in accounts payable
(Decrease) increase in accrued compensation
(Decrease) increase in income tax payable
Increase in contract liabilities
Changes in other assets and liabilities
CHANGES IN OPERATING ASSETS AND LIABILITIES
Other information:
Year ended December 31,
2020
€16.5
(36.4)
(24.4)
(113.9)
141.8
29.7
€13.3
2019
€(41.9)
26.0
9.4
52.9
109.2
(38.6)
€117.0
In 2020, the acquisition of non-controlling interests corresponds to the acquisition for €5.2 million of the shares of Outscale SAS
not previously held by the Group. After this transaction, the Group holds a 100% stake in this company.
Note 25 Commitments and Contingencies
Litigation and other proceedings
The Group is involved in litigation and other proceedings, such
as civil, commercial and tax proceedings, incidental to normal
operations.
The Group is subject to ongoing tax audits and tax reassessments
in jurisdictions in which it has or had operations. Certain of
these reassessments, in particular those related to acquisition
financing, are being challenged by the Group 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 Group has made payments to the French tax
authorities for a total amount of €144.9 million from 2014 to
2020, but has disputed them with the relevant authorities. In
June 2019, following the decision of the Appeal Court during
the second quarter of 2019, the Group lodged an Appeal in
Cassation before the High Court (or Supreme Court) in relation
to this dispute. The High Court has denied the Court of Appeal
decision and referred the litigation to a new Chamber of the
Appeal Court.
It is not possible to determine with certainty the outcome of
the dispute and notably the resulting expense for the Group,
if any. The total amount paid to the tax authorities represents
the current Group’s maximum exposure. However, in the
opinion of management, after consultation with its lawyers,
the resolution of such litigation and proceedings should not
have a material effect on the consolidated financial statements
of the Group.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
Future lease commitments
In December 2019, the Group signed a new lease contract
for a fixed term of 10 years from the delivery of an additional
building for its Vélizy-Villacoublay campus of approximately
28,000 square meters of office space, scheduled to be delivered
during the second quarter of 2023. The minimum future
lease payments over the lease term amount to approximately
€81.1 million.
Medidata signed in December 2018 a new lease contracts for
additional office space in Boston scheduled to be delivered
during 2021. The minimum future lease payments amount to
approximately $19.7 million.
In accordance with IFRS 16, the right-of-use assets and the
lease liabilities will be recognized upon the delivery of the new
offices.
Bank guarantees
The Group has a central cash management operated by a
banking institution. In this context, the parent company of
the bank offered a guarantee to the Group in the amount
of $500 million, and at the same time the Group offered a
guarantee to the bank for the same amount.
Note 26 Related-Party Transactions
Compensation of key management personnel
The table below summarizes compensation granted to the members of the Group’s Executive team and to the Chairman of the
Board of Directors in 2020 and 2019:
(in millions of euros)
Short-term benefits(1)
Share-based compensation(2)
COMPENSATION OF KEY MANAGEMENT PERSONNEL
Year ended December 31,
2020
€10.5
45.2
€55.7
2019
€9.4
40.9
€50.4
(1) Including gross salaries, bonus, incentives, profit-sharing, directors’ fees and fringe benefits paid.
(2) Expense recorded in the income statement for share-based compensations (stock options and performance shares). In 2020, includes the expense related to the amendment of the
rules of the 2019-A, 2019-B and 2019-A2 performance shares plans (see Note 7 Share-based Compensations).
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
Dassault Systèmes SE has a normal parent-company
relationship with its subsidiaries. The main characteristics
of this relationship are presented in Dassault Systèmes SE’s
financial statements, in chapter 4.2.
Dassault Systèmes SE licenses its products for internal use
to Dassault Aviation SA, a sister company to the Company.
The Chairman of Dassault Systèmes SE is, since May 29,
2018, the Chairman of Groupe Industriel Marcel Dassault SAS
(of which he was Chief Executive Officer until that date),
which controls Dassault Aviation SA. Dassault Aviation SA and
its subsidiaries license the Company’s products on commercial
terms consistent with those granted to the Company’s
other customers of similar size. These licenses generated
€23.5 million and €25.4 million of software revenue for the
years ended December 31, 2020 and 2019, respectively.
Such activity generated service revenues of €13.3 million
and €11.1 million in the years ended December 31, 2020
and 2019, respectively. The balances of trade accounts
receivable with Dassault Aviation SA and its subsidiaries were
€19.4 million, and €13.9 million at December 31, 2020 and
2019, respectively.
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DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
Note 27 Principal Statutory Auditors’ Fees and Services
The following table presents the amount of fees paid to each of the Group’s principal Statutory Auditors in 2020 and 2019:
(in millions of euros, excluding VAT)
2020
2019
2020
2019
2020
2019
2020
2019
PricewaterhouseCoopers Audit
EY
Amount
%
Amount
%
Certification of accounts
Audit opinion, review of statutory
and consolidated financial statements(1):
} issuer
} other consolidated subsidiaries
SUBTOTAL
Other services
Other audit-related services(2):
} issuer
} other consolidated subsidiaries
Other services (legal, tax, social)(3):
} issuer
} other consolidated subsidiaries
SUBTOTAL
TOTAL
€0.7
1.8
2.6
€0.8
1.5
2.3
-
0.1
0.1
0.8
0.9
-
0.9
-
0.2
1.1
21%
53%
75%
-
2%
2%
22%
25%
€3.4
€3.4
100%
23%
44%
67%
-
26%
1%
6%
33%
100%
€0.5
0.8
1.2
€0.4
0.6
1.0
-
-
0.1
0.2
0.2
-
-
0.1
0.2
0.2
30%
53%
84%
-
-
4%
12%
16%
34%
48%
82%
-
-
6%
12%
18%
€1.5
€1.3
100%
100%
(1) Audit opinion, review of statutory and consolidated financial statements for the years ended December 31, 2020 and 2019 include the Group audit, statutory audits, consents,
attest services of Dassault Systèmes SE’s and its subsidiaries’ financial statements, 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 Group’s financial
statements and include due diligence services related to acquisitions, consultations concerning financial accounting and reporting standards, and attestation services not required
by statute or regulation.
(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.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Consolidated Financial Statements
4
Note 28 Principal Dassault Systèmes Companies
The principal Dassault Systèmes SE subsidiaries included in the scope of consolidation as at December 31, 2020 are as follows:
Country
France
France
Germany
Germany
Consolidated companies
Dassault Data Services SAS
Outscale SAS
Dassault Systèmes Deutschland GmbH
Dassault Systèmes 3DExcite GmbH
Netherlands
Dassault Systèmes B.V.
Italy
Sweden
United Kingdom
United Kingdom
Switzerland
Canada
United States
United States
United States
United States
United States
United States
United States
United States
United States
China
India
India
Dassault Systèmes Italia Srl
Dassault Systèmes AB
Dassault Systèmes UK Limited
MDSOL Europe Limited
Dassault Systèmes (Suisse) SA
Dassault Systèmes Canada Inc.
Centric Software, Inc.
Dassault Systèmes Americas Corp.
Dassault Systèmes Corp.
Dassault Systèmes Simulia Corp.
Dassault Systèmes SolidWorks Corporation
Medidata Solutions, Inc.
No Magic, Inc.
Spatial Corp.
DS Government Solutions Corp.
Dassault Systèmes (Shanghai) Information Technology Co., Ltd.
Dassault Systèmes Solutions Lab Private Limited
Dassault Systèmes India Private Limited
South Korea
Dassault Systèmes Korea Corp.
Japan
Japan
Singapore
Australia
Malaysia
Dassault Systèmes K.K.
SolidWorks Japan K.K.
Dassault Systèmes Singapore Pte. Ltd.
Dassault Systèmes Australia Pty Ltd
Dassault Systèmes Innovation Technologies Malaysia Sdn.Bhd
% of Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
63.19%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
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DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
4.1.2 Statutory Auditors’ Report 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 readers. This report includes information specifically required by European regulations or French law, such
as information about the appointment of Statutory Auditors. 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 of Dassault Systèmes SE,
Opinion
In compliance with the engagement entrusted to us by your General Meeting of Shareholders, we have audited the accompanying
consolidated financial statements of Dassault Systèmes SE for the year ended December 31, 2020.
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 at December 31, 2020 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.
The audit opinion expressed above is consistent with our report to the Audit Committee.
Basis for opinion
Audit framework
We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under these standards are further described in the “Responsibilities of the Statutory Auditors relating to the
audit of the consolidated financial statements” section of our report.
Independence
We conducted our audit engagement in compliance with the independence rules provided for in the French Commercial Code
(Code de commerce) and the French Code of Ethics (Code de déontologie) for Statutory Auditors for the period from January 1,
2020 to the date of our report, and, in particular, we did not provide any non-audit services prohibited by Article 5(1) of Regulation
(EU) No 537/2014.
Justification of assessments - Key audit matters
Due to the global crisis related to the Covid-19 pandemic, the consolidated financial statements of this period have been prepared
and audited under specific conditions. Indeed, this crisis and the exceptional measures taken in the context of the state of sanitary
emergency have had numerous consequences for companies, particularly on their operations and their financing, and have led to
greater uncertainties on their future prospects. Those measures, such as travel restrictions and remote working, have also had an
impact on the companies’ internal organization and the performance of the audits.
It is in this complex and evolving context that, in accordance with the requirements of Articles L. 823-9 and R. 823-7 of the
French Commercial Code relating to the justification of our assessments, we inform you of the key audit matters relating to the
risks of material misstatement that, in our professional judgment, were the most significant in our audit of the consolidated
financial statements, as well as how we addressed those risks.
These matters were addressed as part of our audit of the consolidated financial statements as a whole, and therefore contributed
to the opinion we formed as expressed above. We do not provide a separate opinion on specific items of the consolidated financial
statements.
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Consolidated Financial Statements
4
Recognition of revenue from complex contractual arrangements
Description of risk
As described in the section entitled “Revenue recognition” of Note 2 “Summary of Significant Accounting Policies” to the
consolidated financial statements, the Group derives revenue from multiple sources, chief among them software licenses,
subscriptions, support and services.
Where contractual arrangements include multiple elements sold as a single package, determining the date of recognition of the
resulting revenue and how that revenue should be allocated between the various performance obligations can be difficult and can
require a significant degree of judgment from management.
The revenue for each element of the complex contractual arrangements is allocated to each distinct performance obligation
based on their stand-alone selling price. With respect to perpetual software licenses only sold bundled with one year of support,
the stand-alone selling price is determined using the residual approach. Allocating revenue between the various performance
obligations requires analyses by management and, potentially, adjustments, both of which can be complex.
In addition, when a software license sale is combined with a service deemed essential to the functionality of the software, the
two performance obligations (software and service) are not distinct. Therefore, the license revenue is recognized as and when
the service obligation is recognized. Determining whether or not a service is essential to the functionality of a product requires
significant judgement from management, as does analyzing the potential future profits to be gained from the corresponding
long-term contract.
Moreover, recognizing revenue from complex contractual arrangements typically requires an in-depth analysis of contractual
terms and conditions, together with other relevant documentation shared with customers during negotiations, with a view to
ascertaining the full scope and type of the elements the Group has committed to providing and thus recognizing the revenue for
each element on the appropriate date and at the appropriate value.
For the above reasons, we deemed the recognition of revenue from complex contractual arrangements to be a key audit matter.
How our audit addressed this risk
In the course of our audit, we gained an understanding of internal control systems relating to the recognition of revenue that
were implemented by the Group within its main shared services centers worldwide and tested the key controls relating to these
systems that we considered to be the most relevant.
Throughout the year, we performed analyses on all complex contractual arrangements deemed material, as well as on a sample
of randomly selected arrangements, with the aim of verifying that management’s judgments in terms of the allocation of
revenue between each performance obligation were consistent with the Group’s accounting policies, and that revenue had
been recognized for the correct amount and with respect to the appropriate reporting period. Our work consisted primarily in
analyzing the contractual terms and conditions, re-calculating the stand-alone selling price of each element tested, analyzing
the essentiality criteria for services associated with software sales and verifying the consistency of revenue recognition with the
Group’s accounting policies and IFRS as adopted by the European Union.
We also tested all significant manual accounting entries affecting revenue from complex contractual arrangements for consistency
with the Group’s accounting policies.
Lastly, we examined the related disclosures provided in Notes 2 and 4 to the consolidated financial statements.
Business combinations and impairment of goodwill and non-current intangible assets
Description of risk
Each year, the Group undertakes selected key acquisitions. In this respect, as described in the section entitled “Business
combinations and goodwill” of Note 2 “Summary of Significant Accounting Policies” to the consolidated financial statements,
the identifiable assets, liabilities and contingent liabilities of the newly acquired entities are recognized at their fair value. The
excess of the price of the acquisition over the fair value of the net acquired assets is recorded as goodwill.
At December 31, 2020, the Group’s non-current assets included goodwill for €4,390.5 million, software for €2,078.2 million and
customer relationships for €1,337.1 million. These amounts derive mainly from business combinations and primarily include the
impacts of the Medidata Solutions Inc. acquisition, completed on October 28, 2019 for an acquisition price of €5,060.8 million.
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Consolidated Financial Statements
In accordance with IAS 36, the aforementioned entries are tested for impairment at least annually, or whenever an indication of
impairment is identified.
Given (i) the materiality of the amounts in question in the Group’s financial statements and (ii) the measurement methods used in
acquisitions and in annual impairment tests, which rely in particular on projected future cash flows, we deemed the measurement
of non-current assets to be a key audit matter. In order to implement the aforementioned measurement methods, management
must rely on assumptions and make estimates. Regarding the specific matter of recently acquired companies, the degree of
judgment involved in projecting future cash flows is even more significant as projections cannot necessarily be compared with
historical data from these companies.
How our audit addressed this risk
For each acquisition, we examined the methods used to identify and measure the assets acquired and liabilities assumed and to
implement the annual impairment tests of the related goodwill.
Our procedures consisted in taking note of the measurement methods applied by the Group as well as the main assumptions and
estimates used, particularly in terms of future cash flows, long-term growth rates and discount rates. We also compared the initial
cash flow forecasts with actual cash flows.
In addition, with the assistance of our valuation experts, we carried out our own sensitivity analyses to supplement our assessment
of the key assumptions and inputs used.
Lastly, we examined the related disclosures provided in Notes 2, 16 and 18 to the consolidated financial statements.
Tax risks
Description of risk
The Group carries out its business activities in many countries and must therefore abide by multiple different laws and regulations.
This is particularly the case for tax regulations, which can be a source of risk for the Group in terms of how they are applied and
that may involve tax disputes.
The Group assesses its tax positions and their technical justifications at the end of each reporting period. Where a risk in terms
of how the local tax rules should be applied is identified, the Group measures and records a provision for tax risk if an outflow of
resources appears likely. Conversely, when it makes a payment further to a disputed tax reassessment and where it deems its
position in that dispute to be technically justified, the Group simultaneously records a tax credit for the refund it will likely receive.
As it relates to the ongoing tax disputes, some concern tax reassessments relating to acquisition financing. Accordingly, between
2014 and 2020, the Group made payments totaling €144.9 million to the French tax authorities further to adjustments of the
tax bases for the relevant years audited, as described in Note 25 to the consolidated financial statements, and generated a tax
credit for the same amount, as indicated in Note 15 to the consolidated financial statements. In this case, there is a risk that the
tax credit will not be recovered.
Given (i) the materiality of the ongoing tax disputes and (ii) the complex technical analyses required for their assessment, we
deemed the assessment of tax risks to be a key audit matter. These analyses are specific to each tax jurisdiction and require a
significant degree of judgment from management. Moreover, they are ultimately subject to a final decision from the local tax
authorities concerned.
How our audit addressed this risk
With guidance from experts in international and French tax law, we examined the main grounds for reassessment cited by the local
tax authorities against the Group, as well as the judgments made by management with respect to tax risks and disputes deemed
significant. We also reconciled the assumptions and estimates used to recognize tax provisions with the Group’s accounting
policies and IFRS as adopted by the European Union.
For the most significant disputes for which a tax credit was recognized, in particular the reassessments relating to the above-
mentioned acquisition financing matter, we also analyzed the technical opinions obtained by the Group from independent
tax lawyers with a view to assessing the consistency thereof with the judgments made by management and the accounting
treatments applied.
Lastly, we examined the related disclosures provided in Notes 15 and 25 to the consolidated financial statements.
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Consolidated Financial Statements
4
Specific verifications
As required by legal and regulatory provisions and in accordance with professional standards applicable in France, we have also
verified the information pertaining to the Group presented in the Board of Directors’ management report.
We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.
We attest that the information pertaining to the Group presented in the management report includes the consolidated non- financial
information statement required under Article L. 225-102-1 of the French Commercial Code. However, in accordance with Article
L. 823-10 of the French Commercial Code, we have not verified the fair presentation and consistency with the consolidated
financial statements of the information given in that statement, which will be the subject of a report by an independent third
party.
Other verifications and information pursuant to legal and regulatory requirements
Presentation of the consolidated financial statements to be included in the annual financial report
In accordance with professional standards applicable to the Statutory Auditors’ procedures for annual and consolidated financial
statements presented according to the single European electronic reporting format, we have verified that the presentation of
the consolidated financial statements to be included in the annual financial report referred to in paragraph I of Article L. 451-
1-2 of the French Monetary and Financial Code (Code monétaire et financier) and prepared under the Chief Executive Officer’s
responsibility, complies with this format, as defined by European Delegated Regulation No. 2019/815 of December 17, 2018.
Regarding the consolidated financial statements, our work included verifying that the markups in the financial statements comply
with the format defined by the aforementioned Regulation.
On the basis of our work, we conclude that the presentation of the consolidated financial statements to be included in the annual
financial report complies, in all material respects, with the single European electronic reporting format.
It is not our responsibility to ensure that the consolidated financial statements to be included by the Company in the annual
financial report filed with the AMF correspond to those on which we carried out our work.
Appointment of the Statutory Auditors
We were appointed Statutory Auditors of Dassault Systèmes SE by the General Meeting of Shareholders held on June 8, 2005 for
PricewaterhouseCoopers Audit and on May 27, 2010 for Ernst & Young et Autres.
At December 31, 2020, PricewaterhouseCoopers Audit and Ernst & Young et Autres were in the sixteenth and eleventh consecutive
year of their engagement, respectively.
Previously, Ernst & Young Audit was the Statutory Auditor of Dassault Systèmes SE from 1998.
Responsibilities of management and those charged with governance for the consolidated financial statements
Management is responsible for preparing consolidated financial statements giving a true and fair view in accordance with
International Financial Reporting Standards as adopted by the European Union and for implementing the internal control
procedures it deems necessary for the preparation of consolidated financial statements that are free of material misstatement,
whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting,
unless it expects to liquidate the Company or to cease operations.
The Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and
risk management systems, as well as, where applicable, any internal audit systems, relating to accounting and financial reporting
procedures.
The consolidated financial statements were approved by the Board of Directors.
Responsibilities of the Statutory Auditors relating to the audit of the consolidated financial statements
Objective and audit approach
Our role is to issue a report on the consolidated financial statements. Our objective is to obtain reasonable assurance about
whether the consolidated financial statements as a whole are free of material misstatement. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with professional standards will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
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DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Consolidated Financial Statements
or in the aggregate, they could reasonably be expected to influence the economic decisions taken by users on the basis of these
consolidated financial statements.
As specified in Article L. 823-10-1 of the French Commercial Code, our audit does not include assurance on the viability or quality
of the Company’s management.
As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditors exercise
professional judgment throughout the audit.
They also:
} identify and assess the risks of material misstatement in the consolidated financial statements, whether due to fraud or error,
design and perform audit procedures in response to those risks, and obtain audit evidence considered to be sufficient and
appropriate to provide a basis for their opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control;
} obtain an understanding of the internal control procedures relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control;
} evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management
and the related disclosures in the notes to the consolidated financial statements;
} assess the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. This assessment is based on the audit evidence obtained up to the date of the audit
report. However, future events or conditions may cause the Company to cease to continue as a going concern. If the Statutory
Auditors conclude that a material uncertainty exists, they are required to draw attention in the audit report to the related
disclosures in the consolidated financial statements or, if such disclosures are not provided or are inadequate, to issue a qualified
opinion or a disclaimer of opinion;
} evaluate the overall presentation of the consolidated financial statements and assess whether these statements represent the
underlying transactions and events in a manner that achieves fair presentation;
} obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within
the Group to express an opinion on the consolidated financial statements. The Statutory Auditors are responsible for the
management, supervision and performance of the audit of the consolidated financial statements and for the opinion expressed
thereon.
Report to the Audit Committee
We submit a report to the Audit Committee which includes, in particular, a description of the scope of the audit and the audit
program implemented, as well as the results of our audit. We also report any significant deficiencies in internal control that we
have identified regarding the accounting and financial reporting procedures.
Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgment, were the most
significant for the audit of the consolidated financial statements and which constitute the key audit matters that we are required
to describe in this report.
We also provide the Audit Committee with the declaration provided for in Article 6 of Regulation (EU) No. 537/2014, confirming
our independence within the meaning of the rules applicable in France, as defined in particular in Articles L. 822-10 to L. 822-14
of the French Commercial Code and in the French Code of Ethics for Statutory Auditors. Where appropriate, we discuss any risks
to our independence and the related safeguard measures with the Audit Committee.
Neuilly-sur-Seine and Paris-La Défense, March 18, 2021
The Statutory Auditors
PricewaterhouseCoopers Audit
Thierry Leroux
Ernst & Young et Autres
Nour-Eddine Zanouda
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Parent company financial statements
4
4.2 Parent company financial statements
The financial statements for the year ended December 31, 2020 have been prepared in accordance with the current French
accounting rules with the same principles and valuation methods as previous year.
In 2020 operating revenue decreased 2.1% to €1,728.1 million from €1,765.1 million in 2019 principally driven, on the one
hand by a slight decline in royalties earned from the Group for products sold with a technology owned by Dassault Systèmes SE
(“the Company”), and in revenues from new licenses, partly offset by a growth in subscription and support revenues, and on the
other hand by a baseline effect as 2019 recorded €23.7 million of credit for costs to spread over in relation to the financing of
Medidata Solutions, Inc. (“Medidata”) acquisition. The portion of revenue earned on export sales amounted to €1,415.0 million,
or 82.4% of net sales. Software revenue decreased 0.6% to €1,280.3 million in 2020 from €1,287.6 million in 2019.
Operating expenses decreased 2.5% to €1,379.7 million in 2020, from €1,414.4 million in 2019. The main drivers of this change
were as follows:
} the other purchases and external expenses decreased primarily because of savings recorded on fees and professional travels and
also, a higher comparative base in 2019 related to bank charges for the funding of Medidata acquisition;
} personnel costs fell principally as a result of lower social contributions;
} depreciation, amortization and provisions decreased mainly as the amortization of the “IBM PLM” goodwill that was acquired
in 2010, ended.
Operating income decreased 0.7% from €350.7 million in 2019 to €348.4 million in 2020.
2020 financial income amounted to €241.8 million, compared with €132.1 million for the prior year, showing an increase of
€109.7 million. This change was principally due to the increase of the dividends received from the foreign subsidiaries of the
Company.
Exceptional income and loss amounted to a loss of €67.0 million in 2020 compared to a loss of €104.1 million in 2019.
The improvement is primarily explained by a comparative base effect in 2019 which included an exceptional foreign exchange
loss related to the restructuring of a subsidiary’s equity interest.
In 2020, income tax expense increased to €54.0 million from €40.6 million in 2019. Income tax expense increase is principally
explained by better financial and exceptional results.
Net income increased to €412.9 million in 2020 from €279.6 million in 2019.
Cash and cash equivalents and marketable securities amounted to €904.9 million, compared with €1,016.3 million at
December 31, 2019.
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DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
4.2.1 Parent company financial statements and notes
Statement of income
(in millions of euros)
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/(EXPENSE), NET
CURRENT INCOME
EXCEPTIONAL INCOME/(LOSS), NET
EMPLOYEE PROFIT-SHARING
INCOME TAX EXPENSE
NET INCOME
Notes
3
Year ended December 31,
2020
1,728.1
1,716.4
1,415.0
11.7
2019
1,765.1
1,727.0
1,421.2
38.1
(1,379.7)
(1,414.4)
(524.3)
(33.6)
(522.6)
(85.2)
(214.0)
348.4
241.8
590.2
(67.0)
(56.3)
(54.0)
412.9
(562.7)
(31.1)
(527.4)
(91.5)
(201.7)
350.7
132.1
482.8
(104.1)
(58.5)
(40.6)
279.6
4
5
6
7
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Balance sheet
(in millions of euros)
Assets
NON-CURRENT ASSETS NET
Intangible Assets
Property and Equipment
Non-current Financial Assets
CURRENT ASSETS NET
Receivables
Marketable Securities
Treasury Shares
Cash and cash equivalents
PREPAID EXPENSES
DEFERRED EXPENSES, BOND ISSUE AND REDEMPTION PREMIUMS
FOREIGN CURRENCY TRANSLATION ADJUSTMENT
TOTAL ASSETS
(in millions of euros)
Liabilities and equity
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
FOREIGN CURRENCY TRANSLATION ADJUSTMENT
TOTAL LIABILITIES AND EQUITY
Financial statements
Parent company financial statements
4
Year ended December 31,
Notes
2020
2019
7,550.7
7,400.4
10
11
12
13
14
14
14
20
17
280.0
54.6
7,216.1
2,064.0
717.8
684.3
441.3
220.6
75.7
23.9
1.0
325.4
56.8
7,018.2
2,187.4
724.4
782.6
446.7
233.7
75.0
30.2
0.6
9,715.3
9,693.6
Year ended December 31,
Notes
2020
2019
15
16
17
19
20
4,254.4
132.6
1,225.6
13.3
2,467.0
412.9
3.0
556.6
4,224.8
576.6
76.4
26.5
3,932.6
132.0
1,134.9
13.2
2,370.0
279.6
2.9
592.0
4,653.0
436.0
73.2
6.8
9,715.3
9,693.6
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DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
Notes to the Annual Financial Statements for Years
Ended December 31, 2020 and 2019
CONTENTS
Note 1 Description of Business
and Key Events of the Year
Note 2
Summary of Significant
Accounting Policies
Note 3 Operating Revenue
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
Note 13 Receivables
157
157
160
161
162
162
163
163
164
165
165
166
166
Note 14 Treasury
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 Prepaid Expenses and Unearned
Revenue
Note 21 Financial Commitments
Note 22 Other Commitments and
Contingencies
Note 23 Additional Information
Note 24
Information Relating to Subsidiaries
and Shareholdings
167
168
171
172
173
173
174
174
175
175
176
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Parent company financial statements
4
Note 1 Description of Business and Key Events of the Year
Description of business
Dassault Systèmes SE (“the Company”) provides end-to-
end software solutions and services, designed to support
companies’ innovation processes, from specification and
design of a new product, to its sale to the customer, through all
stages of digital mock-up, simulation, and realistic 3D virtual
experiences representing the end-user experience.
industries structured
The Company serves eleven
into
three sectors: Manufacturing Industries (Transportation &
Mobility; Aerospace & Defense; Marine & Offshore; Industrial
Equipment; High-Tech; Home & Lifestyle; Consumer Packaged
Goods & Retail; and a portion of Business Services); Life
Sciences & Healthcare (Life Sciences); and Infrastructure &
Cities (Energy & Materials; Construction, Cities & Territories;
Business Services). To serve its customers, the Company has
developed a broad software applications portfolio, comprised
of 3D modeling applications, simulation applications, social
and collaborative applications, and information intelligence
applications, powered by its 3DEXPERIENCE platform.
incorporated under
Dassault Systèmes SE is a European company (Societas
Europaea)
laws of France.
The Company’s registered office
located at 10, rue
Marcel Dassault, in Vélizy-Villacoublay, France. The Dassault
Systèmes SE shares are listed in France on Euronext Paris.
These financial statements were established under the
responsibility of the Board of Directors on March 18, 2021.
the
is
Key Events of the Year
Early repayment of two loans
In connection with the acquisition of Medidata Solutions,
Inc. (“Medidata”), the Company subscribed in October 2019
a term loan for €500.0 million bearing interest rate at
Euribor 3 months plus 0.50% per annum and a term loan for
USD 530.0 million bearing interest rate at Libor USD 3 months
plus 0.60% per annum. Both loans had a 5-year term.
On October 28, 2020, the Company redeemed early, as
allowed by the financing contract, part of its term loans for
€200.0 million and USD 230.0 million (see Note 17 Financial
Liabilities).
Note 2 Summary of Significant Accounting Policies
The financial year lasts for 12 months from January 1 through
December 31.
Revenues are disclosed net of taxes collected from customers
and remitted to governmental authorities.
The annual financial statements for the fiscal year ended
December 31, 2020 have been prepared and are presented in
accordance with the rule ANC n°2014-03 related to the French
General Chart of Accounts (PCG). In particular, the financial
statements have been prepared in accordance 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:
Revenue
The Company derives revenue from three primary sources:
(1) licenses, other software revenue (which includes the
development of additional functionalities of standard products
requested by clients), subscription and support (which
includes software license updates and technical support);
(2) consulting and training services; and (3) royalties from
distribution agreements signed primarily with the Company’s
subsidiaries.
The Company accounts for a contract with a client when there
is a written agreement that creates legally enforceable rights
and obligations, including payment terms, when the contract
has commercial substance and when collection consideration
is probable. A performance obligation is a promise in a contract
with a client to transfer products or services that are distinct
from the other promises of the contract.
Revenue is recognized when, or as, control of a promised
product or service is transferred to a client, in an amount that
reflects the consideration to which the Company expects to be
entitled in exchange for those products or services.
The Company’s products are also sold by value- added resellers
that are assessed as principal in the transaction because they
generally have the primary responsibility for fulfillment to the
end-customer. As a result, the Company recognizes revenue
in the amount of the fee it expects to be entitled to, i.e. the
consideration paid by the distributor, assuming all other
revenue recognition criteria have been met.
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DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
Licenses, subscription, support and other software
revenue
Software license revenue represents fees earned from granting
customers licenses to use the Company’s software. It includes
perpetual and periodic license sales of software products and
is recognized at a point in time for an arrangement when
control is transferred to the client.
Subscription contracts generally have a one-year term and
contain two separate performance obligations pertaining
to on premise software license and support. Subscription
revenue also is derived from access to cloud solution contracts
including remote access to a software solution, hosting and
support services. Revenue from cloud subscription is generally
recognized linearly over the contractual term.
Support revenue represents periodic fees associated with the
sale of unspecified product updates on a when-and-if-available
basis and technical support. Support agreements are entered
into in connection with the initial software license purchase.
Support may be renewed by the customer at the conclusion of
each term. Revenue from support is recognized on a straight-
line basis over the term of the support agreement as the
Company has a continuing obligation to provide services.
Other software revenue mainly relates to the development
of additional functionalities of standard products requested
by clients and is recognized when the development work is
performed.
Revenue under arrangements with multiple performance
obligations, which typically include software licenses, support
and/or services agreements sold together is allocated to each
distinct performance obligation based on their standalone
selling price.
The stand-alone selling price is the price at which the Company
would sell a promised product or service separately to a client.
The Company generally establishes stand-alone selling price
based on the observable prices of products or services sold
separately in comparable circumstances to similar clients.
Estimating stand-alone selling price is a formal process that
includes review and approval by the Company’s management.
In certain instances, e.g. perpetual software licenses only sold
bundled with one year of support, the Company is not able to
establish a standalone selling price range based on observable
prices. The stand-alone selling price is then determined by
applying the residual approach.
When a sale of a license goes along with a service essential to
the software functionality, the two performance obligations
(software and service) are not distinct. Therefore, the license
revenue is recognized in accordance with the pattern of
recognition of the service obligation.
Services Revenue
Services revenue consist primarily of fees from consulting
services in process optimization and 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.
Performance obligation from fixed price contracts are usually
satisfied over the time. The revenue is recognized using
percentage of completion based on the labor costs incurred to
date as a percentage of the total estimated labor costs to fulfill
the contract.
Service revenues derived from time and material contracts are
recognized over the time on an output basis as labor hours are
delivered or direct project expenses are incurred.
Research and development
Research costs are expensed as incurred. Actually, the risks
and uncertainties inherent in the software development
process do not allow to demonstrate technological feasibility
of a product before a prototype has been completed. The time
between the setting up of the prototype and the commercial
release of the software products is generally very short. As a
consequence, costs incurred after technological feasibility is
established are not material.
Research and development tax credits are recognized as a
deduction to the income tax expense.
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.
Under the rule ANC n°2015-06 dated November 23, 2015,
technical deficits from mergers and goodwill have been
allocated to their underlying assets and amortized if necessary
since January 1, 2016 except for residual goodwill considered
as permanent and not amortized. All these assets are subject
to yearly impairment tests.
158
ANNUAL REPORT 2020 DASSAULT SYSTÈMES The useful life of intangible assets, property and equipment is presented below:
Amortization using the straight-line method
Intangible assets
Software
Technologies and customer assets
Tangible assets
Computer equipment
Fixtures and fittings
Office furniture
Financial statements
Parent company financial statements
4
Amortization period
3 to 5 years
5 to 10 years
3 to 5 years
Over the term of the lease
10 years
Non-current Financial Assets
Provisions for Contingencies and losses
Investments in subsidiaries are recognized at cost without
revaluation of the transaction currencies. 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 when
liabilities to cover are probable to generate outflows of
resources resulting from a present obligation. These provisions
are estimated to take into account the most probable
hypothesis at the closing date.
At least once a year, the Company reviews the net realizable
value of its investments and loans to subsidiaries. The net
realizable value of securities takes into account the amount
of shareholders’ equity, long-term profitability and strategic
factors based on assumptions and estimates which may have
a significant impact. An impairment loss is recognized if the
net realizable value is less than the carrying value for a long
period of time.
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.
Operating 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 risk of non-collectability.
Foreign currency transactions
Transactions in foreign currencies are recorded in euros in
the income statement at the exchange rate of the last day
of the previous month, except for significant transactions
which are booked at the exchange rate of the transaction
date. 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.
Derivatives
The Company may choose to manage exposure to foreign
currency and interest rates with regards to revenue and
cost generated by its ongoing and predictable activity.
The Company may also mitigate a given foreign currency
exposure linked to specific operations.
In order to hedge foreign currency exposure, the Company
uses, as needed, foreign exchange contracts or financial
instruments for which total maximum losses are known from
the outset.
Hedging activities are generally carried out and managed
by the Company for its own account and on behalf of
its subsidiaries. In certain cases, however, the Company
may authorize selected subsidiaries to enter into hedging
instruments directly.
The fair market values of derivative
instruments were
determined by financial institutions using market prices and
option pricing models.
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:
} net unrealized losses are fully reserved;
} net gains are recognized in the income statement upon
settlement.
159
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
Exchange rate derivatives
Exchange rate derivatives contribute to the Company currency
position. Unrealized losses on these derivatives are taken into
account in determining the provision for unrealized exchange
losses.
Isolated open position
Any transaction that does not qualify as a hedge is classified
in a category called “isolated open position”. The accounting
treatment is as follows:
} derivatives are recorded in the balance sheet at their fair
value;
} a provision for unrealized losses derivatives is booked
impacting the profit and loss account.
As a consequence, changes in the value of derivatives that do
not qualify as hedge are recorded in adjustment accounts.
Notes on the Income Statement
Note 3 Operating Revenue
Revenue Breakdown
(in millions of euros)
Licenses revenue
Subscription and Support revenue
Royalties
TOTAL SOFTWARE REVENUE
Services revenue
Other revenue
TOTAL REVENUE
The breakdown of software revenue by geographic area is as follows:
(in millions of euros)
Europe
Asia
Americas
TOTAL SOFTWARE REVENUE
Other Revenue
Year ended December 31,
2020
108.5
460.9
710.9
2019
119.4
436.3
731.9
1,280.3
1,287.6
49.1
387.0
53.0
386.4
1,716.4
1,727.0
Year ended December 31,
2020
694.6
374.5
211.2
2019
709.6
349.0
229.0
1,280.3
1,287.6
Other revenue represents principally recharges of shared and central services which are performed to the benefit of the Company’s
subsidiaries and also, R&D revenue when the Company realizes a subcontracting activity.
160
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Note 4 Personnel Costs
Personnel costs are comprised of the following:
(in millions of euros)
Salaries and wages
Social contributions
TOTAL PERSONNEL COSTS
Average Headcount by Category
Salaried employees by category
Managers
Supervisors and technicians
Employees
TOTAL AVERAGE HEADCOUNT (IN FULL TIME EQUIVALENTS)*
* Apprentices and professional training contractors excluded.
Financial statements
Parent company financial statements
4
Year ended December 31,
2020
355.3
167.3
522.6
2019
354.3
173.1
527.4
Year ended December 31,
2020
3,559
124
23
3,706
2019
3,438
125
32
3,595
The Company headcount increased notably in research and development and in support functions to serve the growth of the Group.
Compensation of Executives
Total compensation granted by the group Dassault Systemes to the executive officers is paid by Dassault Systèmes SE, a company
incorporated under French law. The total gross compensation paid to the executive officers by the Company in 2020 is as follows:
(in thousands of euros)
Salaries
Benefits in kind
Directors’ fees*
TOTAL COMPENSATION OF EXECUTIVES
*
Compensation is based on payments. 2020 Directors’ fees represent €100,500 paid in 2021.
Year ended December 31,
2020
4,809
22
83
2019
4,614
25
74
4,914
4,713
161
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
Note 5 Financial Income and Expense, Net
Net financial income and expense is as follows:
(in millions of euros)
Dividends received
Interest income
Interest expense
DIVIDEND & INTEREST INCOME, NET
Revenue from disposals of investment securities
Net foreign exchange income (expense), net other financial contingencies
Net reversal (additions) of provisions for impairment of investments
FINANCIAL INCOME, NET
Year ended December 31,
2020
235.6
5.8
(16.7)
224.7
4.6
12.5
-
241.8
2019
128.7
7.8
(18.5)
118.0
8.5
5.4
0.2
132.1
The dividends received significantly increased in order principally to enable the early partial repayment of two loans subscribed in
October 2019 (see Note 1 Description of Business and Key Events of the Year and Note 17 Financial Liabilities).
Note 6 Exceptional Income/Loss
Exceptional loss for the year ended December 31, 2020 is
€67.0 million compared to a loss of €104.1 million for the
year ended December 31, 2019. The improvement is primarily
explained by a comparative base effect in 2019 which
included a foreign exchange loss related to the restructuring of
a subsidiary’s equity interest.
A new Company agreement regarding employee competencies
and positions has been implemented since February 2020
(see Note 16 Provisions for Contingencies and Losses). It deals
with:
} anticipation of competencies needed to sustain the
Company’s development;
} training modalities for employees to acquire those
competencies;
} internal and external employment evolution plan,
in
interaction with its ecosystem.
The costs relating to this agreement are recorded as
exceptional expenses. Net exceptional expenses amounted to
€30.4 million in 2020 resulting principally from initial start-up
costs of the plan.
Lastly, the impact of the shares granted to Mr. Bernard Charlès,
Vice-Chairman of the Board of Directors and Chief Executive
Officer as part of a plan of progressively associating him with
the Company’s capital, is recorded as an exceptional item (see
Note 8 Performance Shares).
162
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Parent company financial statements
4
Note 7
Income Tax
The Company is the head of a tax group, including 6 entities at
the end of December 2020 compared to 5 entities at the end
of December 2019.
Under the tax integration agreement, it is agreed that the
income tax of tax-integrated companies will be the same as
it would have been if each subsidiary had not been a member
of it. As a stand-alone entity, the Company income tax would
have amounted to €53.5 million in 2020.
The breakdown of income tax between current income and exceptional loss for the year ended December 31, 2020, is as follows:
(in thousands of euros)
Current income
Exceptional loss
TOTAL
Income
before tax
Tax
(expense) credit
Income after
income tax
590.2
(123.3)
466.9
(101.8)
47.8
(54.0)
488.4
(75.5)
412.9
The effective income tax rate for the year ended December 31, 2020 was 11.6% against 12.7% in 2019.
Note 8 Performance Shares
New plans granted in 2020
Pursuant to an authorization granted by the General Meeting
of Shareholders held on May 22, 2018, the Board of Directors
decided on May 26, 2020 to grant 804,966 performance
shares (plan 2020-A) to some employees and executives of
the Group and 300,000 performance shares (plan 2020-B) to
Mr. Bernard Charlès, Vice-Chairman of the Board of Directors
and Chief Executive Officer as part of a plan of progressively
associating him with the Company’s capital implemented
since several years. Such shares shall be acquired as at May 26,
2024. They shall be vested subject to the condition that the
beneficiary is an employee, an executive or a director of the
Group at the end of a presence period ending on May 26,
2023 and subject to the achievement of a condition based on
the Group non-IFRS diluted earnings per share growth.
Pursuant to an authorization granted by the General Meeting
of Shareholders held on May 22, 2018, the Board of Directors
decided on May 26, 2020 to grant 56,721 performance
shares (plan 2020-M) to some employees and executives of
the Group. Such shares shall be acquired as at May 26, 2023.
None of the 2020-A and 2020-B beneficiaries are also a
2020-M plan beneficiary. They shall be vested subject to the
condition that the beneficiary is an employee or an executive
of the Group at the end of a presence period ending on
May 26, 2023 and subject to the achievement of a double
condition on the growth of the non-IFRS revenue and of the
non-IFRS operating margin of the MEDIDATA activity.
Amendments to plans
On April 22, 2020, the Board of Directors amended the rules of
the 2019-A, 2019-B and 2019-A2 performance shares plans.
These plans were initially granted by the Board of Directors on
September 25, 2018 (2019-A and 2019-B plans) and July 1,
2019 (2019-A2 plan). The modifications were related to the
condition based on the Group non-IFRS diluted earnings per
share growth (non-vesting condition).
163
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
A summary of the Group’s performance shares plans is as follows:
Plans
2016-A
2016-B
2017-A
2017-B
2018-A
2018-B
2019-A
2019-B 2019-A2
2020-A
2020-B 2020-M
Date of General
Meeting of
Shareholders
Date of grant by Board
of Directors
Total number of shares
granted
Acquisition period
(in years)(1)
Performance
conditions
Performance
conditions is reached
at December 31, 2020
09/04/
2015
05/26/
2016
09/04/
2015
05/26/
2016
09/04/
2015
05/23/
2017
09/04/
2015
05/23/
2017
09/04/
2015
05/22/
2018
09/04/
2015
05/22/
2018
09/04/
2015
09/25/
2018
09/04/
2015
09/25/
2018
05/22/
2018
07/01/
2019
05/22/
2018
05/26/
2020
05/22/
2018
05/26/
2020
05/22/
2018
05/26/
2020
782,950
300,000
801,700
300,000 815,730 300,000 496,700 300,000 307,615 804,966 300,000
56,721
Two or
three(2)
See
Note(3)
Two or
three(2)
See
Note(3)
Three
Three
Three
Three
Three
years and
eight
months
Three
years and
eight
months
Two
years and
eleven
months
Four
Four
Three
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(4)
See
Note(5)
Yes
Yes
Yes
Yes
See
Note(6)
See
Note(6)
N/A
N/A
N/A
N/A
N/A
N/A
(1) For 2016-A, 2016-B and 2020-M plans, subject to the condition that the beneficiary be an employee or a Director of the Group at the acquisition date. For the 2017-A, 2017-B,
2018-A and 2018-B plans, the presence period was two years. The presence period is two years and eight months for 2019-A and 2019-B plans, around one year and eleven
months for 2019-A2 plan and three years for 2020-A and 2020-B plans.
(2) Share acquisition divided into two tranches, the first having vested on May 26, 2018 and the second having vested on May 26, 2019.
(3) Performance condition for the first tranche will be measured based on the average performance of two criteria: the growth of the non-IFRS diluted earnings per share of the Group
for the year 2017, excluding foreign currency effects, compared to the year 2015 (non-market condition), and the outperformance of the price of the Dassault Systèmes SE share
compared to the performance of the CAC 40 index between February 2016 and February 2018 (market condition). Such growth and outperformance must be at least equal to a
threshold established by the Board of Directors. Performance condition for the second tranche will be measured based on two cumulative criteria: the growth of the non-IFRS
diluted earnings per share of the Group for the year 2018, excluding foreign currency effects, compared to the year 2015 (non-market condition), and the outperformance of the
price of the Dassault Systèmes SE share compared to the performance of the CAC 40 index between February 2016 and February 2019 (market condition). Such growth and
outperformance must be at least equal to a threshold established by the Board of Directors. The 2016-B shares granted to Mr. Bernard Charlès, Vice-Chairman of the Board of
Directors and Chief Executive Officer, are also subject to an additional performance condition related to his variable compensation itself dependent on achieving performance criteria
previously established by the Board of Directors.
(4) For the 2017, 2018, 2019 and 2020 plans (2020-M excluded): performance condition based on a targeted growth between the non-IFRS diluted earnings per share of the Group
excluding foreign currency effects for the respective years 2019, 2020, 2021 and 2023, and the one achieved in the respective years 2016, 2017, 2018 and 2019 (non-vesting
condition). Such growth must be at least equal to a threshold (expressed as a percentage) established by the Board of Directors granting the shares.
(5) For the 2020-M plan, performance condition based on the growth of the non-IFRS revenue and of the non-IFRS operating margin of the MEDIDATA activity. This double condition
is based on targeted growths between the year 2022, excluding foreign currency effects, and the one achieved in the year 2019 (vesting condition).
(6) Performance condition will be measured by the March 18, 2021 Board of Directors.
Grant of rights to receive Dassault Systèmes SE shares
in replacement of rights to receive Medidata shares
As part of the acquisition of Medidata and subject to its closing,
the Board of Directors approved on June 11, 2019 the grant of
rights to receive Dassault Systèmes SE shares in replacement
of the rights to receive Medidata shares that had been granted
to some of its employees and executives. This grant amounts
to a maximum of 1,894,649 Dassault Systèmes SE shares
and will be definitively vested if the beneficiaries are still
employees upon the expiry of the vesting periods.
The weighted average vesting period of these shares is
1.41 year from the closing date of the acquisition of Medidata
and the last vesting date of these shares is September 2023.
Dassault Systèmes SE recorded as exceptional items an accrual
for the total foreseeable costs relating to the rights to receive
Dassault Systèmes SE shares since Medidata beneficiaries do
not directly contribute to its activity, while an accrued income
was accounted for the same amount representing the recharge
to Medidata due on maturity dates of the plans.
Note 9 Additional Information
Research and development expense
In 2020, the Company recorded a total of €298.3 million of research and development expenses, representing 23.3% of software
revenue. This amount reflects a full-cost basis including IT and facility costs, as well as employee profit sharing, net of recharges
and grants.
164
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Parent company financial statements
4
Notes to the Balance Sheet
Note 10 Intangible Assets
(in millions of euros)
Goodwill
Software, technology and other
TOTAL GROSS VALUE
Goodwill
Software, technology and other
TOTAL AMORTIZATION AND PROVISIONS
Goodwill
Software, technology and other
TOTAL NET VALUE
2019
434.8
173.2
608.0
(149.9)
(132.7)
(282.6)
284.9
40.5
325.4
Year ended December 31,
Additions
Disposals
-
5.2
5.2
(33.0)
(15.8)
(48.8)
(33.0)
(10.6)
(43.6)
-
(4.6)
(4.6)
-
2.8
2.8
-
(1.8)
(1.8)
Residual goodwill considered as permanent, amounts to €85.3 million net of provisions.
Note 11 Property and Equipment
(in millions of euros)
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
The acquisitions are mainly related to hardware and IT servers.
2019
113.4
42.6
13.4
169.4
(80.0)
(23.1)
(9.5)
(112.6)
33.4
19.5
3.9
56.8
Year ended December 31,
Additions
Disposals
15.7
2.6
0.7
19.0
(17.9)
(2.2)
(0.7)
(20.8)
(2.2)
0.4
-
(1.8)
(1.6)
(1.9)
(2.6)
(6.1)
1.6
1.5
2.6
5.7
-
(0.4)
-
(0.4)
2020
434.8
173.8
608.6
(182.9)
(145.7)
(328.6)
251.9
28.1
280.0
2020
127.5
43.3
11.5
182.3
(96.3)
(23.8)
(7.6)
(127.7)
31.2
19.5
3.9
54.6
165
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
Note 12 Non-Current Financial Assets
(in millions of euros)
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
2019
6,793.2
267.7
10.1
7,071.0
(52.8)
(52.8)
6,740.4
267.7
10.1
7,018.2
Year ended December 31,
Additions
Disposals
130.6
205.1
9.7
345.4
-
-
130.6
205.1
9.7
345.4
-
(137.4)
(10.1)
(147.5)
-
-
-
(137.4)
(10.1)
(147.5)
2020
6,923.8
335.4
9.7
7,268.9
(52.8)
(52.8)
6,871.0
335.4
9.7
7,216.1
The increase in investments in subsidiaries is mainly related to the recapitalization of Dassault Systèmes International SAS and
Dassault Systemes Deutschland GmbH in addition to the acquisition of PROXEM SAS.
Note 13 Receivables
Accounts receivable
At December 31, 2020, net accounts receivable amounts to €416.4 million compared with €471.9 million at December 31, 2019.
This difference is principally due to the recharge of Medidata performance share plans that were delivered in 2020 (see Note 8
Performance Shares).
External unpaid issued invoices are split as follows:
(in millions of euros)
(A) overdue split
Number of bills
Total amount of external invoices
(VAT excluded)
Percentage of total external revenue
(VAT excluded)
Total amount of trade receivables
excluded from (A) and related to claims
or not yet issued (VAT excluded)
0 day
(indicative)
9,182
103.1
16.6%
19.2
Year ended December 31, 2020
1 to 30 days
31 to 60 days
61 to 90 days
91 days and
over
Total
(1 day and over)
4.9
0.8%
1.0
0.2%
0.3
0.0%
2.3
0.4%
3,504
8.5
1.4%
General payment terms applied by the Company to third parties are set out from 30 days end of the month to 60 days net.
166
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Parent company financial statements
4
Less than 1 year
4.2
4.6
81.9
65.8
152.3
More than
1 year
–
–
144.9(2)
–
144.9
Year ended December 31,
2020
4.2
4.6
226.8
65.8
297.2
2019
5.2
5.2
221.6
20.5
247.3
Other receivable
Other receivable are as follows:
(in millions of euros)
SUPPLIER ADVANCES AND DEPOSITS
Current accounts with debit balances(1)
Tax and social receivable
Other receivable
TOTAL OTHER RECEIVABLE
(1) See Note 18 Elements Concerning Related Companies.
(2) See Note 22 Other Commitments and Contingencies
The change in other receivable is principally explained by a treasury advance paid to a subsidiary while obtaining an administration
ruling.
Note 14 Treasury
Marketable Securities
At December 31, 2020, marketable securities amount to €684.3 million compared with €782.6 million at December 31, 2019.
They are primarily held in euro denominated monetary investments.
Adding the cash available, the level of cash decreased from €1,016.3 million at December 31, 2019 to €904.9 million at
December 31, 2020 as a result principally of the partial advance repayment of term loans (see Note 17 Financial Liabilities).
Treasury Shares
Share repurchases are analyzed below as at December 31, 2020:
Treasury shares directly managed by the Company(1)
Treasury shares managed through liquidity agreement(2)
TREASURY SHARES AS OF DECEMBER 31, 2019
Number of
shares
authorized and
issued
3,494,237
62,088
3,556,325
Average price
(in euros)
Total
(in millions of euros)
126.30
155.77
126.82
441.3
9.7
451.0
(1) The General Meeting of Shareholders of May 26, 2020 authorized the Board of Directors to implement a share repurchase program limited to 5,000,000 of Dassault Systèmes
shares. Under this authorization, the Company may not buy shares above a maximum annual aggregate amount of €800 million.
(2) The Company signed a liquidity agreement for an initial period until December 31, 2015, automatically renewable for subsequent 12-month terms. On December 31, 2020,
934,946 shares were purchased, at an average price of €146.97, and 945,837 shares were sold, at an average price of €148.18. Furthermore, Dassault Systèmes SE signed with
la Société Générale a liquidity agreement on December 11, 2020 for a period covering from December 14, 2020 to February 4, 2021. On December 31, 2020, no share was
acquired under this agreement.
167
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
Note 15 Shareholders’ Equity
Share Capital
Changes in share capital during the year ended December 31, 2020 are as follows:
SHARES AS OF JANUARY 1
Shares issued pursuant to exercise of share subscription options
SHARES AS OF DECEMBER 31
Shareholder base
On December 31, the share capital of the Company is held by:
(%)
Public
Groupe Industriel Marcel Dassault
Charles Edelstenne(1)
Bernard Charlès
Treasury stock(2) and indirect treasury stock(3)
Directors and senior management(4)
TOTAL
On December 31, the voting rights in the Company are held by:
(in% of exercisable voting rights)(1)
Groupe Industriel Marcel Dassault
Public
Charles Edelstenne(1)
Bernard Charlès
Directors and senior management(4)
TOTAL
Number of
shares
authorized and
issued
264,038,001
1,098,236
265,136,237
Par value
(in euros)
Capital
(in euros)
0.50
0.50
0.50
132,019,000
549,118
132,568,118
2020
49.76
40.39
6.00
1.62(5)
1.53
0.70
2019
49.64
40.50
5.99
1.51(5)
1.73
0.63
100.00
100.00
2020
54.45
34.55
8.06
2.07(5)
0.87
2019
54.76
34.55
8.10
1.87(5)
0.72
100.00
100.00
(1) Including shares held in two family trusts managed by Mr. Edelstenne.
At December 31, 2020, Mr. Edelstenne held 4,278,058 shares with all ownership rights and 3,382 shares through two family companies which he manages, representing a total
of 1.61% of the capital and 2.15% of the exercisable voting rights, as well as 11,616,045 shares with “usage” rights (usufruit). For the usage rights with respect to these
11,616,045 shares, representing 5.91% 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.
For details related to Mr. Edelstenne’s shareholding as of December 31, 2020 and December 31, 2019, see paragraph 6.3.1. of Annual Reports for 2019 and 2018 respectively.
(2) Including 62,088 shares through the liquidity agreement as of December 31, 2020. As of December 31, 2019, such number was 79,979 shares.
(3) Shares held by SW Securities LLC. This company is a subsidiary of Dassault Systèmes SE, Dassault Systèmes’ shares held by it do not have voting rights.
(4) Excluding Mr. Edelstenne and Mr. Charlès, “management” includes the officers listed in paragraph 5.1.2 “Executives of the Dassault Systèmes”.
(5) For further information, see Table 5 of paragraph 5.1.4 “Summary of the Compensation and Benefits due to Corporate Officers (mandataires sociaux)”.
168
ANNUAL REPORT 2020 DASSAULT SYSTÈMES
Financial statements
Parent company financial statements
4
Stock Option Plan
The main features of the Group stock option plans granted
before 2020 are as follows: options vest over various
periods ranging from one to four years, subject to continued
employment, options expire eight to ten years from grant
date, or after termination of employment or term of office,
whichever is earlier, options have generally been granted at an
exercise price equal to or greater than the grant date market
value of the Company share.
New plans granted in 2020
Plan 2020-01
Pursuant to an authorization granted by the shareholders at
the General Meeting of Shareholders held on May 26, 2020,
the Board of Directors decided on May 26, 2020 to grant
1,490,316 options to subscribe to Dassault Systèmes SE
shares to certain employees and executives of the Group, at an
exercise price of €145.45 (plan 2020-01) equal to the closing
value of the Company share the day before the grant.
Such options are divided in four tranches. They shall be vested
subject to the condition that the beneficiary is an employee
or an executive of the Group at the end of a presence period
of respectively one year (tranche 1), one year and a half
(tranche 2), two years and a half (tranche 3), and three years
and a half (tranche 4), and subject to the achievement of
certain performance conditions for the years 2020, 2021,
2022 and 2023 (non-market vesting condition for the
tranche 1 and non-vesting condition for the tranches 2, 3
and 4). The options expire ten years from grant date or at
the termination of employment if earlier than the end of the
presence period.
features of
Plans 2020-M-01, 2020-M-02, 2020-M-03, 2020-M-04
The main
the 2020-M-01, 2020-M-02,
2020- M-03, 2020-M-04 are as follows: options shall be
vested at the end of an acquisition period of one to three years,
subject to the condition that the beneficiary be an employee
or an executive of the Group at the acquisition date and subject
to the achievement of a non-market performance objective
for the years 2020, 2021, and 2022. The options expire ten
years from grant date or upon termination of employment,
whichever is earlier, options have generally been granted at
an exercise price equal to or greater than the grant date (or the
day before the grant date), market value of the Group’s share.
Pursuant to an authorization granted by the shareholders at
the General Meeting of Shareholders held on May 23, 2019,
the Board of Directors decided on March 11, 2020 to grant
13,193 options to subscribe to Dassault Systèmes SE shares to
certain employees and executives of the Group, at an exercise
price of €131.00 (plan 2020-M-01).
Pursuant to an authorization granted by the shareholders at
the General Meeting of Shareholders held on May 26, 2020,
the Board of Directors decided on May 26, 2020 to grant
658,410 options to subscribe to Dassault Systèmes SE shares
to certain employees and executives of the Group, at an
exercise price of €145.45 (plan 2020-M-02).
Pursuant to an authorization granted by the shareholders at
the General Meeting of Shareholders held on May 26, 2020,
the Board of Directors decided on September 23, 2020 to
grant 35,175 options to subscribe to Dassault Systèmes SE
shares to certain employees and executives of the Group, at an
exercise price of €157.85 (plan 2020-M-03).
Pursuant to an authorization granted by the shareholders at
the General Meeting of Shareholders held on May 26, 2020,
the Board of Directors decided on December 4, 2020 to grant
11,409 options to subscribe to Dassault Systèmes SE shares to
certain employees and executives of the Group, at an exercise
price of €152.15 (plan 2020-M-04).
Amendments to plans
On April 22, 2020, the Board of Directors amended the rules
of the 2018-01, 2019-01 and 2020-M-01 stock option plans,
respectively granted by the Board of Directors on May 22,
2018 (2018-01 plan), July 1, 2019 (2019-01 plan) and
March 11, 2020 (2020-M-01 plan). The modification of the
non-market performance conditions (vesting conditions) did
not change significantly the amount of awards expected to
vest on these plans.
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DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
Other information related to the stock options
A summary of the stock option activity is as follows:
OUTSTANDING AS OF JANUARY 1,
Granted
Exercised
Forfeited
OUTSTANDING AS OF DECEMBER 31,
Exercisable
2020
2019
Number of
options
5,707,133
2,208,503
(1,098,236)
(226,072)
6,591,328
2,898,530
Weighted
average
exercise price
Number of
options
Weighted
average exercise
price
€102.28
5,689,320
145.60
1,632,374
83.05
(1,305,060)
127.96
(309,501)
€119.12
5,707,133
€94.11
2,407,856
€85.13
140.00
74.84
101.52
€102.28
€78.16
A summary of the remaining contractual life and the exercise price of options outstanding as of December 31, 2020 is presented
below:
Stock option plan
2014-01
2015-01
2016-01
2017-01
2018-01
2019-01
2020-01
2020-M-01
2020-M-02
2020-M-03
2020-M-04
OUTSTANDING AS OF DECEMBER 31,
Movements in Shareholders’ Equity
Number of
options
Remaining
life (years)
Exercise price
25,627
302,668
457,412
874,773
1,345,945
1,442,863
1,463,171
13,193
619,092
35,175
11,409
6,591,328
1.40
4.68
5.40
6.39
7.39
8.50
9.40
9.19
9.40
9.73
9.93
7.87
€45.50
€62.00
€69.00
€82.00
€110.00
€140.00
€145.45
€131.00
€145.45
€157.85
€152.15
€119.12
2020
132.6
1,225.6
13.3
2,467.0
412.9
3.0
4,254.4
Movements in shareholders’ equity for the year ended December 31, 2020 are as follows:
(in millions of euros)
Share Capital
Share and contribution premiums
Legal reserve
Retained earnings
Income (loss) for the fiscal year
Regulated provisions
SHAREHOLDERS’ EQUITY
Appropriation of
2019 earnings
Effect of
exercising
options
Net income for
2020 fiscal year
2019
132.0
1,134.9
13.2
2,370.0
279.6
2.9
-
-
0.1
97.0
(279.6)
-
3,932.6
(182.5)
0.6
90.7
-
-
-
0.1
91.4
-
-
-
-
412.9
-
412.9
Movements in shareholder’s equity result from the issuances
of new shares from stock option plans, or from the payment of
dividends net of potential share capital decreases.
Dividend rights
In accordance with the decisions of the Combined General
Meetings of Shareholders held in May 2020 and in May 2019
dividends of €182.5 million for 2020 and of €168.8 million
for 2019 were fully paid in cash.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Parent company financial statements
4
Note 16 Provisions for Contingencies and Losses
Movements of provisions for contingencies and losses are as follows:
(in millions of euros)
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
*
See Note 8 Performance Shares.
Year ended December 31,
2019
549.8
0.6
31.8
4.8
5.0
Additions
Utilization
139.1
(206.1)
0.9
6.9
30.1
0.1
(0.6)
(1.3)
(4.0)
-
592.0
177.1
(212.0)
Reversal of
unused amounts
-
-
-
(0.5)
-
(0.5)
2020
482.8
0.9
37.4
30.4
5.1
556.6
The Company recorded in 2020 an additional €28.7 million provision for contingencies and losses in respect of the Company
voluntary early retirement agreement (see Note 6 Exceptional Income/Loss).
Changes in provisions for contingencies and losses impact captions of the income statement as follows:
(in millions of euros)
Operating income
Financial income and expense, net
Exceptional income/(loss)*
TOTAL
*
See Note 8 Performance Shares.
Additions
Utilization
Reversal of
unused amounts
113.0
0.1
64.0
177.1
(79.6)
-
(132.4)
(212.0)
(0.5)
-
-
(0.5)
Provisions for Post-employment Benefits
The Company commitment relating to post- employment
benefits is evaluated and recognized using the prospective
actuarial method based on right pro rata acquisition with the
use of a corridor.
This method 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 employees
when they retire as a fixed amount.
The projected benefit obligation at December 31, 2020 is
determined based on the following assumptions: retirement
between 60 and 65 years of age, discount rate of 0.80%,
average increase in salaries of 2.60% and a 3.00% expected
return on funds. The Company has an insurance policy
with Sogecap, a life insurance company affiliated with the
Société Générale, intended to cover the retirement payment
commitments. In respect of this policy, the funds amount
to a total of €14.0 million at December 31, 2020. Actuarial
impacts on the cost of past services are spread in profit using
the corridor method. They total €20.8 million to be expensed
on 20.86 years representing the length of residual employee
service.
171
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
Note 17 Financial Liabilities
Financial liabilities are as follows:
(in millions of euros)
Bond
Bank loans and borrowings
Employee profit-sharing scheme
Other financial liabilities
TOTAL FINANCIAL LIABILITIES
Bond
Less than 1 year
1 to 5 years
1.6
0.7
20.3
-
22.6
1,600.0
544.5
-
7.7
More than
5 years
2,050.0
-
-
-
Year ended December 31,
2020
3,651.6
545.2
20.3
7.7
2019
3,651.6
974.6
19.1
7.7
2,152.2
2,050.0
4,224.8
4,653.0
On September 16, 2019, the Company issued a four-tranche fixed rate bond for a total of € 3,650.0 million. This issuance was in
relation to the financing of the acquisition of Medidata completed in October 2019.
The conditions of the bond issue are as follows:
Bond
2022
2024
2026
2029
The terms and conditions of this loan are detailed in the
transaction note having obtained the AMF visa n° 19-434
dated September 12, 2019. A €10.1 million bond issue
premium was booked as an asset.
Term loans
In connection with the acquisition of Medidata, the Company
also subscribed in October 2019 a loan for €500.0 million
bearing interest rate at Euribor 3 months plus 0.50% per
annum and another loan for USD 530.0 million bearing
interest rate at Libor USD 3 months plus 0.60% per annum.
Both loans have a 5-year term.
On October 28, 2020, the Company redeemed early, as
allowed by the financing contract, part of its term loans for
€200.0 million and USD 230.0 million.
Nominal amount (in
millions of euros)
900.0
700.0
900.0
Maturity date
September 16, 2022
September 16, 2024
September 16, 2026
1,150.0
September 16, 2029
Coupon
0.000%
0.000%
0.125%
0.375%
These financing contracts do not have commitments such as
“covenant ratios” linked to the change in the Group’s rating.
Bond issuance costs are amortized over the underlying loan
terms. The remaining deferred cost as of December 31, 2020
amount to €13.8 million.
Line of credit
Dassault Systèmes SE received a financing commitment in the
form of a €750.0 million revolving line of credit for a period of
5 years from October 28, 2019. In May 2020, the Company
exercised its option to extend its maturity date for one more
year, bringing the new termination date to October 2025. As
of December 31, 2020, the line of credit is not used.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Parent company financial statements
4
Year ended December 31,
2020
316.0
311.8
4.6
49.3
237.3
240.3
2019
251.0
366.3
5.2
54.7
97.6
135.8
The significant
is primarily
explained by higher dividends received (see Note 5 Financial
Income and Expense, Net).
in finance
increase
income
Note 18 Elements Concerning Related Companies
(in millions of euros)
Loans receivable
Trade accounts receivable and related items
Current accounts receivable
Accounts payable and related items
Current accounts with credit balances
Finance income: dividends collected and net interest received
The increase in loans receivable is related to the financing of
the subsidiaries.
Current accounts with credit balances sharply fluctuated as
a result of cash group management and the financing of the
subsidiaries.
Note 19 Trade Payables
Trade payables
At December 31, 2020, trade payables amount to €103.9 million compared with €135.7 million at December 31, 2019.
External unpaid invoices are broken down as follows:
(in millions of euros)
(A) overdue split
Number of invoices
Total amount of external invoices
(VAT excluded)
Percentage of total external purchases
(VAT excluded)
Total amount of trade payables excluded
from (A) related to invoices not yet
recognized (VAT excluded)
0 day
(indicative)
1 to 30 days
31 to 60 days
61 to 90 days
91 days
and over
Total
(1 day and over)
Year ended December 31, 2020
0.2
0.1%
0.0
0.0%
0.0
(0.0)
44
0.2
0.0%
(0.0)%
0.1%
872
14.5
5.7%
47.1
Reference payment terms applied by the Company with third parties are generally end of the month 45 days. In the context
of the health crisis, effective payment terms were significantly reduced in 2020 (especially for small vendors of the domestic
market). The strict control of the process of vendor invoice treatment was also reinforced.
Other operating liabilities
Other operating liabilities are as follows:
(in millions of euros)
Tax and social liabilities
Current accounts with credit balances*
Other liabilities
TOTAL OTHER LIABILITIES
*
See Note 18 Elements Concerning Related Companies.
Less than 1 year
More than
1 year
169.4
237.3
63.0
469.7
3.0
-
-
3.0
Year ended December 31,
2020
172.4
237.3
63.0
472.7
2019
179.0
97.6
23.7
300.3
173
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
Note 20 Prepaid Expenses and Unearned Revenue
Prepaid expenses are mainly made of IT services paid in
advance. Prepaid expenses amount to €75.7 million in 2020
from €75.0 million in 2019.
is composed primarily of deferred
Unearned revenue
software, subscription and support revenue relating to periods
subsequent to year end. Unearned revenue amounts to
€76.4 million in 2020 compared to €73.2 million in 2019.
Note 21 Financial Commitments
Financial Instruments
At December 31, 2020 the fair value of instruments used to manage currency and interest rate exposure is as follows:
(in millions of euros)
Forward exchange contract Japanese yen/euros – sale(1)
Forward exchange contract British pounds/euros – sale(1)
Forward exchange contract Chinese yuan/euros(1)
Other instruments(2)
2020
Nominal
amount
63.8
22.5
3.1
4.5
Year ended December 31,
2019
Fair value Nominal amount
Fair value
4.7
0.7
-
-
143.0
54.6
35.2
10.2
(2.0)
(1.6)
-
-
(1) Instruments (hedge accounting) entered into by the Company to hedge the foreign currency exchange risk of forecasted royalty flows.
(2) Mainly derivatives designated as isolated open position.
At the end of 2020, foreign exchange contracts mentioned
above have maturity dates of less than two years.
The Company also hedges its foreign exchange risk by
designating the term loan in U.S. dollar at variable rate,
as a net investment hedge for the acquisition of Medidata
in the United States. In 2019, the initial amount hedged
was USD 530.0 million. In 2020, part of this term loan was
redeemed early for USD 230.0 million reducing the nominal
value of this term loan to USD 300.0 million (See Note 17
Financial Liabilities).
Increases and Reductions in Future Income Tax Payable
Increases and reductions in future income tax payable are evaluated on the basis of the standard corporate tax rate, plus extraordinary
contributions when applicable.
(in millions of euros)
Nature of temporary differences
SHORT TERM (28.40% TAX RATE FOR 2020 AND 32.02% FOR 2019)
Provision for employee profit-sharing
Depreciation of receivables
Other
LONG TERM (25.83% TAX RATE FOR 2020 AND 2019)
Provision for post-employment benefits
TOTAL TEMPORARY DIFFERENCES
Net reduction of the future corporate tax debt
28.40% tax rate for 2020 and 32.02% for 2019
25.83% tax rate for 2020 and 2019
174
Year ended December 31,
2020
2019
72.1
29.7
13.5
28.9
64.0
64.0
136.1
20.5
16.5
53.1
30.1
13.9
9.1
33.8
33.8
86.9
17.0
8.7
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Parent company financial statements
4
Note 22 Other Commitments and Contingencies
Leases
The Company has leased approximately 57,000 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 as from the delivery date of an additional
building of approximately 13,000 square meters which
took place in the fourth quarter of 2016. Close to that site,
the Company also leases since October 2010 approximately
11,000 square meters more in a building located in Meudon-
La-Forêt.
In December 2019, the Company signed a new lease contract
for a firm period of 10 years from the delivery of an additional
building for its campus of Vélizy-Villacoublay of approximately
28,000 square meters of office space scheduled to take place
during the second quarter of 2023. Minimum future lease
payments until the end of the lease amount to approximately
€81.1 million. In this context, lease contracts of existing
buildings have been renegotiated, notably to extend their term
from 2026 to 2032.
On December 31, 2020, commitments amount
to
€392.6 million for real estate and equipment rentals (compared
with €413.6 million as of December 31, 2019) including
€370.7 million relating to the lease for the headquarters
in Vélizy-Villacoublay (compared with €387.3 million as
of December 31, 2019); and €7.2 million (compared with
€9.0 million as of December 31, 2019) related to the lease of
the “Terre Europa” site, next to the headquarters, effective as
from July 2011.
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. Certain 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 payments to the French tax authorities for a total
amount of €144.9 million, including €123.1 million as
at December 2019, that are disputed or will be disputed
with the relevant authorities. In June 2019, following the
decision of the Appeal Court during the second quarter of
2019, the Company lodged an Appeal in Cassation before
the High Court (or Supreme Court) in relation to this dispute.
In September 2020, the High Court has denied the Court of
Appeal decision and referred the litigation to a new Chamber
of the Appeal Court.
It is not possible to determine with certainty the outcome of the
dispute and notably the resulting expense for the Company, if
any. The total amount paid to the tax authorities represents
the current Company’s maximum exposure. However, in the
opinion of management, after consultation with its lawyers,
the resolution of such litigation and proceedings should not
have a material effect on the consolidated financial statements
of the Company.
Guarantee pledged
The Group has a central cash management operated by a
banking institution. In this context, the parent company of
the bank offered a guarantee to one entity of the Group in
the amount of USD 500 million, and at the same time the
Company has contracted a guarantee to the bank for the same
amount.
Moreover, the Company provides guarantees in the framework
of contracts between subsidiaries and third parties for a total
amount of €28.1 million at December 31, 2020.
Note 23 Additional Information
Events after the reporting period
Identity of the Consolidating Company
None.
Dassault Systèmes SE’s business is included in the consolidated
financial statements of Groupe Industriel Marcel Dassault SAS,
whose registered office is located at 9, Rond-Point des
Champs-Élysées – Marcel Dassault, 75008 Paris, France.
175
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
Note 24 Information Relating to Subsidiaries and Shareholdings
As the Company publishes consolidated accounts, information relating to subsidiaries and shareholdings are presented in
aggregated form.
(in millions of euros)
Gross book value of shares
Net book value of shares
Loans and advances
Guarantees provided*
Dividend rights received
*
See Note 22 Other Commitments and Contingencies.
Subsidiaries
French
324.3
324.3
316.0
-
-
Foreign
6,599.5
6,546.7
-
435.6
235.6
Total
6,923.8
6,871.0
316.0
435.6
235.6
176
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Financial statements
Parent company financial statements
4
4.2.2 Selected financial and other information
for Dassault Systèmes SE over the last five years
(in euros)
Share capital
Share Capital
2016
2017
2018
2019
2020
128,998,301
130,466,265
131,366,470
132,019,000
132,568,118
Number of shares authorized and issued
257,996,603
260,932,531
262,732,941
264,038,001
265,136,237
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
Personnel
Average headcount(2)
1,350,178,886 1,468,591,921 1,589,407,627 1,726,957,134 1,716,366,015
508,202,894
567,265,426
598,767,852
789,360,442
674,295,745
429,982,212
463,298,523
485,909,988
695,811,645
537,496,840
57,113,129
69,972,918
49,799,790
40,582,203
53,986,553
23,457,774
24,439,598
28,178,726
29,500,621
28,136,994
23,457,773
24,463,855
27,919,810
29,003,135
28,136,984
269,585,830
257,812,287
331,248,341
279,583,248
412,948,808
1.26
1.04
0.53
1.32
0.99
0.58
1.45
1.26
0.65
2.26
1.06
0.70
1.61
1.56
0.56(1)
3,030
3,263
3,374
3,595
3,706
Personnel costs paid during the year
255,040,681
288,877,319
345,379,869
354,336,522
355,333,675
Social security contributions paid during the year
121,906,769
140,138,953
158,857,795
173,037,539
167,236,417
(1) To be proposed for approval at the General Meeting scheduled for May 26, 2021.
(2) Apprentices and professional training contractors are excluded.
177
DASSAULT SYSTÈMES ANNUAL REPORT 20204 4 Financial statements
Parent company financial statements
4.2.3 Statutory Auditors’ Report on the parent
company 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 readers. This report includes information specifically required by European regulations or French law, such
as information about the appointment of Statutory Auditors. 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 of Dassault Systèmes SE,
Opinion
In compliance with the engagement entrusted to us by your General Meeting of Shareholders, we have audited the accompanying
financial statements of Dassault Systèmes SE for the year ended December 31, 2020.
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 at December 31, 2020 and of the results of its operations for the year then ended in accordance with French accounting
principles.
The audit opinion expressed above is consistent with our report to the Audit Committee.
Basis for opinion
Audit framework
We conducted our audit in accordance with professional standards applicable in France. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under these standards are further described in the “Responsibilities of the Statutory Auditors relating to the
audit of the financial statements” section of our report.
Independence
We conducted our audit engagement in compliance with the independence rules provided for in the French Commercial Code (Code
de commerce) and the French Code of Ethics (Code de déontologie) for Statutory Auditors for the period from January 1, 2020 to
the date of our report, and, in particular, we did not provide any non-audit services prohibited by Article 5(1) of Regulation (EU)
No. 537/2014.
Justification of assessments – Key audit matters
Due to the global crisis related to the Covid-19 pandemic, the financial statements of this period have been prepared and audited
under specific conditions. Indeed, this crisis and the exceptional measures taken in the context of the state of sanitary emergency
have had numerous consequences for companies, particularly on their operations and their financing, and have led to greater
uncertainties on their future prospects. Those measures, such as travel restrictions and remote working, have also had an impact
on the companies’ internal organization and the performance of the audits.
It is in this complex and evolving context that, in accordance with the requirements of Articles L. 823-9 and R. 823-7 of the
French Commercial Code relating to the justification of our assessments, we inform you of the key audit matters relating to
the risks of material misstatement that, in our professional judgment, were the most significant in our audit of the financial
statements, as well as how we addressed those risks.
These matters were addressed as part of our audit of the financial statements as a whole, and therefore contributed to the opinion
we formed as expressed above. We do not provide a separate opinion on specific items of the financial statements.
Recognition of revenue from complex contractual arrangements
Description of risk
As described in the section entitled “Revenue” of Note 2 “Summary of Significant Accounting Policies” to the financial statements,
the Company derives revenue from multiple sources, chief among them software licenses, subscriptions, support and services.
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Where contractual arrangements include multiple elements sold as a single package, determining the date of recognition of the
resulting revenue and how that revenue should be allocated between the various performance obligations can be difficult and can
require a significant degree of judgment from management.
The revenue for each element of the complex contractual arrangements is allocated to each distinct performance obligation
based on their stand-alone selling price. With respect to perpetual software licenses only sold bundled with one year of support,
the stand-alone selling price is determined using the residual approach. Allocating revenue between the various performance
obligations requires analyses by management and, potentially, adjustments, both of which can be complex.
In addition, when a software license sale is combined with a service deemed essential to the functionality of the software, the
two performance obligations (software and service) are not distinct. Therefore, the license revenue is recognized as and when
the service obligation is recognized. Determining whether or not a service is essential to the functionality of a product requires
significant judgment from management, as does analyzing the potential future profits to be gained from the corresponding long-
term contract.
Moreover, recognizing revenue from complex contractual arrangements typically requires an in-depth analysis of contractual
terms and conditions, together with other relevant documentation shared with customers during negotiations, with a view to
ascertaining the full scope and type of the elements the Company has committed to providing and thus recognizing the revenue
for each element on the appropriate date and at the appropriate value.
For the above reasons, we deemed the recognition of revenue from complex contractual arrangements to be a key audit matter.
How our audit addressed this risk
In the course of our audit, we gained an understanding of internal control systems relating to the recognition of revenue that were
implemented by the Company and tested the key controls relating to these systems that we considered to be the most relevant.
Throughout the year, we performed analyses on all complex contractual arrangements deemed material, as well as on a sample
of randomly selected arrangements, with the aim of verifying that management’s judgments in terms of the allocation of
revenue between each performance obligation were consistent with the Company’s accounting policies, and that revenue had
been recognized for the correct amount and with respect to the appropriate reporting period. Our work consisted primarily in
analyzing the contractual terms and conditions, re-calculating the stand-alone selling price of each element tested, analyzing
the essentiality criteria for services associated with software sales and verifying the consistency of revenue recognition with the
Company’s accounting policies and French accounting principles.
We also tested all significant manual accounting entries affecting revenue from complex contractual arrangements for consistency
with the Company’s accounting policies.
Lastly, we examined the related disclosures provided in Notes 2 and 3 to the financial statements.
Valuation of investments in subsidiaries and loans and advances to subsidiaries
Description of risk
As described in Note 24 to the financial statements, investments in subsidiaries and loans and advances to subsidiaries amounted
to €6,871 million and €316 million respectively at December 31, 2020, therefore representing some of the largest assets on the
balance sheet. Investments in subsidiaries are carried at cost and may be impaired, as applicable, based on their values in use.
As indicated in the section entitled “Non-current Financial Assets” of Note 2 to the financial statements, the calculation of value
in use takes into account the share of equity in the relevant subsidiaries at the reporting date, together with their long-term
profitability and strategic factors. Estimating net realizable value therefore requires management to exercise judgment, relying
on forecasts to define the profitability outlook.
Accordingly, due to the inherent uncertainty of certain components of the valuation, in particular the likelihood of achieving
projections, we deemed the valuation of investments in subsidiaries and loans and advances to subsidiaries to be a key audit
matter.
How our audit addressed this risk
In order to assess the estimated values in use of investments in subsidiaries and loans and advances to subsidiaries, based on
the information provided to us, our audit work consisted primarily in examining the estimated values in use determined by
management in relation to the valuation method and underlying data:
} for valuations based on historical data, we ensured that the equity values used were consistent with the financial statements
of the entities concerned;
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} for valuations based on forecast data, we obtained management’s analyses on the profitability outlook and the strategic nature
of these entities.
With the assistance of our valuation experts, we assessed the consistency of the assumptions used with the economic environment
at the reporting date and at the date on which the financial statements were prepared.
Where the value in use was lower than the acquisition value of an investment, we assessed whether an appropriate impairment
loss had been recorded and, where appropriate, whether a provision for contingencies had been recognized with respect to the
subsidiary in question and to any loans or advances granted to that subsidiary.
Lastly, we examined the related disclosures provided in Notes 2 and 24 to the financial statements.
Tax risks
Description of risk
The Company carries out its business activities in many countries and must therefore abide by multiple different laws and
regulations. This is particularly the case for tax regulations, which can be a source of risk for the Company in terms of how they
are applied and that may involve tax disputes.
The Company assesses its tax positions and their technical justifications at the end of each reporting period. Where a risk in terms
of how the local tax rules should be applied is identified, the Company measures and records a provision for tax risk if an outflow
of resources appears likely. Conversely, when it makes a payment further to a disputed tax reassessment and where it deems its
position in that dispute to be technically justified, the Company simultaneously records a tax credit for the refund it will likely
receive.
As it relates to the ongoing tax disputes, some concern tax reassessments relating to acquisition financing. Accordingly, between
2014 and 2020, the Company made payments totaling €144.9 million to the French tax authorities further to adjustments of
the tax bases for the relevant years audited, as described in Note 22 to the financial statements, and generated a tax credit for
the same amount, as indicated in Note 13 to the financial statements. In this case, there is a risk that the tax credit will not be
recovered.
Given (i) the materiality of the ongoing tax disputes and (ii) the complex technical analyses required for their assessment, we
deemed the assessment of tax risks to be a key audit matter. These analyses are specific to each tax jurisdiction and require a
significant degree of judgment from management. Moreover, they are ultimately subject to a final decision from the local tax
authorities concerned.
How our audit addressed this risk
With guidance from experts in international and French tax law, we examined the main grounds for reassessment cited by the
local tax authorities against the Company, as well as the judgments made by management with respect to tax risks and disputes
deemed significant. We also reconciled the assumptions and estimates used to recognize tax provisions with the Company’s
accounting policies and French accounting principles.
For the most significant disputes for which a tax credit was recognized, in particular the reassessments relating to the above-
mentioned acquisition financing matter, we also analyzed the technical opinions obtained by the Company from independent
tax lawyers with a view to assessing the consistency thereof with the judgments made by management and the accounting
treatments applied.
Lastly, we examined the related disclosures provided in Notes 13 and 22 to the financial statements.
Specific verifications
In accordance with professional standards applicable in France, we have also performed the specific verifications required by
French legal and regulatory provisions.
Information given in the management report and in the other documents provided to the shareholders with
respect to the Company’s financial position and the financial statements
We have no matters to report as to the fair presentation and the consistency with the financial statements of the information
given in the Board of Directors’ management report and in the other documents provided to the shareholders with respect to the
Company’s financial position and the financial statements.
We attest to the fair presentation and the consistency with the financial statements of the information about payment terms
referred to in Article D. 441-4 of the French Commercial Code.
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Report on corporate governance
We attest that the Board of Directors’ report on corporate governance sets out the information required by Articles L. 225-37-4,
L. 22-10-10 and L. 22-10-9 of the French Commercial Code.
Concerning the information given in accordance with the requirements of Article L. 22-10-9 of the French Commercial Code
relating to compensation and benefits paid or awarded to corporate officers and any other commitments made in their favor, 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 the Company from controlled companies within its scope of
consolidation. Based on this work, we attest to the accuracy and fair presentation of this information.
Concerning the information given in accordance with the requirements of Article L. 22-10-11 of the French Commercial Code
relating to those items the Company has deemed liable to have an impact in the event of a takeover bid or exchange offer, we
have verified its consistency with the underlying documents that were disclosed to us. Based on this work, we have no matters
to report with regard to this information.
Other information
In accordance 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 the voting rights has been properly disclosed in the
management report.
Other verifications and information pursuant to legal and regulatory requirements
Presentation of the financial statements to be included in the annual financial report
In accordance with professional standards applicable to the Statutory Auditors’ procedures for annual and consolidated financial
statements presented according to the single European electronic reporting format, we have verified that the presentation of
the financial statements to be included in the annual financial report referred to in paragraph I of Article L. 451-1-2 of the
French Monetary and Financial Code (Code monétaire et financier) and prepared under the Chief Executive Officer’s responsibility,
complies with this format, as defined by European Delegated Regulation No. 2019/815 of December 17, 2018.
On the basis of our work, we conclude that the presentation of the financial statements to be included in the annual financial
report complies, in all material respects, with the single European electronic reporting format.
It is not our responsibility to ensure that the financial statements to be included by the Company in the annual financial report
filed with the AMF correspond to those on which we carried out our work.
Appointment of the Statutory Auditors
We were appointed Statutory Auditors of Dassault Systèmes SE by the General Meeting of Shareholders held on June 8, 2005 for
PricewaterhouseCoopers Audit and on May 27, 2010 for Ernst & Young et Autres.
At December 31, 2020, PricewaterhouseCoopers Audit and Ernst & Young et Autres were in the sixteenth and eleventh consecutive
year of their engagement, respectively.
Previously, Ernst & Young Audit was the Statutory Auditor of Dassault Systèmes SE from 1998.
Responsibilities of management and those charged with governance for the financial statements
Management is responsible for preparing financial statements giving a true and fair view in accordance with French accounting
principles, and for implementing the internal control procedures it deems necessary for the preparation of financial statements
that are free of material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless it
expects to liquidate the Company or to cease operations.
The Audit Committee is responsible for monitoring the financial reporting process and the effectiveness of internal control and
risk management systems, as well as, where applicable, any internal audit systems, relating to accounting and financial reporting
procedures.
The financial statements were approved by the Board of Directors.
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Responsibilities of the Statutory Auditors relating to the audit of the financial statements
Objective and audit approach
Our role is to issue a report on the financial statements. Our objective is to obtain reasonable assurance about whether the
financial statements as a whole are free of material misstatement. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with professional standards will always detect a material misstatement when
it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions taken by users on the basis of these financial statements.
As specified in Article L. 823-10-1 of the French Commercial Code, our audit does not include assurance on the viability or quality
of the Company’s management.
As part of an audit conducted in accordance with professional standards applicable in France, the Statutory Auditors exercise
professional judgment throughout the audit.
They also:
} identify and assess the risks of material misstatement in the financial statements, whether due to fraud or error, design and
perform audit procedures in response to those risks, and obtain audit evidence considered to be sufficient and appropriate
to provide a basis for their opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for
one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control;
} obtain an understanding of the internal control procedures relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control;
} evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management
and the related disclosures in the notes to the financial statements;
} assess the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s
ability to continue as a going concern. This assessment is based on the audit evidence obtained up to the date of the audit
report. However, future events or conditions may cause the Company to cease to continue as a going concern. If the Statutory
Auditors conclude that a material uncertainty exists, they are required to draw attention in the audit report to the related
disclosures in the financial statements or, if such disclosures are not provided or are inadequate, to issue a qualified opinion or
a disclaimer of opinion;
} evaluate the overall presentation of the financial statements and assess whether these statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Report to the Audit Committee
We submit a report to the Audit Committee which includes, in particular, a description of the scope of the audit and the audit
program implemented, as well as the results of our audit. We also report any significant deficiencies in internal control that we
have identified regarding the accounting and financial reporting procedures.
Our report to the Audit Committee includes the risks of material misstatement that, in our professional judgment, were the most
significant for the audit of the financial statements and which constitute the key audit matters that we are required to describe
in this report.
We also provide the Audit Committee with the declaration provided for in Article 6 of Regulation (EU) No. 537/2014, confirming
our independence within the meaning of the rules applicable in France, as defined in particular in Articles L. 822-10 to L. 822-14
of the French Commercial Code and in the French Code of Ethics for Statutory Auditors. Where appropriate, we discuss any risks
to our independence and the related safeguard measures with the Audit Committee.
Neuilly-sur-Seine and Paris-La Défense, March 18, 2021
The Statutory Auditors
French original signed by
PricewaterhouseCoopers Audit
Thierry Leroux
Ernst & Young et Autres
Nour-Eddine Zanouda
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4.2.4 Statutory Auditors’ Special Report on Related Party
Agreements
This is a free translation into English of the Statutory Auditors’ special report on related-party agreements issued in French 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 SE, we hereby report to you on related-party agreements.
It is our responsibility to report to shareholders, based on the information provided to us, on the main terms and conditions of
agreements that have been disclosed to us or that we may have identified as part of our engagement, as well as the reasons
given as to why they are beneficial for the Company, without commenting on their relevance or substance or identifying any
undisclosed agreements. Under the provisions of Article R. 225-31 of the French Commercial Code (Code de commerce), it is the
responsibility of the shareholders to determine whether the agreements are appropriate and should be approved.
Where applicable, it is also our responsibility to provide shareholders with the information required by Article R. 225-31 of
the French Commercial Code in relation to the implementation during the year of agreements already approved by the Annual
General Meeting.
We performed the procedures that we deemed necessary in accordance with professional standards applicable in France to
such engagements. These procedures consisted in verifying that the information given to us is consistent with the underlying
documents.
Agreements submitted for the approval of the Annual General Meeting
We were not informed of any agreements authorized and entered into during the year to be submitted for the approval of the
Annual General Meeting pursuant to the provisions of Article L. 225-38 of the French Commercial Code.
Agreements already approved by the Annual General Meeting
Agreements approved in previous years that were implemented during the year
We were not informed of any agreements already approved by the Annual General Meeting in previous years, which were
implemented during the year.
Agreements and commitments approved in previous years that were not implemented during the year
We were informed of the following agreements approved by the Annual General Meeting in previous years, which remained in
force but were not implemented during the year.
With the Company’s Board members, in connection with the insurance policy “Civil liability of Directors and Corporate
Officers” signed with the insurance company Allianz
Advance payment to Board members of any legal fees incurred in proceedings instituted against them in the exercise of their
corporate office.
At its meeting on July 24, 1996, the Board of Directors authorized the advance payment by the Company of any legal fees and
financial consequences that the Board members could incur if their personal liability is sought, in the event that the insurance
policy signed with Allianz does not cover these advances and financial consequences.
Payment of legal fees of Board members for any proceedings instituted in the United Sates.
At its meeting on September 23, 2003, the Board of Directors authorized the payment by the Company of any fees and travel
expenses that the Board members of the Company and its subsidiaries have to pay to prepare their personal defense before a
civil, criminal or administrative Court in the United States within the scope of an inquiry or investigations carried out against the
Company.
Neuilly-sur-Seine and Paris-La Défense, March 18, 2021
The Statutory Auditors
French original signed by
PricewaterhouseCoopers Audit
Thierry Leroux
Ernst & Young et Autres
Nour-Eddine Zanouda
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Legal and Arbitration Proceedings
4.3 Legal and Arbitration Proceedings
In the ordinary course of business, Dassault Systèmes is
involved from time to time in litigation, tax audits or regulatory
inquiries. Dassault Systèmes is subject to ongoing tax audits
and tax reassessments in jurisdictions in which it has or had
operations. Certain reassessments have been contested and
Dassault Systèmes is under discussion with the relevant tax
authorities. To Dassault Systèmes’ 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 Annual Report
(Document d’enregistrement universel), or is likely to have, a
significant impact on Dassault Systèmes’ financial position or
results of operations.
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CORPORATE
GOVERNANCE
5.1 The Board’s Corporate
Governance Report
5.2.2 Internal Control Participants and Organization
229
186
5.2.3 Internal Control and Risk Management Procedures 230
5.1.1 Composition and Practices of the Board of Directors 187
5.1.2 Executives of Dassault Systèmes
5.1.3 Compensation Policy for Corporate Officers
5.1.4 Summary of the Compensation and Benefits due
to Corporate Officers (mandataires sociaux)
5.1.5 Interests of executive management and
employees in the share capital of Dassault
Systèmes SE
5.1.6 Application of the AFEP-MEDEF Code
5.1.7 Other Information Required by Articles L. 225-37
and L. 22- 10-8 et seq. of the French Commercial
Code
205
206
211
219
225
225
5.2.4 Internal Control Procedures Relating to the
Preparation and Treatment of Financial and
Accounting Information
5.2.5 Evaluation of Internal Control
5.2.6 Limitations of Internal Control
5.3 Transactions in Dassault Systèmes
shares by the Management
of Dassault Systèmes
5.4 Information on the Statutory
Auditors
5.2 Internal Control Procedures and
Risk Management
5.2.1 Definition and Objectives of Internal Control
229
229
5.5 Declarations regarding the
administrative and management
bodies
231
232
232
233
237
237
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DASSAULT SYSTÈMES ANNUAL REPORT 2020CONTENTS 5 Corporate governance
The Board’s Corporate Governance Report
5.1 The Board’s Corporate Governance Report
Report of the Board of Directors to the Combined General
Meeting of May 26, 2021
compensation of Mr. Bernard Charlès, Vice-Chairman of the
Board and Chief Executive Officer.
To the Shareholders of Dassault Systèmes,
The purpose of this report is to describe inter alia the
composition and practices of the Board of Directors of
Dassault Systèmes SE, the application thereto of the principle
of balanced representation of men and women and the policy
and details of the corporate officers’ remuneration.
This report was drawn up in accordance with the French
Commercial Code and the regulations of the Financial Markets
Authority (AMF), based on work carried out by the Finance,
Legal and Internal Audit departments of Dassault Systèmes. It
has been reviewed by the Audit Committee and approved by
the Board of Directors on March 18, 2021.
Since its IPO in 1996, Dassault Systèmes complies with
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.com) and therefore summarizes
in a table the reasons why it does not apply certain of these
recommendations (see paragraph 5.1.6 “Application of the
AFEP-MEDEF Code”).
Dassault Systèmes would like to draw the attention of
shareholders to the following points.
Purpose and consideration by the Board of social and
environmental issues
In February 2012, and driven by the Chief Executive Officer,
Dassault Systèmes published its purpose, which aims at
contributing to sustainable development in all its components:
to provide business and people with 3D experience universes
(3DEXPERIENCE) to imagine sustainable innovations, capable
of harmonizing products, nature and life.
This purpose determines not only the selection of acquisitions
and product developments but also the culture and values of
the Company and of each one of its organizations.
Social, societal and environmental responsibility is therefore
central to Dassault Systèmes’ strategy and its achievements.
It is applied to all levels of the Company.
Within the Board of Directors, Dassault Systèmes appointed
an independent director – Ms. Toshiko Mori, an architect
committed to sustainable future thinking – as lead director
for sustainable development matters and their presentation
to the Board of Directors. The Board of Directors has also
included Environmental, Social and Governance (ESG) criteria
in the performance criteria triggering payment of the variable
At Operational Executive Committee level, Florence Verzelen,
Executive Vice President, Industry, Marketing & Sustainability,
is
responsible for the Dassault Systèmes sustainable
development roadmap in terms of environmental footprint
and product development strategy to help customers become
more sustainable (handprint).
Every month, the Sustainable Development Committee brings
together all the key functions of the Company to discuss action
plans and the progress made on cross-functional matters. This
committee is co-chaired by Florence Verzelen and Thibault de
Tersant, General Secretary of Dassault Systèmes. The Chief
Sustainability Officer of Dassault Systèmes is secretary of the
committee.
From an operational perspective, the sustainable development
team coordinates a community of contacts across business
functions, geographies, brands and
industries on a
quarterly basis to ensure in particular the implementation
of sustainability action plans and the reporting of our
environmental footprint.
In 2020, Dassault Systèmes placed a special focus on the
formalization of
its sustainable development objectives
and practices, in particular with the announcement, in
February 2020, of social, societal and environmental targets
for 2025 (see paragraph 1.8 “Extra-financial performance”).
Social and societal responsibility during COVID-19
pandemic
Dassault Systèmes’ employees are the Company’s most
precious asset. They are at the heart of our mission and long-
term development. As soon as March 2020, Dassault Systèmes
made a commitment to preserve the jobs of its employees
by guaranteeing a stable workforce for the year 2020.
The Company has also maintained its annual compensation
policy and implemented measures to protect the health and
safety of its employees.
Dassault Systèmes has rolled out a number of initiatives to
support its customers, partners and communities around the
world during the COVID-19 pandemic. Thus, the availability of
the cloud-based 3DEXPERIENCE platform allowed for remote
working to ensure the continuity of sustainable innovation
projects and programs. Other measures have been taken to
support the ecosystem, in particular small and medium-sized
companies: as soon as April 2020, the Company has reduced
its suppliers’ payment terms and extended its distributors’
payment terms, in both instances to help improving their
cash flow.
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5
Shareholder dialogue
Dassault Systèmes is committed to meeting the expectations
and concerns of its shareholders. Meetings were held in 2020
and 2021 between Dassault Systèmes investors and proxy
advisors on one hand, and the Investor Relations Department
of Dassault Systèmes, the General Secretary, and the Secretary
of the Board on the other hand, to discuss issues of concern
to shareholders, including governance and social, societal and
environmental responsibility. Dassault Systèmes has taken
the comments submitted into consideration by changing
the wording of this Annual Report, in particular the report
on corporate governance, the chapter on social, societal and
environmental responsibility and the resolutions put to vote at
the General Shareholders’ Meeting.
5.1.1 Composition and Practices of the Board of Directors
5.1.1.1
Composition of the Board of Directors
As of the date of this Annual Report, the Board of Directors of
Dassault Systèmes SE comprises 12 members(1) whose term of
office is four renewable years:
} Charles Edelstenne (Chairman);
} Bernard Charlès (Vice-Chairman);
} Pascal Daloz(2);
} Xavier Cauchois;
} Catherine Dassault;
} Odile Desforges;
} Soumitra Dutta;
} Marie-Hélène Habert-Dassault;
} Laurence Lescourret;
} Toshiko Mori;
} Hervé Andorre (director representing employees)(3);
} Tanneguy de Fromont de Bouaille (director representing
employees)(3).
In the composition of the Board of Directors, Dassault
Systèmes seeks a balance between experienced and new
directors, between
independent and non-independent,
between women and men, as well as a diversity of profiles,
nationalities and qualifications. Dassault Systèmes monitors
the evolution of the composition of the Board by making
projections based on all of these criteria, which has resulted in
greater diversity within the Board in recent years.
Skills in line with Dassault Systèmes’ strategy
The directors of Dassault Systèmes SE have a complementary
set of skills and experience that line up with the Company’s
strategy, and enable it to respond to the challenges it faces.
Among the five independent directors, three have industrial
expertise (the manufacturing industry, infrastructures and
cities and new technologies) and two have accounting and
financial expertise. The non-independent directors provide
the Board with extensive knowledge of the Company and its
industry and businesses.
In addition, social, societal and environmental responsibility
being the focus of Dassault Systèmes’ strategy and of its
achievements, Ms. Toshiko Mori – architect and independent
director – is since the beginning of 2020 lead director for
sustainable development matters on the Board of Directors.
(1) The Board of Directors was composed of 11 members until May 26, 2020, date on which Mr. Hervé Andorre was appointed as a Director representing
employees.
(2) Following the resignation of Mr. Thibault de Tersant from his term of office as Director, on July 22, 2020, the Board of Directors decided to co-opt
Mr. Pascal Daloz for the remainder of the term of office, i.e. until the General Meeting called to approve the financial statements for the year ended
December 31, 2021.
(3) The two directors representing the employees were appointed, in accordance with the Company’s by-laws, by the two trade unions that obtained the
highest number of votes in the first round of the Economic and Social Committee in Dassault Systèmes SE and its direct or indirect subsidiaries whose
registered office is located on French territory.
The term of office of Mr. Tanneguy de Fromont de Bouaille, which expired on May 26, 2020, was renewed by the organization that appointed him.
Mr. Hervé Andorre was appointed as Director representing employees as from the General Shareholders’ Meeting of May 26, 2020 which amended the
Dassault Systèmes SE by-laws to allow the appointment of a second Director representing employees.
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A percentage of independent directors greater than
the recommendations of the AFEP-MEDEF Code
The proportion of independent directors within the Board of
Directors of Dassault Systèmes SE is 50%(1), above the ratio
of one third recommended by the AFEP-MEDEF Code for
controlled companies.
To assess such independence, Dassault Systèmes SE bases its
decision on the definition of the AFEP-MEDEF Code, which
has been incorporated into the rules of procedure of the Board
of Directors, whereby a director is independent when he or she
has no relationship whatsoever with Dassault Systèmes SE,
the Company or its management, which might compromise
his or her free judgment. At its meeting of March 18, 2021,
the Board of Directors assessed, as it does every year, the
independence of its members and concluded that five directors
are independent: Ms. Desforges, Ms. Lescourret, Ms. Mori,
Mr. Cauchois and Mr. Dutta. This decision by the Board is
based on the answers from the directors to a dedicated
questionnaire.
As none of the independent directors have a business
relationship with Dassault Systèmes, the Board of Directors
had to express an opinion, as at present, neither on the
materiality of any such relationship nor on the criteria used
to assess it.
A percentage of women above the 40% threshold
required by the law
Dassault Systèmes SE is also committed to ensure significant
representation of women on the Board. With 50% women
directors(1), Dassault Systèmes SE is above the 40% threshold
required by law. This percentage is an increase from 42% in
2018. A woman has also been the chair of the Compensation
and Nomination Committee since 2018.
Lastly, in terms of internationalization, the Board has two non-
French members (a Japanese and an Indian director) and who
are as well U.S. residents, accounting for 17% of the members.
The average age of the directors is 61 at the date of this
Annual Report.
The above information is summarized in the table below.
(1) Excluding Directors representing employees, in accordance with the law and the AFEP-MEDEF Code.
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COMPOSITION OF THE BOARD OF DIRECTORS OF DASSAULT SYSTÈMES SE*
PERSONAL INFORMATION EXPERIENCE
POSITION ON THE BOARD
Age Gender Nationality
Number of
shares
Number of
terms of
office in
listed
companies(1)
Independence
Initial date of
appointment
Expiry of
the term
of office
Length of
service on
the Board
PARTICIPATION
IN BOARD
COMMITTEES
DIRECTORS
EXECUTIVE
OFFICERS
Charles Edelstenne
Bernard Charlès
DIRECTORS
Pascal Daloz
Xavier Cauchois
Catherine Dassault
Odile Desforges
Soumitra Dutta
Marie-Hélène Habert-
Dassault
Laurence Lescourret
Toshiko Mori
DIRECTORS
REPRESENTING
EMPLOYEES
83
63
52
63
53
71
57
55
47
69
Hervé Andorre
Tanneguy de
Fromont de Bouaille
55
66
H
H
H
H
F
F
H
F
F
F
H
H
France 15,897,485
France 4,290,441
France
France
France
France
India
France
France
Japan
474,859
300
2,419
300
100
566
301
600
France
7,372
France
13,307
* As of the date of this Annual Report.
(1) Number excluding the term of office held within Dassault Systèmes SE.
(2) Re-appointment proposed to the General Meeting of May 26, 2021.
3
1
0
1
1
2
0
3
1
0
0
0
04/08/1993
2022
28 years
04/08/1993
2022
28 years
07/22/2020
X 05/22/2018
07/20/2016
2022
2022
2023
X 05/30/2013
2021(2)
X 05/23/2017
2021(2)
Less
than
1 year
3 years
5 years
8 years
4 years
07/23/2014
X 05/26/2016
2024
2024
7 years
5 years
X 05/26/2011
2023
10 years
05/26/2020
2024
Less
than
1 year
06/24/2016
2024
5 years
X
X
X
X
X
The roles and duties performed by the Dassault Systèmes SE corporate officers in 2020 are indicated in the table below.
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CHARLES EDELSTENNE – CHAIRMAN OF THE BOARD
Biography: Charles Edelstenne is currently Chairman of the Board
of Directors after having subsequently occupied the positions
of Manager and then Chairman and Chief Executive Officer of
Dassault Systèmes of which he is the founder.
He is also Chairman of Groupe Industriel Marcel Dassault (GIMD)(1).
Charles Edelstenne is as well Honorary Chairman and Director
of Dassault Aviation after having occupied the positions of Vice-
President responsible for economic and financial affairs (1986-
2000), General Secretary (1975-1986) and Chairman and Chief
Executive Officer (2000-2013).
He holds a chartered accountant qualification.
Term expires: General Meeting called to approve the financial
statements for the year ending December 31, 2021
Date of first appointment: 04/08/1993
Number of Dassault Systèmes shares owned at December 31, 2020:
15,897,485 (including a majority of beneficial ownership shares)
Attendance rate at the 2020 Board meetings: 100%
Age: 83
Nationality: French
Professional address: Groupe Industriel Marcel Dassault – 9
Rond-Point des Champs-Élysées – Marcel Dassault, 75008 Paris
– France
Other offices and positions:
Within the Dassault Group, in France: Chairman of GIMD;
Honorary Chairman and Director of Dassault Aviation SA (listed
company); Director of Thalès SA (listed company), Chairman of
the Board and Chief Executive Officer of Dassault Médias SA;
Chairman of Rond-Point Immobilier SAS; Chairman of Rond-
Point Holding SASU; Manager of Rond-Point Investissements
EURL; Manager of SCI de Maison Rouge; Chief Executive Officer
of Dassault Wine Estates SASU; Chairman and member of the
Board of Directors of Groupe Figaro SAS; Chairman of Société du
Figaro SAS
Within the Dassault Group, outside France: Director of Dassault
Falcon Jet Corporation (United States); Chairman and member of
the Board of Dassault Belgique Aviation SA
Outside the Dassault Group: Director of Carrefour SA (listed
company); Honorary Chairman of Gifas(2); Manager of the Arie,
Arie 2, Nili and Nili 2 partnerships
Other positions held, and expired, during the past five years:
Director of SABCA (listed company) (Belgium) until 2020; Director
of Banque Lepercq de Neuflize & Co. Inc. (USA) until 2019; Chief
Executive Officer and member of the Supervisory Board of GIMD
until May 28, 2018; Director of Dassault Médias SA and of Figaro
Benchmark SASU until May 2018; of Sogitec Industries SA until
December 2019.
(1) GIMD is the main shareholder of Dassault Systèmes SE (see paragraph 6.3.2 “Controlling Shareholder”).
(2) Groupement des Industries Françaises Aéronautiques et Spatiales.
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BERNARD CHARLÈS, VICE-CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
Biography: Bernard Charlès is Vice-Chairman of the Board of
Directors (since 2016) and Chief Executive Officer of Dassault
Systèmes (since 2002). Since 1995, Bernard Charlès has had
executive functions which he shared with Charles Edelstenne.
Prior to holding this position, Bernard Charlès served as Director
of the New Technology, Research and Development and Strategy
Department from 1986 to 1988 and as Director of Strategy,
Research and Development from 1988 to 1995.
Age: 63
Nationality: French
Professional address: Dassault Systèmes – 10 rue Marcel-
Dassault, 78140 Vélizy-Villacoublay – France
Main position: Vice-Chairman of the Board of Directors and Chief
Executive Officer of Dassault Systèmes
Term expires: General Meeting called to approve the financial
statements for the year ending December 31, 2021
Date of first appointment: 04/08/1993
Number of Dassault Systèmes shares owned at December 31, 2020:
4,290,441
Attendance rate at the 2020 Board meetings: 100%
Main other offices and positions:
Within the Dassault Systèmes Group, outside France: Chairman
of the Board of Directors of Dassault Systemes Corp. (United
States) and Centric Software, Inc. (United States); Chairman
of the advisory Board (statutory body) of Dassault Systemes
3DEXCITE GmbH (Germany)
Outside the Dassault Systèmes Group, in France: Independent
Director of Sanofi (listed company)
Other positions held, and expired, during the past five years
(all within the Dassault Systèmes Group, outside France):
Chairman of the Board of Directors of Dassault Systemes
SOLIDWORKS Corp. (United States) and of Dassault Systemes
SIMULIA Corp.. (United States); of BIOVIA Corp.. (United
States); IQMS (United States) and Dassault Systemes Canada
Software Inc. (Canada)
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PASCAL DALOZ – CHIEF OPERATING OFFICER & CHIEF FINANCIAL OFFICER
Biography: Biography: Pascal Daloz is Chief Operating Officer and
Chief Financial Officer since 2020. He joined Dassault Systèmes
in 2001 as Vice President R&D in charge of sales development
and then he has been Vice President, Strategy and Business
Development (2003), Executive Vice President, Strategy and
Marketing (2007), Executive Vice President, Corporate Strategy
and Market Development (2010), Executive Vice President, Brands
and Corporate Development (2014) and Chief Financial Officer
and Corporate Strategy Officer (2018). From 1992 to 1997 he
has been a consultant for technology innovation management at
Arthur D. Little, and then senior analyst for the technology sector
at Crédit Suisse First Boston Technology Group until 2001.
Term expires: General Meeting called to approve the financial
statements for the year ending December 31, 2021
Date of provisional appointment by decision of the Board of
Directors: 07/22/2020
Number of Dassault Systèmes shares owned at December 31, 2020:
474,859
Attendance rate at the 2020 Board meetings: 100%*
Age: 52
Nationality: French
Professional address: Dassault Systèmes – 10 rue Marcel-
Dassault, 78140 Vélizy-Villacoublay – France
Main function: Chief Operating officer & Chief Financial Officer of
Dassault Systèmes
Main other offices and positions:
Within the Dassault Systèmes Group, in France: President of
Outscale SAS
Within the Dassault Systèmes Group, outside France: Chairman
of the Board of Dassault Systemes Americas Corp.. (United
States) and Medidata Solutions Inc. (United States); Member
of the advisory Board (statutory body) of Dassault Systemes
3DEXCITE GmbH (Germany)
Outside the Dassault Systèmes Group: Director of Fondation
Mines-Télécom (France) and Institut d’Études Avancées de
Nantes (France); Honorary Co-Chairman of Alliance Industrie du
Futur (France)
Other positions held, and expired, during the past five years (all
within the Dassault Systèmes Group):
President of NETVIBES SAS (France) and 3DVIA SAS (France);
Chairman of the Board of NETVIBES Inc. (United States) and
Dassault Systemes 3DEXCITE Corp. (United States);
Director of Dassault Systemes SOLIDWORKS Corp. (United States),
Dassault Systemes SIMULIA Corp. (United States); BIOVIA Corp.
(United States) and IQMS (United States); managing director
of Dassault Systemes 3DEXCITE GmbH (Germany) and Quintiq
Holding B.V. (the Netherlands)
*
The percentage is calculated based on the Board meetings held on or after July 22, 2020.
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Age: 63
Nationality: French
Professional address: Dassault Systèmes – 10, rue Marcel
Dassault, 78140 Vélizy-Villacoublay – France
Main position: Director
XAVIER CAUCHOIS – INDEPENDENT DIRECTOR
Member of the Audit Committee since May 22, 2018
Chairman of the Audit Committee since May 23, 2019
Biography: Xavier Cauchois has more than 30 years of experience
in the audit, as a partner of PwC France in the Paris office. He
had several management positions within PwC France and at
the European level. He notably accompanied its clients in the
technology, telecoms, medias sectors, as well as in the health
sector and more generally in the industry.
He was head of PwC Europe and France in the Technology sector
until 2009 and also a member of the Global Strategic Committee
for the Audit from 2005 to 2008.
He was member of the Executive Committee France in charge of
“Partners & Strategy” from 2013 to 2016.
Term expires: General Meeting called to approve the financial
statements for the year ending December 31, 2021
Other offices and positions:
Technicolor SA (listed company)
Independent Director of
Date of first appointment: 5/22/2018
Other positions held, and expired, during the past five years:
Number of Dassault Systèmes shares owned at December 31, 2020:
300
Manager of PwC Business Services; Director of GIE
PricewaterhouseCoopers; Partner at PwC Audit
Attendance rate at the 2020 Board meetings: 100%
Attendance rate at the 2020 Audit Committee meetings: 100%
CATHERINE DASSAULT – DIRECTOR
Biography: Catherine Dassault is a lead director of development
of Institut de l’Engagement, which helps young volunteers
enrolled in France’s Civic Service scheme to pursue their studies,
find a job or set up their own business. Before devoting her time
to helping develop and fund medical research and education,
Catherine Dassault studied law and psychology and worked in the
advertising and communications industry.
Age: 53
Nationality: French
Professional address: Groupe Industriel Marcel Dassault – 9
Rond-Point des Champs-Élysées – Marcel Dassault, 75008 Paris
– France
Main position: Active member of associations recognized to be
of public interest; Lead Director of development of L’Institut de
l’Engagement
Term expires: General Meeting called to approve the financial
statements for the year ending December 31, 2022
Date of first appointment: 7/20/2016
Number of Dassault Systèmes shares owned at December 31, 2020:
2,419
Attendance rate at the 2020 Board meetings: 100%
Other offices and positions:
Director of Dassault Aviation SA (listed company); Manager of
Green Spark Invest SARL and of TCBD & Fils (partnership); Chair
of the Fonds de dotation Citadelle (since September 2020)
Other positions held, and expired, during the past five years:
Member of the Organizing Committee and the Honorary
Committee of the French Alzheimer’s Research Association
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ODILE DESFORGES – INDEPENDENT DIRECTOR
Member of the Audit Committee
Biography: Odile 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
as manager for external equipment. She then became 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 in 2001 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 (RNPO). Between March 1, 2009 and July 1, 2012,
she was Executive Vice-President, Engineering and Quality, and a
member of the Group Executive Committee.
Term expires: General Meeting called to approve the financial
statements for the year ended December 31, 2020
Date of first appointment: 5/30/2013
Number of Dassault Systèmes shares owned at December 31, 2020:
300
Attendance rate at the 2020 Board meetings: 75%
Attendance rate at the 2020 Audit Committee meetings: 87.50%
Age: 71
Nationality: French
Professional address: 3 rue Henri Heine, 75016 Paris – France
Main position: Director
Other offices and positions:
Independent Director of Safran and Faurecia (listed companies)
Other positions held, and expired, during the past five years:
Director of Imerys (until May 2020); RNBV; RNTBCI; Renault
Espana SA; Sequana and Johnson Matthey Plc (United Kingdom)
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Age: 57
Nationality: Indian
Professional address: College of Business – Cornell University –
Ithaca, New York (United States)
Main position: Former Dean and Professor of Operations,
Technology and Information Management, SC Johnson College of
Business Cornell University
Other offices and positions:
Chairman of the Board of Directors of The Global Business
Schools Network (GBSN), (United States); Member of the Board
of Shareholders of ZS Associates (United States)
Other positions held, and expired, during the past five years:
Director of Sodexo (listed company) (until January 2021) and
Chairman of the Board of Directors of The Association to Advance
Collegiate Schools of Business (AACSB)
SOUMITRA DUTTA – INDEPENDENT DIRECTOR
Member of the Compensation and Nomination Committee
Member and Chairman of the Scientific Committee
Biography: Soumitra Dutta began his career in 1985 as a research
assistant at University of California, Berkeley, USA. Between
1988 and 1990, he gained further research experience at General
Electric. He then joined Insead, the international management
school based in Fontainebleau (France), where he served as lecturer
then Dean of Technology and E-learning. In 1999, he set up
eLab@Insead, the school’s research and analytics center focused
on big data analytics for businesses, which he headed until 2012.
In 2002, he was named Dean of Executive Education at Insead.
During his tenure at Insead, Soumitra Dutta also participated in
setting up and managing three strategy consultancies specialized
in new technologies and innovation, which he developed before
selling them. In 2012, he was appointed Dean of the Samuel Curtis
Johnson Graduate School of Management at Cornell University in
New York and in 2016 became the founding Dean of the Cornell
College of Business, comprising Cornell’s three accredited business
programs: the School of Hotel Administration, the Charles H.
Dyson School of Applied Economics and Management and the
Samuel Curtis Johnson Graduate School of Management.
Term expires: General Meeting called to approve the financial
statements for the year ended December 31, 2020
Date of first appointment: 5/23/2017
Number of Dassault Systèmes shares owned at December 31, 2020:
0*
Attendance rate at the 2020 Board meetings: 100%
Attendance rate at the 2020 Scientific Committee meetings:
100%
Attendance rate at the 2020 Compensation and Nomination
Committee meetings: 100%
*
The number of Dassault Systèmes shares owned by Soumitra Dutta as of the date of this Annual Report is 100.
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MARIE-HÉLÈNE HABERT-DASSAULT – DIRECTOR
Biography: Marie-Hélène Habert-Dassault has been Director of
Communication and Patronage of the Dassault Group since 1998.
She joined the Dassault Group in 1991 as Deputy Director of
Communication after having started her career at DDB Publicité
in London as a media planning consultant. She holds 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).
Term expires: General Meeting called to approve the financial
statements for the year ending December 31, 2023
Date of first appointment: 7/23/2014
Number of Dassault Systèmes shares owned at December 31, 2020:
566*
Attendance rate at the 2020 Board meetings: 100%
* Marie-Hélène Habert-Dassault is also a shareholder of GIMD.
Age: 55
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 offices and positions:
Within the Dassault Group: Member of the Supervisory Board
of GIMD; Vice-Chair of the Supervisory Board of Immobilière
Dassault SA (listed company); Member of the Supervisory Board
of Rond-Point Immobilier SAS; Member of the Board of Directors
of Dassault Aviation SA (listed company); Director and Chairman
of the Serge Dassault Foundation; Director of Artcurial SA
Outside the Dassault Group: Director of Biomérieux (listed
company); Member of the Strategy Committee and Vice-President
of HDF; General Manager of H Investissements; General Manager
of HDH; General Manager of HDH Immo; Director of Siparex
Associés; Manager of SCI Duquesne; Director of Fondation
Fondamental
Other positions held, and expired, during the past five years:
Chair of the Supervisory Board of GIMD; Chair of the Supervisory
Board of Rond-Point Immobilier SAS
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LAURENCE DAURES-LESCOURRET – INDEPENDENT DIRECTOR
Member of the Audit Committee
Member and Chair of the Compensation and Nomination Committee
Age: 47
Nationality: French
Biography: Laurence Daures-Lescourret has been an associate
professor in the Finance department of the ESSEC Business
School since 2010 and a researcher affiliated with the Centre de
Recherche en Économie et Statistique (CREST).
She holds a PhD in finance from HEC Paris (2003), a Master’s in
management from EDHEC, a Master “104 Finance” from Paris
Dauphine University, and a Master’s in political economy analysis
from the École d’Économie de Paris.
Between 2004 and 2011, she was first an assistant professor, co-
Director and ultimately Director of the ESSEC Finance department.
She also taught at ENSAE between 2000 and 2010.
As an academic researcher, she is the author of several publications
on organizing and regulating capital markets and has received
distinction for her work. She was the 2013 recipient of the Vega
Prize from the Federation of European Securities Exchanges and
received the 2015 award for best research Article on derivative
products granted by the IFSID (Montreal Institute of Structured
Finance and Derivatives).
Term expires: General Meeting called to approve the financial
statements for the year ending December 31, 2023
Date of first appointment: 5/26/2016
Number of Dassault Systèmes shares owned at December 31, 2020:
115*
Attendance rate at the 2020 Board meetings: 100%
Attendance rate at the 2020 Audit Committee meetings: 100%
Attendance rate at the 2020 Compensation and Nomination
Committee meetings: 100%
Professional address: ESSEC Business School – 3 Avenue Bernard
Hirsch – 95021, Cergy-Pontoise – France
Main position: Associate professor in the Finance department –
ESSEC Business School
Other offices and positions:
Independent Director of LCL – Le Crédit Lyonnais SA (listed
company)
Other positions held, and expired, during the past five years:
None
*
The number of Dassault Systèmes shares owned by Laurence Daures-Lescourret as of the date of this Annual Report is 301.
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TOSHIKO MORI – INDEPENDENT DIRECTOR AND LEAD DIRECTOR OF SUSTAINABLE DEVELOPMENT
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. She has been honored with numerous awards,
most recently the Louis Auchincloss Prize in 2020, the Tau Sigma
Delta National Honor Society Gold Medal in 2016, Architectural
Record’s Women in Design Leader Award in 2019, the OMI Arts
Leadership Award in 2019, and the AIA/ASCA Topaz Medallion
for Excellence in Architectural Education in 2019. Nikkei Business
listed Mori as one of 50 Japanese People Changing the World;
Newsweek Japan listed her as one of 100 Japanese People the
World Respects; and Forbes Japan featured her as one of 100 Self-
Made Women. Her project “Thread: Artists’ Residency and Cultural
Center” in Sinthian, Senegal was awarded the 2017 AIA Honor
Award for Architecture and was one of the winners of the inaugural
FIBRA Award for Contemporary Plant Fiber-based Architecture in
2019. Architectural Digest included Toshiko Mori Architect in their
annual AD100 list in 2014, 2016, 2017, 2018, 2019, 2020, and
2021. Mori is a member of the American Academy of Arts and
Sciences, and was inaugurated to both the National Academy of
Arts and Letters and the National Academy of Design in 2020.
Lastly, she is a partner of Paracoustica, a non-profit organization
which brings music to underserved communities.
In 2020, she published two new monographs, one with A+U
magazine for their February 2020 issue and another with
ArchiTangle Berlin titled Toshiko Mori Architect Observations. In
May 2020, her project “Fass School and Teachers’ Residence” in
Fass, Senegal, was listed by The Guardian as one of the world’s
top ten new architecture projects.
Term expires: General Meeting called to approve the financial
statements for the year ending December 31, 2022.
Date of first appointment: 5/26/2011
Number of Dassault Systèmes shares owned at December 31, 2020:
600
Attendance rate at the 2020 Board meetings: 100%
Attendance rate at the 2020 Scientific Committee meetings:
100%
Age: 69
Nationality: Japanese
Professional address: Toshiko Mori Architect, 199 Lafayette
Street, Suite 5A, New York, NY 10012 – USA
Main position: Founder of Toshiko Mori Architect PLLC
Other offices and positions:
Outside France: Member of the Advisory Committee of A+U
Magazine; Member of the G1 Summit (Japan); Advisor to the
Isamu Noguchi Museum; Director of James Carpenter Design
Associates Inc. (United-States)
Other positions held, and expired, during the past five years:
President of World Economic Forum Global Agenda Council on
Design; Member of World Economic Forum Global Future Council
on Future of Cities and Urbanism; Member of the World Economic
Forum Global Agenda Council on Design & Innovation; Member of
the Alvar Aalto Medal 2017 jury
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HERVE ANDORRE – DIRECTOR REPRESENTING EMPLOYEES
Biography: Hervé Andorre is a director representing employees,
appointed to this position by the “Ensemble à DS” union. He has
been Vice-President, Culture & Management of Dassault Systèmes
since 2015. Since 2003, he was Human Resources Development
Director for the Group. He was Head of Human Resources for
the R&D and CATIA organizations between 2003 and 2008. He
joined Dassault Systèmes in 1998 to create the Human Resources
Development function within the Company. Previously, he held
the positions of engineer and later of human resources manager
at IBM France.
Age: 55
Nationality: French
Professional address: Dassault Systèmes – 10, rue Marcel
Dassault, 78140 Vélizy-Villacoublay – France
Main position: Vice-President, Culture & Leadership, 3DS
University
Term expires: General Meeting called to approve the financial
statements for the year ending December 31, 2023
Other offices and positions:
None
Date of first appointment 5/26/2020
Other positions held, and expired, during the past five years:
Number of Dassault Systèmes shares owned at December 31,
2020: 7,372
None
Attendance rate at the 2020 Board meetings: 100%*
*
The percentage is calculated based on the Board meetings held on or after May 26, 2020.
TANNEGUY DE FROMONT DE BOUAILLE – DIRECTOR REPRESENTING EMPLOYEES
Biography: Tanneguy de Fromont de Bouaille is the director
representing employees appointed by the CFE-CGC. He has been
recruited by Dassault Systèmes in 1992 and currently serves as
Senior Director, Corporate Affairs after having been employed as
General Manager of Dassault Data Services (between 1992 and
2004), Europe Sales Administration Director for ENOVIA (between
2004 and 2012) and Consumer Goods and Retail Industry
Sales Director of Dassault Systèmes (between 2012 and 2019).
He previously held technical functions and then commercial
agency management functions with Cap Gemini France and Cap
Gemini America. Tanneguy de Fromont de Bouaille graduated from
École Centrale Lyon and Massachusetts Institute of Technology.
Age: 66
Nationality: French
Professional address: Dassault Systèmes – 10, rue Marcel
Dassault, 78140 Vélizy-Villacoublay – France
Main position: Senior Director, Corporate Affairs of Dassault
Systèmes
Term expires: General Meeting called to approve the financial
statements for the year ending December 31, 2023
Other offices and positions:
None
Date of first appointment: 06/24/2016
Other positions held, and expired, during the past five years:
Number of Dassault Systèmes shares owned at December 31, 2020:
13,307
None
Attendance rate at the 2020 Board meetings: 87.50%
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5.1.1.2 Practices of the Board of Directors
Separation of the offices of Chairman and Chief
Executive Officer
Dassault Systèmes separated the offices of Chairman of the
Board and Chief Executive Officer. 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 (Mr. Charles Edelstenne previously held
both roles as Chairman and Chief Executive Officer of Dassault
Systèmes SE).
Mr. Charles Edelstenne, Chairman of the Board, organizes
and supervises the work of the Board and reports thereon at
the General Shareholders’ Meeting. He oversees the smooth
running of the corporate bodies of Dassault Systèmes SE and
compliance with best governance practices, and ensures that
the directors are able to fulfill their duties.
Mr. Bernard Charlès, Vice-Chairman of the Board and Chief
Executive Officer, keeps him regularly informed of significant
matters concerning Dassault Systèmes and in particular its
strategy, organization and investment projects. Mr. Charles
Edelstenne also oversees maintaining quality relations with
shareholders in close coordination with measures taken in
this area by Mr. Bernard Charlès. To report on this mission,
an overview of the change in shareholding in the Company
and shareholder dialogue is presented and discussed each
year during the Board meetings. All of these tasks of the
Chairman of the Board are directed toward serving Dassault
Systèmes and his actions are taken into account in reviewing
and determining his compensation.
comprehensive powers
The Chief Executive Officer is vested by law with the
most
represent Dassault
Systèmes SE, subject to the limitations of powers indicated
in paragraph 5.1.1.4 “Powers of the Chief Executive Officer”
below. He represents Dassault Systèmes SE in its dealings
with third parties.
to
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 (established in
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 Committees”.
Main provisions of the Board’s internal regulation
The Board of Directors has established an internal regulation
amended on December 6, 2019 to formally consider social and
environmental issues in the definition and implementation of
Dassault Systèmes’ strategic directions. The Audit Committee
has its own charter.
200
The internal regulation stipulates the frequency of the Board
meetings 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 in
case of event which might have a material impact on Dassault
Systèmes’ prospects, outlook or on the implementation of
Dassault Systèmes’ strategy.
The internal regulation requires that, each year:
} the Board reviews the independence of the directors;
} the independent directors meet on one occasion without
the other directors to have a general discussion on the
functioning of the Board of Directors and debate specific
subjects; and
} the Board discusses its functioning. Every three years, the
Board conducts a formal review.
In terms of confidentiality obligations, the Board regulation
stipulates that the directors, or any persons attending
meetings of the Board or one of its Committees, must keep
confidential all information obtained in connection with the
fulfillment of their duties.
In terms of preventing and managing conflicts of interest,
all directors are required to notify the Board of any actual or
potential conflicts of interest with Dassault Systèmes and, in
such circumstances, to abstain from the discussion and from
the vote taken on such matters. Specifically, the involvement
of a director in a transaction in which Dassault Systèmes has
a direct interest, or which has come to their attention in their
capacity as director, must be notified to the Board prior to its
conclusion.
In addition, directors are not permitted to use their title or
position to obtain benefits of any kind, for themselves or third
parties.
In terms of the number of positions held in other companies,
each director is required to inform the Board of any other
position held in another French or foreign company, including
in their Committees. Moreover, the executive officers 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 significant number of Dassault Systèmes SE shares
in view of the directors’ compensation allocated in respect
to their directorships (except the directors representing the
employees). The Board of Directors plans to amend, in 2021,
its internal regulation to set a minimum number of shares to
be held by directors, expressed as a percentage of their annual
compensation as director.
Lastly, the regulation requires directors to comply with the
rules set up regarding the prevention of insider trading.
ANNUAL REPORT 2020 DASSAULT SYSTÈMES The Board of Directors’ activities in 2020
The Board of Directors met eight times in 2020, with an
attendance rate of 96.8%. It also took a decision by written
consultation.
In addition to the deliberations on its agenda pursuant to the
law (including notice of the General Meeting, the drafting of
this report and the annual management report), the Board also
discussed principally the following issues:
} the definition and review of strategic directions;
} the financial statements and the budget (approval of the
annual and consolidated financial statements of 2019, the
consolidated financial statements for the first half of 2020
and the provisional financial statements for 2020; review of
the quarterly results for 2020 and the financial objectives
for 2020 with regard to the economic impacts of the
COVID-19 health crisis); the Board was kept informed of the
financial position of Dassault Systèmes through the reports
of the Audit Committee and the presentations made at each
meeting by the Chief Operating Officer & Chief Financial
Officer;
} the review of the assessment of the internal control system;
} the compensation of corporate officers and allocation of
shares and share subscription options;
} the Board’s composition and practices (including verification
independent directors,
independent status of
of the
assessment of the Board);
} Dassault Systèmes SE’s compliance with corporate
governance rules and recommendations;
} the remote meeting arrangements for the General Meeting
held in 2020, in accordance with the applicable regulatory
provisions;
} the policy on equal employment and pay;
} the objective of gender diversity within the governing bodies
(see paragraph 5.1.2 “Executives of Dassault Systèmes”);
} business ethics and compliance, in particular through
the report on the implementation of the system for the
prevention and detection of corruption and influence
peddling, in accordance with the recommendation of the
French Anti-Corruption Agency. The Board of Directors also
received a report on the meetings of the Ethics Committee.
The new governance of the Company was presented to the
Board of Directors in early 2020: its ambition is to prepare
Dassault Systèmes for the future by supporting the new
generation of managers.
Non-executive directors’ session
Every year, the independent directors meet at a dedicated
session. In September 2020, this session was devoted to how
Dassault Systèmes adapted to the exceptional situation due
Corporate governance
The Board’s Corporate Governance Report
5
to the COVID-19 health crisis and, more specifically, to the
agility with which the Company conducted its business and
its critical role with regards to the various initiatives launched
by its clients and partners to fight against the pandemic.
Thus, Dassault Systèmes used
its virtual platform for
collaboration, innovation and experience, the 3DEXPERIENCE,
to monitor the health situation in real time in all the countries
in which the Company operates. The use of the platform also
enabled to manage the sites’ reopening at the end of the
lockdown period by taking into account three main aspects:
health and capacity (to protect its employees in constant
compliance with the rules on social distancing), human
(to mobilize them while taking into account their personal
organizational constraints) and technological (to visualize in
3D the work spaces and the arrangements to be made and to
provide each employee with a schedule taking into account all
of these constraints).
As part of the acceleration of its interactions with its clients and
users, the Company, via its 3DEXPERIENCE Lab, has opened
an “OPEN COVID19” community in March 2020, bringing
together multidisciplinary stakeholders (Dassault Systèmes
employees, researchers, engineers, designers, doctors...) who
can play an essential role in the fight against the COVID-19
pandemic, around innovative projects. Medical equipment,
such as respirators, protections and masks, were developed and
manufactured in numerous Fablabs to meet the needs of the
local healthcare infrastructures.
The independent directors were extremely satisfied with this
presentation, which they considered to be very focused on the
Company’s social and societal responsibility.
Directors’ training
All the directors are invited to attend a dedicated annual
information day on the 3DS Paris Campus and the
3DEXPERIENCE Forum event which Dassault Systèmes
organizes every year, in particular in France to receive feedback
from its clients and partners. In 2020, these events were
exceptionally postponed to 2021 due to successive lockdown
periods imposed by the COVID-19 pandemic in France.
In accordance with the AFEP-MEDEF Code, each director may
request, if he or she considers it necessary, additional training
in specific aspects of Dassault Systèmes, its business lines,
business sector and social and environmental challenges.
Any director representing employees benefits from training
specifically design to its directorship.
Finally, the members of the Audit Committee receive, upon
appointment, information on the specific accounting, financial
and operational aspects of Dassault Systèmes.
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The Board’s review of its practices and performance
The Board of Directors is constantly seeking to improve its
composition and practices. To this end:
} it solicits the independent directors’ comments on the
subject. The independent directors meet every year, in a
non-executive directors’ session, to discuss the Board’s
functioning;
} it holds a debate at least once a year on its functioning; and
5.1.1.3
Composition, Practices and Activities
of the Board Committees
Audit Committee
The Audit Committee consists solely of independent directors:
Mr. Xavier Cauchois, who chairs the Committee as well as
Ms. Odile Desforges and Ms. Laurence Lescourret. All have
financial or accounting expertise.
} it conducts a formal review every three years, in accordance
It is the task of the Audit Committee to oversee:
with its internal regulation and the AFEP-MEDEF Code.
During the formal review that took place in 2018, the directors
expressed their satisfaction with both the work and functioning
of the Board and each of its committees. They made a number
of proposals which have been taken into consideration, for
example, by modifying the schedule for the meeting of the
Board and its committees and by expanding the session of the
independent directors to enable them to discuss, in addition
to governance, strategic topics holistically. Moreover, scientific
or financial prospects of Dassault Systèmes’ strategy being
described at the Scientific Committee or the Audit Committee
it has been decided to allow those two
respectively,
committees to meet during a joint meeting, it being specified
that the members of those two committees represent all the
independent directors.
In 2020, as is the case every year, the independent directors
met and heard a presentation on the composition and
functioning of the Board, after which they held discussions
without Dassault Systèmes staff in attendance and reported
on the discussions to the Board.
They indicated that they had no recommendation to make
regarding the improvement of the Board practices and
that they were very satisfied with the way in which the
management considered the requests expressed in 2018
during the formal assessment, with the organization in 2019
of a joint meeting of the Audit and Scientific Committees to
discuss the details of the contemplated acquisition of Medidata
Solutions, Inc. The independent directors reiterated their wish
to see such a meeting organized once a year to review certain
strategic development projects of the Company in view of its
positioning for the next 10 years. They also suggested that,
in 2021, the annual information day which is attended by all
directors be devoted in particular to how the Company adapts
to the cultural and industrial diversity of its clients.
The Board of Directors declared that it was satisfied with the
effective contribution of each director to its work, notably
on the basis of their respective skills, the attendance and the
involvement in the debates of the Board and its committees.
The Compensation and Nomination Committee is in charge
of reviewing the effective contribution of the independent
directors to the Board’s work before reporting its conclusions
on to the Board of Directors.
202
} matters related to the preparation and the auditing of
accounting and financial information, in compliance with
the applicable regulations and its Charter;
} the preparation process for 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; and
} the relationship between Dassault Systèmes and
its
Statutory Auditors. In this regard, the Audit Committee
is involved in appointing and reappointing the Statutory
Auditors. It monitors the Statutory Auditors to ensure
they fulfill their mission and takes account of the findings
and conclusions of the Haut Conseil du Commissariat aux
Comptes after audits have been conducted.
On all
recommendations to the Board of Directors.
these matters,
this Committee
reports
its
The Audit Committee also provides the Board with regular
reports on its activities, the results of the process of
certification of the financial statements by the Statutory
Auditors, how this process contributed to the integrity of the
financial information and the role it played in this process. It
informs the Board of Directors immediately of any difficulties
it encounters.
It approves the annual plan for internal audits and gives its
opinion on the department’s organization. Lastly, it authorizes
the Statutory Auditors to provide services other than the
certification of the financial statements.
In the performance of its missions, the Audit Committee
is given presentations by Dassault Systèmes’ 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 Auditors 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 Auditors inform the Audit Committee of their main
findings and the Internal Audit Director reports to the Audit
Committee the conclusions of his/her work. In addition, the
Committee may call on external experts, having assessed their
expertise and independence.
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5
In 2020, the Audit Committee met nine times, including two
meeting at the head office, which were attended by the Chief
Operating Officer and Chief Financial Officer, Group Chief
Financial Officer, Group Controller, the financial reporting
Director, the Internal Audit Director, the General Counsel
and the Statutory Auditors, with which regular discussions
were held without the management of Dassault Systèmes
in attendance. The attendance rate for meetings of the Audit
Committee in 2020 was 95.83%.
} to propose the overall amount and the allocation of the
directors’ compensation in respect of their directorship;
} to propose to the Board of Directors 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;
} to assess the effective contribution of the independent
directors to the work of the Board;
During 2020, the Audit Committee had the opportunity to
discuss, or to give its opinion on, various topics brought to its
attention at its regular or special meetings including:
} to examine Dassault Systèmes’ policy for nominating and to
be informed of the compensation policy for the managers,
including non-executive officers;
} as part of the quarterly and annual closings, a review
of Dassault Systèmes’ performance, its targets and the
consolidated and parent company financial statements;
} to discuss the employee profit-sharing and incentive plan
comprised of grants of performance shares and share
subscription options; and
} approval of services not related to the audit;
} presentation on the significant changes in accounting
standards (IFRS or French) and their impacts, particularly
the review of the implementation of the IFRS 15 revenue
recognition policy;
} validation and follow-up of an internal audit plan for fiscal
year 2020;
} validation and follow-up of the 2020 internal audit and the
review of the internal control assessment system;
} drafting of the external audit plan and budget for 2020;
} review of the system for monitoring and controlling
customer credit risks, particularly in the context of the
economic crisis in connection with the COVID-19 pandemic;
} benchmark of financial services performance against a
panel of peers and review of the relevant progress plans;
} update on compliance issues (anti-corruption, data privacy
protection and export systems);
} monitoring of tax risks and of the evolution of the tax
environment;
} acquisition projects.
Compensation and Nomination Committee
The Compensation and Nomination Committee is composed
solely of independent directors: Ms. Laurence Lescourret, who
chairs the Committee, and Mr. Soumitra Dutta.
The main duties of this Committee are:
} to propose to the Board of Directors the amounts for
compensation and benefits of the executive officers,
including the formulas and the rules to apply for determining
variable compensation, and to verify the application of
these rules;
} 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. In this respect, Mr. Bernard Charlès
was appointed as Vice-Chairman of the Board of Directors
so that he can act as Chairman of the Board in the event of
absence or vacancy of the Chairman position. In addition,
the Committee meets regularly the members of Dassault
Systèmes Executive Committee as well as members of the
management teams and oversees the preparation of the
Chief Executive Officer’s succession through an annual
review with the Chief Executive Officer of the composition
of the Executive Committee and of the short- and mid-long-
term succession plan for its members.
When the Compensation and Nomination Committee carries
out its nomination work, it liaises with Mr. Charles Edelstenne,
Chairman of the Board and Mr. Bernard Charlès, Vice-Chairman
of the Board and Chief Executive Officer.
In relation to its duties, the Committee met six times in 2020,
with an attendance rate of 100%. During these meetings, it
carried out all of the missions described above; it also made
observations and recommendations to the Board on the
following subjects:
} the governance and composition of the Board of Directors
and its committees, in particular the co-option of a
new director and the appointment of a second director
representing employees, in accordance with the defined
selection procedure (prior interviews in particular);
} the independence of directors, which was reviewed in
relation to the responses of each director to a questionnaire,
and the assessment of their actual contribution to the
Board’s work;
} the amount and distribution of the attendance compensation
allocated to directors;
} the composition of the new Executive Committee in 2020,
the short- and medium-long term succession plan for its
members and their compensation;
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} the compensation of executive officers;
} the inclusion of sustainable development into Dassault
} the share plans and share subscription option plans for
Systèmes solutions;
Dassault Systèmes directors and employees;
} data intelligence in key areas such as health, cities and the
} the compensation policy for Dassault Systèmes executives
and employees in light of the health, social and economic
crisis resulting from the COVID-19 pandemic.
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 composed solely of independent directors: Ms. Toshiko
Mori and Mr. Soumitra Dutta, Chairman of the Committee.
The Committee reviews the main directions of research and
development, as well as Dassault Systèmes’ 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.
environment; and
} new business models linked to the rise in platform economy.
5.1.1.4
Powers of the Chief Executive Officer
Pursuant to French law, the Chief Executive Officer represents
Dassault Systèmes SE in dealings with third parties within the
limits set by its corporate purpose and by the powers reserved
by law to the shareholders or the Board of Directors.
However, under the Dassault Systèmes SE’s by-laws, certain
decisions of the Chief Executive Officer are submitted to the
prior approval of the Board. This concerns, in particular, the
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 18, 2021,
is €500 million. On March 18, 2021, the Board also authorized
the Chief Executive Officer to grant guarantees, endorsements
or securities in the name of Dassault Systèmes SE:
The Scientific Committee met twice in 2020, with an
attendance rate of 100%. At these meetings, the Scientific
Committee reviewed a number of topics central to Dassault
Systèmes strategy and in particular:
} without any limitation on the amount to guarantee any
commitments made with regard to tax and customs
administrations or made by companies controlled by
Dassault Systèmes SE;
} investments and research areas in science and technology
} up to an aggregate amount of €500 million in other cases.
for the digital twins of the environment and life;
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5.1.2 Executives of Dassault Systèmes
Since February 6, 2020, the Executive team has been separating Dassault Systèmes’ long-term strategy and operational
performance. It consists of the following people:
Bernard Charlès(1)
Dominique Florack
Vice-chairman of the Board of Directors, Chief Executive Officer
President
The Operational Executive Committee currently consists of eleven members, five of which are women:
Pascal Daloz(2)
Florence Hu-Aubigny
Philippe Laufer
Florence Verzelen(3)
Olivier Ribet
Samson Khaou
Erik Swedberg
Laurence Barthès
Thibault de Tersant(5)
Elisa Prisner
Victoire de Margerie
Chief Operating Officer & Chief Financial Officer
Executive Vice President, Research & Development
Executive Vice President, 3DS Global Brands
Executive Vice President, Industry, Marketing & Sustainability
Executive Vice President, EMEAR(4)
Executive Vice President, Asia-Pacific
Executive Vice President, Americas
Executive Vice President, Chief People & Information Officer
Senior Executive Vice President, General Secretary
Vice President Business Platform Transformation
Vice President Corporate Equity, Marketing & Communications
(1) Mr. Bernard Charlès is an executive officer within the meaning of the AFEP-MEDEF Code.
(2) Mr. Pascal Daloz is also a Director of Dassault Systèmes SE since July 22, 2020, the date on which he was appointed to the Board.
(3) Social, societal and environmental responsibility being the focus of Dassault Systèmes’ strategy and of its achievements, Florence Verzelen was appointed in 2019 responsible for
sustainable developmnet matters on the Operational Executive Committee.
(4) Europe Middle East Africa Russia.
(5) Mr. Thibault de Tersant was also a Director of Dassault Systèmes SE until July 22, 2020.
the proposal of
Gender equality objective within governing bodies
Upon
the executive management
(direction générale), the Board of Directors has set the objective
of maintaining a proportion of women of approximatively
40% within the Executive team.
This proportion is up sharply, from 22% in 2019 to 38.5% in
2020.
Dassault Systèmes has a strong ambition in terms of gender
equality and promotes the increased representation of women
in top positions of responsibility with specific actions taken
at the recruitment stage and a follow-up based on objectives
that are assessed annually (see paragraph 5.1.7.5 “Gender
Equality within the Executive Team and Top Positions of
Responsibility”).
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5.1.3 Compensation Policy for Corporate Officers
A compensation policy in line with the corporate
interest, strategy and sustainability of Dassault
Systèmes
Dassault Systèmes’ long-term strategy is based on its purpose,
which aims at contributing to sustainable development in
all its components: to provide business and people with 3D
experience universes (3DEXPERIENCE) to imagine sustainable
innovations, capable of harmonizing products, nature and life.
granted to directors, Chairmen of the Board of Directors or
Supervisory Boards and CEOs of companies on the CAC 40
index mainly, and of compensation granted to CEOs, who are
often also founders of international technology companies.
The benchmark used by the Committee is stable.
The members of the Committee, all of whom are independent
directors, discuss the subject of compensation in the absence
of the persons concerned, including the Chief Executive Officer.
The Dassault Systèmes compensation policy is defined to be
in the corporate interest to attract, motivate and retain highly
qualified profiles, for whom competition in the market is
intense, to promote the Company’s success and sustainability,
which depend on the achievement of its strategic, commercial
and financial objectives in the medium and long term.
Any change in the compensation of the Chief Executive
Officer and Chairman of the Board of Directors is based on
performance, changes in Dassault Systèmes’ scope and its
market shares. The development during the past three years
of macro-economic figures and data specific to Dassault
Systèmes SE (including the employment and compensation
conditions applicable to employees) is also reviewed.
Any significant change in their fixed compensation thus
takes place over a long period of time, in accordance with
the recommendations of the AFEP-MEDEF Code. In 2021,
it is proposed to increase the compensation of Mr. Charles
Edelstenne, Chairman of the Board of Directors, which was
unchanged since 2014, and the Chief Executive Officer’s
compensation, which was unchanged since 2018.
The compensation structure of the Chief Executive Officer is the
same as that of the Executive team of Dassault Systèmes. Their
compensation 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 Dassault Systèmes’ strategic orientations.
However, the Chief Executive Officer is not eligible for profit-
sharing payments, intended for all Dassault Systèmes SE
employees, unlike the other members of the Executive team
attached to France.
Shareholder approval
The compensation policy for the executive officers is set each
year in March by the Board of Directors on the recommendation
of the Compensation and Nomination Committee.
its missions with complete
The Committee exercises
independence based on a benchmark of compensations
In accordance with Article L. 22-10-34, II of the French
Commercial Code, the compensation elements due or granted
for 2020 to Mr. Charles Edelstenne, Chairman of the Board of
Directors, and Mr. Bernard Charlès, Vice-Chairman and CEO,
will be subject to a shareholders’ vote. The payment of the
variable or extraordinary compensation elements for 2020,
resulting from the implementation of the compensation policy
applicable to Mr. Charles Edelstenne and Mr. Bernard Charlès
and approved by the General Meeting held on May 26, 2020,
is thus subject to shareholder approval at the next General
Meeting (see paragraph 7.1 “Presentation of the Resolutions
Proposed by the Board of Directors to the General Meeting on
May 26, 2021”).
In 2020, such resolutions relating to compensation elements
due or granted for the 2019 fiscal year to Mr. Charles Edelstenne
(6th resolution) and to Mr. Bernard Charlès (7th resolution) were
approved by 98.85% and 83.23%, respectively.
Some of the information included in the corporate governance
report will also be submitted in a resolution to a vote of the
shareholders in accordance with Article L. 22-10-34, I of the
French Commercial Code (see paragraph 7.1 “Presentation
of the Resolutions Proposed by the Board of Directors to the
General Meeting on May 26, 2021”).
Furthermore, in accordance with Article L. 22-10-8 of the
French Commercial Code, the compensation policy for corporate
officers, as set forth in paragraph 5.1.3, will be subject to the
approval of the next General Meeting (see also paragraph 7.1
“Presentation of the Resolutions Proposed by the Board of
Directors to the General Meeting on May 26, 2021”). Pursuant
to Article L. 22-10-34, II of the French Commercial Code,
payment to Mr. Charles Edelstenne, Chairman of the Board of
Directors, and Mr. Bernard Charlès, Vice-Chairman and CEO,
variable or extraordinary compensation elements resulting
from the implementation, for 2021, of the compensation
policy will be subject to the approval of the shareholders at
the General Meeting that approves the financial statements
for fiscal year 2021.
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5.1.3.1
Compensation of the Chairman
of the Board
The annual compensation of the Chairman of the Board of
Directors is a fixed compensation only, in accordance with
the recommendation of the AFEP-MEDEF Code. He does
not receive any multi-year or other variable compensation,
any additional retirement plan, any indemnity under a
non-competition clause or any benefit in kind other than a
mandatory supplemental medical coverage.
All compensation paid by the Company to the Chairman of the
Board of Directors is paid by Dassault Systèmes SE, a company
incorporated under the laws of France and main operating
company of Dassault Systèmes.
At its meeting on March 18, 2021, the Board of Directors
decided to increase the annual fixed compensation of the
Chairman, which was unchanged since 2014, by 4% compared
to 2020, thus bringing this annual fixed compensation to
€1,020,000 euros. This increase will become effective on
the date on which the 2021 salary annual review for the
Company’s employees will become effective.
5.1.3.2
Compensation of the Chief
Executive Officer
The compensation of the Chief Executive Officer consists
of a fixed and a variable annual compensation as well as
benefits in kind corresponding to the use of a vehicle and a
mandatory supplemental medical coverage. In the event of
a forced departure, he may receive compensation subject to
the satisfaction of certain conditions, including a performance
condition.
Mr. Bernard Charlès is also granted performance shares as
part of the gradual process of associating the Chief Executive
Officer with the company’s capital with the aim of ultimately
recognizing his entrepreneurial role for over 35 years
with Dassault Systèmes 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.
He does not receive any multi-year variable compensation
or any additional retirement plan or indemnity under a non-
competition clause.
Mr. Bernard Charlès does not receive any compensation for his
role as Vice-Chairman of the Board of Directors.
All compensation paid by the Company to the Chief
Executive Officer is paid by Dassault Systèmes SE, a company
incorporated under the laws of France and main operating
company of Dassault Systèmes. Furthermore, only Dassault
Systèmes SE allocates performance shares to the Chief
Executive Officer, who is not granted any share subscription
or purchase options.
Fixed and variable annual compensation
The Chief Executive Officer receives a target annual
compensation for objectives achieved comprised of a fixed
portion for 50%, paid monthly, and a variable portion for
50%, paid (subject to the approval of the General Meeting of
Shareholders) annually in relation to the achievement of the
performance criteria previously set by the Board of Directors.
For 2021, these criteria, as set out below by the Board
of Directors, are in line with Dassault Systèmes’ strategic
orientations in the short, medium and long term. Therefore,
they contribute to the objectives of the compensation policy
of Dassault Systèmes to promote the Company’s success and
sustainability.
Dassault Systèmes’ long-term strategy is indeed based on its
purpose, which aims at contributing to sustainable development
in all its components: to provide business and people with 3D
experience universes (3DEXPERIENCE) to imagine sustainable
innovations, capable of harmonizing products, nature and life.
This purpose, published in February 2012 and driven by the
Chief Executive Officer himself, determines not only the choice
of acquisitions and product developments, each Dassault
Systèmes brand carrying a promise of sustainable innovation,
but also the culture and the values of the Company and each
of its organizations. In other words, social and environmental
responsibility is at the core of the Dassault Systèmes’ strategy
and its achievements, as acknowledged by the various
sustainable development indexes and international rankings.
Accordingly, each category of performance criteria derives
from and is inextricably linked to the Dassault Systèmes
purpose.
The purely qualitative portion of these criteria is limited to
20%. In order to protect Dassault Systèmes’ competitive
position, the Board of Directors considered that it was not
appropriate to disclose further details regarding these criteria.
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Performance criteria triggering the payment of variable compensation to the Chief Executive
Officer
Type
Weighting
Dassault Systèmes ESG Indicator*
Diluted net earnings per share on a non-IFRS consolidated basis (hereinafter referred to as
the “EPS”) in line with the objectives communicated by Dassault Systèmes for the year
Company efficiency processes, measured by the fact that the non-IFRS operating margin is
in line with the objectives announced by Dassault Systèmes for the year
Competitive position, measured by the evolution of the increase in the revenue compared
to the competitors and the increase of the weight of the diversification industries in the
global software revenue
Composition of product portfolio
Implementation of the Dassault Systèmes’ short-, medium- and long-term strategy
contributing to future growth
Quantifiable
Quantifiable
Quantifiable
Quantifiable
Quantifiable
Qualitative
15%
20%
15%
15%
15%
20%
Cap
140%
140%
140%
140%
140%
140%
*
The indicator is based on the following environmental, social and governance criteria: employees pride and satisfaction as measured by an internal annual survey, the proportion
of women on the Board of Directors and on the Operational Executive Committee, the proportion of the revenue from new licenses having a positive impact on the environment
(handprint) and the CO2 parameter (footprint).
To determine whether the above criteria are met, the
Compensation and Selection Committee verifies in March of
Year N+1 to what extent the targets set in March of Year N
have been met. 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 above the target up to 140% overall and per criterion.
No minimum payment is guaranteed and, in the event of an
outperformance, the allocated amount is capped.
There is no provision for reclaiming the variable portion of the
Chief Executive Officer’s compensation.
At its meeting on March 18, 2021, the Board of Directors
has decided to increase the annual target compensation with
targets achieved of the Chief Executive Officer, which was
unchanged since 2018, by 4 % compared to 2020, bringing it
to €2,890,000. This annual target compensation with targets
achieved is composed of a fixed amount of €1,445,000 and a
variable portion of no more than 140% of the fixed portion,
the amount of which will depend upon the achievement
of the targets and will be subject to the approval of the
General Shareholders’ Meeting called to approve the 2021
financial statements. The increase of the fixed portion of this
compensation will become effective on the date on which
the 2021 salary annual review for the Company’s employees
will become effective. This increase of the annual target
compensation with targets achieved is at a level equivalent
to half of the increase of Dassault Systèmes SE employees'
salaries for the same period. It takes into account notably
Dassault Systèmes’ new ambition unveiled in 2020 – creating
the virtual twin experience of the human body – and the
expansion of its market, in particular following the acquisition
of Medidata Solutions, Inc, which results in a doubling of the
potential market.
Performance shares
It is recalled that prior to the IPO of Dassault Systèmes in
1996, Mr. Bernard Charlès had not benefited from an equity
stake in the Company.
In this context and since 2005, the Board of Directors,
with the authorization of the General Meeting and on the
recommendation of the Compensation and Nomination
Committee, grants performance shares to the Chief Executive
Officer each year as part of the gradual process of associating
him with the company’s capital with the aim of ultimately
recognizing his entrepreneurial role for over 35 years
with Dassault Systèmes 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. The number of shares granted in
this regard is 300,000 per year.(1)
The acquisition of these shares is subject to continued
employment and performance conditions set by the Board
that are identical to the ones stipulated for the acquisition of
shares awarded to Dassault Systèmes’ employees (excluding
MEDIDATA).
Therefore, at its meeting on March 18, 2021, the Board of
Directors decided that 300,000(2) performance shares will
be allocated in 2021 to the Chief Executive Officer, per the
authorization granted by the General Shareholders’ Meeting.
Although this allocation of 300,000 shares does not aim at
providing a compensation to the Chief Executive Officer but
aims at gradually associating him with Dassault Systèmes’
capital, it is still subject, as for all the Dassault Systèmes’
employees who benefit from performance shares allocations,
to rigorous financial performance criteria based on the
intrinsic performance of Dassault Systèmes. In this respect, no
(1) In 2018, the Board of Directors granted performance shares to certain Dassault Systèmes’ employees and the Chief Executive Officer in May and in
September. The grant made in September was an anticipated grant for 2019 so that it could be subject to the legal framework for the authorization of
the General Meeting of September 4, 2015, which expired on November 4, 2018. Consequently, no performance shares were allocated in 2019 to the
Chief Executive Officer.
(2) Subject to potential adjustment to take into account the division of the par value of Dassault Systèmes’ shares.
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minimum amount is guaranteed. It therefore contributes to the
objectives of the compensation policy of Dassault Systèmes to
promote the Company’s success and sustainability.
This performance criteria, assessed over an average period
of three years, will be expressed as a non-IFRS EPS’ growth
rate (neutralized from currency effects) set by the Board in
coherence with the growth rate included in the multi-year
objectives published by Dassault Systèmes and described
in the paragraph “Financial objectives” of this Universal
registration document. No performance share will be acquired
by the Chief Executive Officer below a certain achievement
level set by the Board - generally 80 % - of the performance
condition. These shares will be divided into two tranches:
} the first tranche, corresponding to 50% of the shares
allocated (150,000 shares), will be acquired at the end
of a 2 years vesting period, subject to the satisfaction of
the continued employment condition and of a condition
relating to the non-IFRS EPS’ growth (neutralized from
currency effects) achieved in 2022 compared to non-IFRS
EPS achieved in 2020;
} the second tranche, corresponding to 50% of the shares
allocated (150,000 shares), will be acquired at the end
of a 4 years vesting period, subject to the satisfaction of
the continued employment condition and of a condition
relating to the non-IFRS EPS’ growth (neutralized from
currency effects) achieved in 2024 compared to non-IFRS
EPS achieved in 2020.
If the continued employment condition is not met at the time
of the vesting of the shares, except in the case of retirement or
of disability, no shares will be acquired by the Chief Executive
Officer.
There is no mandatory holding period after the vesting of
these shares.
However, in accordance with the AFEP-MEDEF Code and the
AMF recommendations, since 2007, the Board of Directors
has, with each award, set the percentage of shares thus
acquired that the Chief Executive Officer will be required to
keep in registered form for as long as he holds office.
Accordingly, on March 18, 2021, the Board of Directors
decided that percentage would be equal, as it has been
every year since 2007, to 15% of the shares acquired. This
percentage is calculated after deduction of the number of
shares which would be necessary to sell to pay taxes due,
social charges and expenses related to the sale of the total
number of shares vested.
The Chief Executive Officer cannot enter
into forward
transactions that allow him to guarantee a capital gain in the
event of the sale of his performance shares, he has formally
agreed to this prohibition which is also stated in the Dassault
Systèmes Insider Trading Rules.
Benefits in kind
The Chief Executive Officer receives benefits
in kind
corresponding to the use of the vehicle made available to
him by Dassault Systèmes SE and a mandatory supplemental
medical coverage.
Indemnity due in the event of imposed departure
The Chief Executive Officer may receive compensation for
the termination of his functions whose principle and amount
are subject to certain conditions, in particular performance
conditions, in accordance with the French Commercial Code
and the AFEP-MEDEF Code. Thus the indemnity would be due
in case of a change in control or strategy duly acknowledged
by the Board of Directors, which results in an imposed
departure in the subsequent 12 months. The indemnity may
also be paid, in compliance with the AFEP-MEDEF Code, if the
imposed departure is not linked to poor results of Dassault
Systèmes or to mismanagement by the Chief Executive
Officer, the Board of Directors being entitled to decide to pay
all or part of the indemnity.
However, the indemnity would not be due in the event the
Chief Executive Officer were to leave Dassault Systèmes on his
own initiative to take a new position elsewhere, or were to be
assigned a new position within the Company, or if he were to
receive retirement benefits shortly after leaving. Furthermore,
in the event of exceptional circumstances seriously damaging
the image or results of Dassault Systèmes and significantly
reducing, in the opinion of the Board, the market price of
Dassault Systèmes’ 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 term of office, the Board may decide that
the indemnity payment is not due.
The amount of the indemnity due to Mr. Bernard Charlès,
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, using the following formula:
} the aggregate gross compensation (including variable
compensation but excluding compensation in kind and
directors’ compensation) due in connection with his position
for the two years ended prior to the date of departure;
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} multiplied by the quotient of (i) the amount of variable
compensation actually paid during the three fiscal 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 for
each of these years by the Board of Directors on the basis
of achievement of the objectives set for Dassault Systèmes
(denominator).
The indemnity is thus subject to performance conditions
related to achieving targets fixed for the variable compensation.
The Chief Executive Officer does not receive any multi-
year variable compensation, additional pension plan or
compensation relating to a non-compete clause.
5.1.3.3 Directors Compensation
The directors of Dassault Systèmes SE, including Mr. Charles
Edelstenne in his capacity as Chairman of the Board of
Directors, and Mr. Bernard Charlès, in his capacity as a director,
receive compensation for their activity (formerly known as
“directors’ fees”).
The General Meeting of May 26, 2020 set the maximum
annual amount of compensation granted to directors at
€800,000(1) for the current and future fiscal years, until a
further decision by the General Meeting on this issue.
With regard to the allocation criteria, Dassault Systèmes desires
to attract, motivate and retain highly qualified profiles and the
Board of Directors has decided, as part of the compensation
policy submitted to the General Shareholders’ Meeting of
May 26, 2020, to amend said criteria (see paragraph 7.1.8 of
the 2019 Annual Report)(2).
Subject to the approval by the General Meeting of May 26, 2021 of
the compensation policy for corporate officers for 2021, the
Board of Directors, at its meeting of March 18, 2021 decided
that the annual budget would be distributed among the
directors, as for 2020, according to the following principles:
€20,000 per director, an additional €20,000 for the Chairman
of the Board, an additional €20,000 for the Chairman of the
Audit Committee, and an additional €10,000 for the Chairman
of the Compensation and Nomination Committee and the
Chairman of the Scientific Committee (these amounts being
paid in proportion to the actual term in office during the
year); €4,500 per member for physical presence at Board or
Committee meeting; and €2,250 per member for each Board
or Committee conference call or videoconference.
In the event of the presence of the members of the Board
of Directors at all the scheduled meetings of the Board of
Directors, the variable part is thus structurally higher than the
fixed part.
5.1.3.4
Terms of office, Employment
Contracts or Service Agreements with
the Company
The term of office of the corporate officers of Dassault
Systèmes SE is four years. They are revocable under the
conditions provided by law.
The employment contracts of Messrs. Thibault de Tersant(3),
Pascal Daloz(4), Tanneguy de Fromont de Bouaille and Hervé
Andorre have an indefinite term. They are subject to legal
conditions, in particular with regard to notice and termination.
No contract for the provision of services has been concluded
by the Company with one of its corporate officers.
(1) This increase follows the observation that the directors’ compensation was below the average compensation offered in companies in the SBF 120 and
the entry, in September 2018, of Dassault Systèmes SE into the CAC 40. It also takes into account the consequences of the acquisition of Medidata
Solutions, Inc. in terms of complexity and increased exposure on the market. In addition, the utilization rate of the annual amount to be allocated to
directors, close to 100%, left no flexibility to organize additional meetings of the Board and its Committees nor did it allow the compensation of a second
director representing employees.
(2) The distribution of the compensation allocated to the directors for 2019 was based on the following principles, set by the Board of Directors on May 26,
2019: €16,500 per director, an additional €16,500 for the Chairman of the Board of Directors and an additional €4,400 per for the Chairman of the
Audit Committee (these sums being paid in proportion to the actual term in office during the year); €2,200 per director for their physical presence at
a Board meeting; € 4,400 per member of the Audit Committee for their physical presence at a meeting of this Committee; €2,200 per member of the
Compensation and Nomination Committee or the Scientific Committee for their physical presence at a meeting of these committees; and €1,100 for
each attendance by conference call or videoconference in a meeting of the Board of Directors or one of the committees.
(3) Mr. Thibault de Tersant was a member of the Board of Directors of Dassault Systèmes SE until July 22, 2020.
(4)
Mr. Pascal Daloz has been a member of the Board of Directors of Dassault Systèmes SE since July 22, 2020.
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5.1.4 Summary of the Compensation and Benefits due to Corporate
Officers (mandataires sociaux)
The elements included as compensation are the compensation
and benefits paid in respect of fiscal year N and comprising
the fixed part, the variable part paid during fiscal year N,
the extraordinary compensation paid during fiscal year N,
the compensation allocated to directors in respect of their
directorship as soon as these elements were received by
the executive officer, paid during fiscal year N, performance
shares, paid during fiscal year N, and valued at their IFRS value
and employee saving (profit-sharing) and benefits in kind.
This compensation is calculated on a full time equivalent basis
of Dassault Systèmes SE employees present in 2019 and
2020, excluding the apprentices.
Ratios between the compensation paid
to executive corporate officers of Dassault
Systèmes SE and that paid to employees who
are not corporate officers
Dassault Systèmes SE publishes here after the ratios required
by Article L. 22-10-9 of the French Commercial Code resulting
from the Order of November 27, 2019 relating to the
compensation of corporate officers of listed companies.
The equity ratio tables below take into account a correction
for material error on pages 198 and 199 of the 2019 Annual
Report for average and median compensation “on a full-time
equivalent basis of Dassault Systèmes SE employees other
than executive corporate officers” for the years 2015 to 2019.
Dassault Systèmes SE is the Company’s main operating
company, with its workforce representing 84.9% of the
workforce in France as of December 31, 2020. Dassault
Systèmes SE’s equity ratios being representative, the
definition of a larger scope for the purpose of presenting those
ratios is not relevant
CHARLES EDELSTENNE, CHAIRMAN OF THE BOARD
Ratio compared to the average compensation paid to
employees of Dassault Systèmes SE
Ratio compared to the median compensation paid to
employees of Dassault Systèmes SE
Annual trends over the past 5 years
2020
9.6
12.8
2019
9.3
12.8
2018
9.8
13.3
BERNARD CHARLÈS, VICE-CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
Ratio compared to the average compensation paid to
employees of Dassault Systèmes SE
Ratio compared to the median compensation paid to
employees of Dassault Systèmes SE
Annual trends over the past 5 years
2020
27.9
37.2
2019
26.6
36.6
2018
27.4
37.0
2017
10.2
13.5
2017
27.3
35.9
2016
10.1
13.5
2016
28.6
38.1
The compensation of the Vice-Chairman of the Board of
Directors and Chief Executive Officer, Mr. Bernard Charlès,
taken into account to calculate the equity ratio presented
above, does not include the portion represented by the shares
allocated to Mr. Bernard Charlès as part of the gradual process
of associating him with the company’s capital that began
several years ago, with the aim of ultimately recognizing his
entrepreneurial role for over 35 years with Dassault Systèmes
and providing him with an equity interest comparable to that
of founders of companies in the same sector, or more generally,
of his peers in technology companies around the world.
It is recalled that prior to the IPO of Dassault Systèmes in
1996, Mr. Bernard Charlès had not benefited from an equity
stake in the Company.
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However, the valuation of the shares allocated to Mr. Bernard Charlès within the framework of the progressive association with
the capital of Dassault Systèmes SE would bring the equity ratio to the following values:
Reflecting the gradual process of association to the capital of
Dassault Systèmes SE
Ratio compared to the average compensation paid to
employees of Dassault Systèmes SE
Ratio compared to the median compensation paid to
employees of Dassault Systèmes SE
Annual trends over the past 5 years
2020
2019
2018
2017
2016
191.3
223.0
218.7
156.7
122.7
254.6
306.5
295.3
206.3
163.8
Furthermore, Mr. Charles Edelstenne, Chairman of the Board of Directors and Mr. Bernard Charlès, Vice-Chairman of the Board
of Directors and Chief Executive Officer do not receive any additional retirement plan or any indemnity under a non-competition
clause.
ANNUAL TRENDS IN THE COMPENSATION OF EXECUTIVE CORPORATE OFFICERS, IN THE COMPANY’S
PERFORMANCE, AND IN THE AVERAGE COMPENSATION PAID TO COMPANY EMPLOYEES OVER THE PAST 5 YEARS
Annual trends over the past 5 years
(in euros)
2020
2019
2018
2017
2016
Compensation paid to the Chairman of the Board
1,031,645
1,027,243
1,027,100
1,027,100
1,025,000
Compensation paid to the Vice-Chairman of the Board
and Chief Executive Officer
Share price on December 31 of the reporting year
Net earnings per share
Average compensation paid to employees other than
executive officers, on a full-time equivalent basis
2,997,377
2,942,933
2,855,716
2,742,434
2,886,876
166.15
3.77
146.55
3.65
103.70
3.11
88.59
2.68
72.39
2.49
107,267
110,644
104,300
100,465
101,074
The above compensation of Vice-Chairman of the Board of Directors and Chief Executive Officer does not include the shares allocated to Mr. Bernard
Charlès as part of the gradual process of associating him with the company’s capital. The evolution of the valuation of these shares is:
Value of the shares allocated to the Vice-Chairman of the
Board of Directors and Chief Executive Officer as part of
the gradual process of associating him with the
company’s capital(1)
17,526,600(2)
21,734,506(3)
19,950,608(4)
13,004,841
9,519,744
(1) Value based on the method chosen for the consolidated financial statements before the spreading of the expense and after taking into account the performance criteria.
(2) 300,000 2020-B shares granted in 2020.
(3) 300,000 2019-B shares granted in advance in 2018.
(4) 300,000 2018-B shares granted in 2018.
The tables below provide a summary, in accordance with
the recommendations of the AMF and the AFEP-MEDEF
Code, of the compensation and benefits of all kind paid to
the corporate officers of Dassault Systèmes SE, pursuant to
Article L. 22-10-9 of the French Commercial Code (see also
paragraphs 5.1.3 “Compensation Policy for Corporate Officers”
and 5.1.5 “Interests of Executive Management and Employees
in the Share Capital of Dassault Systèmes SE”).
The total compensation of the corporate officers paid
and awarded during fiscal year 2020 complies with the
compensation policy adopted in 2019 and the compensation
policy adopted in 2020. This compensation contributes to the
long-term performance of the Company. With respect to the
Chief Executive Officer, the variable portion of his compensation
is conditional on achieving demanding performance criteria
and is in line with Dassault Systèmes’ strategic orientations in
the short, medium and long term.
For fiscal year 2020, the amount of compensation allocated
to the directors of Dassault Systèmes SE in respect of their
directorship amounts to €620,959, of which €292,459 are
allocated on the basis of their position (fixed portion) and
€328,500 on the basis of their attendance at meetings of
the Board of Directors and its committees (variable portion).
In accordance with the AFEP-MEDEF Code, the variable
portion of the compensation allocated to the directors is thus
preponderant.
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TABLE 1: SUMMARY OF COMPENSATION AND OPTIONS AND SHARES GRANTED TO EACH EXECUTIVE OFFICER
(in euros)
Charles Edelstenne, Chairman of the Board
Compensation due for the year (detailed in Table 2)*
Value of the multi-year variable compensation paid during the year
Value of the stock options granted during the year (detailed in Table 4)
Value of the performance shares granted during the year (detailed in Table 6)
Value of the other long-term compensation plans
Bernard Charlès, Vice-Chairman of the Board and Chief Executive Officer
Compensation due for the year (detailed in Table 2)*
Value of the multi-year variable compensation paid during the year
Value of the stock options granted during the year (detailed in Table 4)
Value of the performance shares granted during the year (detailed in Table 6)
Value of the other long-term compensation plans
2020
2019
1,042,395
1,031,643
None
None
None
None
None
None
None
None
3,047,827
2,997,373
None
None
None
None
None
None
See table
below
See table
below
* All compensation paid by the Company to Mr. Charles Edelstenne and Mr. Bernard Charlès is paid by Dassault Systèmes SE, a company incorporated under the laws of France.
VALUE OF THE SHARES GRANTED TO BERNARD CHARLÈS, VICE-CHAIRMAN AND CHIEF EXECUTIVE OFFICER, AS PART
OF THE GRADUAL PROCESS OF ASSOCIATING HIM WITH THE COMPANY’S CAPITAL
These shares are granted to Mr. Bernard Charlès, Vice-Chairman of the Board and Chief Executive Officer as part of the gradual
process of associating him with the Company’s capital that began several years ago, with the aim of ultimately recognizing his
entrepreneurial role for over 35 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 euros)
Bernard Charlès, Vice-Chairman of the Board and Chief Executive Officer
2020
2019
(granted in advance on
September 25, 2018)(3)
Value of the shares granted(1)
17,526,600(2)
21,734,506(4)
(1) Value based on the method chosen for the consolidated financial statements before the spreading of the expense and after taking into account the performance criteria.
(2) 300,000 2020-B shares granted in 2020.
(3) In 2019, no performance shares have been granted to Mr. Bernard Charlès. Yet, as mentioned in paragraph 5.1.3.2 of the 2017 Annual Report and during the General Meeting of
Shareholders of May 22, 2018, on September 25, 2018, the Board decided to allocate performance shares (plan 2019) to several managers and employees of Dassault Systèmes
(including Mr. Bernard Charlès) in order to benefit from the legal regime of the authorization of the General Meeting of September 4, 2015 which was to expire on November 4,
2018. The Board thus proceeded by anticipation to the allocation considered for 2019 (performance shares are generally granted in May at the end of the General Meeting of
Shareholders).
(4) 300,000 2019-B shares granted in advance in 2018.
These 300,000 shares allocated to Mr. Bernard Charlès on
May 26, 2020 (2020-B shares) represent approximately
5.67% of the global allocation decided by the General Meeting
of May 22, 2018(1).
These shares will vest on May 26, 2024, subject, in accordance
with the AFEP-MEDEF Code, to the satisfaction of a presence
condition and a performance condition. These conditions are
identical to those provided for under the 2020-A share plan
for certain Company employees. The performance condition
is based on the Company’s intrinsic performance measured by
the growth in EPS (neutralized from currency effects) achieved
in 2023 compared to the EPS in 2019, the Board having set
two limits: if non-IFRS EPS is at least equal to the upper limit,
all of the shares will be vested by the Chief Executive Officer.
If it is below the lower limit, no shares will be vested by the
Chief Executive Officer. Between these two thresholds, the
number of shares granted will vary linearly. No shares may
be vested by the Chief Executive Officer if the condition of
presence is not met, except in case of retirement or disability.
(1) The General Meeting of May 22, 2018 set the maximum number of shares that may be granted to executive officers to 35% of the decided global
allocation amount, assessed on the date of the allocation, i.e. 1,850,998 shares on May 26, 2020.
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TABLE 2: SUMMARY OF THE COMPENSATION OF EACH EXECUTIVE OFFICER
The gross compensation before tax of the executive officers (dirigeants mandataires sociaux) is set forth in the table below. All
compensation paid by the Company to the executive officers is paid by Dassault Systèmes SE, a company incorporated under the
laws of France, and main operating company of Dassault Systèmes.
The executive officers do not receive any compensation from Dassault Systèmes SE other than the fees shown in the table below.
(in euros)
Charles Edelstenne, Chairman of the Board
Fixed compensation(1)
Annual variable compensation
Multi-year variable compensation
Extraordinary compensation
Compensation allocated to directors in respect of the directorship(2)
Benefits in kind(3)
TOTAL
Bernard Charlès, Vice-Chairman of the Board and Chief Executive
Officer(4)
Fixed compensation
Annual variable compensation(5)
Multi-year variable compensation
Extraordinary compensation
Compensation allocated to directors in respect of the directorship
Benefits in kind(9)
TOTAL
2020
2019
Amounts due
for the year
Amounts paid in
2020
Amounts due for
the year
Amounts paid in
2019
982,000
982,000
982,000
982,000
None
None
None
60,250
145
None
None
None
49,500
145
None
None
None
49,500
143
None
None
None
45,100
143
1,042,395
1,031,645
1,031,643
1,027,243
1,390,000
1,390,000
1,390,000
1,390,000
1,600,000(6)
1,556,800(7)
1,556,800(7)
1,506,760(8)
None
None
40,250
17,577
None
None
33,000
17,577
None
None
33,000
17,573
None
None
28,600
17,573
3,047,827
2,997,377
2,997,373
2,942,933
(1) GIMD paid Mr. Charles Edelstenne in 2020 and 2019 a gross compensation of €905,400 and €900,000 respectively as Chairman of GIMD.
(2) GIMD paid Mr. Charles Edelstenne €13,364 in 2019 as a member of GIMD’s Supervisory Board until May 28, 2018.
(3) These benefits in kind are linked to mandatory supplemental medical coverage. Furthermore, GIMD granted in 2020 and 2019 benefits in kind relating to the use of a car for
Mr. Charles Edelstenne, valued at €10,326 and €10,351 respectively.
(4) With the exception of the compensation paid in respect of his directorship, Dassault Systèmes SE has paid Mr. Bernard Charlès each of the compensation elements referred to in
the table above in respect of his office as Chief Executive Officer of Dassault Systèmes. In 2020, Mr. Bernard Charlès did not receive any compensation in consideration of his office
as Vice-Chairman of the Board.
(5) The rules governing the determination of variable compensation of the Chief Executive Officer are described below.
(6) Variable portion due for 2020 and paid in 2021.
(7) Variable portion due for 2019 and paid in 2020.
(8) Variable portion due for 2018 and paid in 2019.
(9) These benefits in kind are linked to mandatory supplemental medical coverage, and use of a vehicle made available to Mr. Bernard Charlès by Dassault Systèmes SE.
Conditions for determining the variable portion of the
Chief Executive Officer’s compensation due in respect
of fiscal year 2020
At its meeting on March 18, 2021, upon the recommendation
of the Compensation and Nomination Committee and
further to the review of the achievement of the performance
criteria set in 2020, the Board set the variable portion of
the Chief Executive Officer’s compensation paid in 2021 in
respect of 2020, subject to the General Meeting approval,
at €1,600,000, equivalent to 115.1% of the annual target
variable compensation. This amount represents 115.1% of
his fixed compensation. The Chief Executive Officer’s variable
compensation for the 2020 fiscal year thus represents 52.5%,
and his fixed compensation for the same fiscal year 45.6%,
of his total compensation (for further details on the total
compensation, see paragraph 5.1.4 Table 2 « Summary of the
compensation of each executive officer »).
The performance criteria categories are set forth in the
following table with an indication, for each of them, of their
respective weight and the level of payment resulting from the
level of satisfaction. The level of achievement of the objectives
can result in a payment below the target, or above the target
up to 140%.
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5
Performance criteria categories
Dassault Systèmes ESG Indicator*
Diluted net earnings per share on a non-IFRS consolidated basis (hereinafter referred to as
the “EPS”) in line with the objectives communicated by Dassault Systèmes for the year
Company efficiency processes, measured by the fact that the non-IFRS operating margin is
in line with the objectives announced by Dassault Systèmes for the year
Competitive position, measured by the evolution of the increase in the revenue compared
to the competitors and the increase of the weight of the diversification industries in the
global software revenue
Composition of product portfolio
Implementation of Dassault Systèmes’ short-, medium- and long-term strategy
contributing to future growth
Type
Weighting
Quantifiable
Quantifiable
Quantifiable
Quantifiable
Quantifiable
Qualitative
15%
20%
15%
15%
15%
20%
Level of
achievement
140%
106.6%
114%
110%
108%
115%
*
The indicator is based on 5 environmental, social and governance criteria: employees pride and satisfaction as measured by an internal annual survey, the proportion of women on
the Board of Directors and on the Executive team, the proportion of employees who have followed the “business ethics” training, the proportion of the revenue from new licenses
having a positive impact on the environment (handprint) and the CO2 parameter (footprint).
Additional social commitment to preserve jobs in the
context of the COVID-19 crisis
In addition to the inclusion of an ESG criterion to determine the
variable portion of the Chief Executive Officer’s compensation,
Dassault Systèmes has made, as soon as the COVID-19 crisis
arises, an additional commitment to guarantee a stable
headcount in 2020. Moreover, Dassault Systèmes has not
taken any short-time work measures or sought any assistance
from the State (State guarantee-supported loans, deferral of
expenditures, etc.). Lastly, the Company has taken financial
measures in favor of small and medium-sized companies, for
both its partners and suppliers.
The Compensation and Nomination Committee assessed
these commitments and measures and considered that
the sustainable development and the social and societal
responsibility of a company did not make sense without a
strong commitment in terms of employment and solidarity for
the local ecosystem.
TABLE 3: COMPENSATION RECEIVED
BY NON- EXECUTIVE DIRECTORS
The non-executive directors do not receive any compensation
from the Company other than that indicated in the table
below, except for Messrs. Thibault de Tersant(1), Pascal Daloz(2),
Tanneguy de Fromont de Bouaille and Hervé Andorre(3) who
also receive compensation in respect of their employment
contract.
All compensation paid by the Company to the non-executive
directors is paid by Dassault Systèmes SE, a company
incorporated under the laws of France, and main operating
company of Dassault Systèmes.
The compensations presented in the table below are gross
compensations.
(1) Mr. Thibault de Tersant was a member of the Board of Directors of Dassault Systèmes SE until July 22, 2020. He is also General Secretary of Dassault
Systèmes.
(2) Mr. Pascal Daloz has been a member of the Board of Directors of Dassault Systèmes SE since July 22, 2020. He is also Chief Operating Officer and Chief
Financial Officer.
(3) Messrs. Tanneguy de Fromont de Bouaille and Hervé Andorre are directors representing employees.
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(in euros)
Hervé Andorre*(1)
(Director representing employees since May 26, 2020)
Xavier Cauchois
(Director since May 22, 2018)
Jean-Pierre Chahid-Nouraï
(Director until May 23, 2019)
Pascal Daloz**
(Director since July 22, 2020)
Catherine Dassault
Arnoud De Meyer
(Director until May 23, 2019)
Odile Desforges
Soumitra Dutta
Tanneguy de Fromont de Bouaille***(2)
(director representing employees)
Marie-Hélène Habert-Dassault(3)
Laurence Lescourret
Toshiko Mori
Thibault de Tersant****
(Director until July 22, 2020)
TOTAL
2020
2019
Amounts due
for the year
Amounts paid
in 2020
Amounts due for
the year
Amount paid in
2019
23,709
-
-
-
82,750
57,200
57,200
25,481
-
25,788
25,788
59,400
15,602
40,250
-
56,000
66,000
38,000
40,250
90,750
42,500
-
-
-
31,900
31,900
28,600
14,164
51,700
41,800
14,164
51,700
41,800
36,300
47,300
39,600
33,000(1)
33,000(1)
28,600(1)
33,000
57,200
38,500
33,000
57,200
38,500
28,600
55,000
33,000
24,648
520,459
31,900
416,152
31,900
416,152
28,600
410,481
(1) The compensation due to Hervé Andorre, director representing employees, in respect of his office as director was paid to Ensemble à DS.
(2) The director compensation due to Mr. Tanneguy de Fromont de Bouaille, a director representing employees, was paid to the CFE-CGC.
(3) GIMD paid Ms. Marie-Hélène Habert-Dassault, in 2020 and 2019, a compensation of €372,592 and €366,184 respectively for her role as Director of Communication and
Patronage of Groupe Dassault. GIMD granted, in 2020 and 2019, benefits in kind relating to the use of a car, valued at €1,725 and €3,755 respectively. GIMD paid Ms. Marie- Hélène
Habert-Dassault, in 2020 and 2019, €20,000 and €36,864 respectively for her role as member of the Supervisory Board of GIMD. GIMD also paid her, in 2019, €20,000 for her
role as Chair of the Supervisory Board of GIMD until June 20, 2019.
* Mr. Hervé Andorre also received compensation, in 2020 and 2019, under his employment contract (fixed and variable compensation, payment related to the use of a vehicle and
benefits in kind related to compulsory supplementary medical coverage).
** Mr. Pascal Daloz also received compensation, in 2020 and 2019, under his employment contract (fixed and variable compensation and benefits in kind related to mandatory
complementary medical coverage).
*** Mr. Tanneguy de Fromont de Bouaille also received compensation, in 2020 and 2019, under his employment contract (fixed and variable compensation and benefits in kind related
to compulsory supplementary medical coverage).
**** Mr. Thibault de Tersant also received compensation, in 2020 and 2019, under his employment contract (fixed and variable compensation and benefits in kind related to compulsory
supplementary medical coverage and the use of a car provided by Dassault Systèmes SE).
TABLE 4: SHARE SUBSCRIPTION OR PURCHASE OPTIONS GRANTED IN 2020 TO EACH EXECUTIVE OFFICER BY THE
ISSUER AND BY ANY OF DASSAULT SYSTÈMES 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 2020
Exercise price
Exercise period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
TABLE 5: SHARE SUBSCRIPTION OR PURCHASE OPTIONS EXERCISED DURING 2020 BY EACH EXECUTIVE OFFICER
(in euros)
Charles Edelstenne
Bernard Charlès
TOTAL
216
No. and date of
the plan
Number of options
exercised in 2020
Exercise price
-
-
-
-
-
-
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5
TABLE 6: SHARES GRANTED IN 2020 TO EACH EXECUTIVE OFFICER BY THE ISSUER AND BY ANY OF DASSAULT
SYSTÈMES COMPANIES
Charles Edelstenne
Bernard Charlès
TOTAL
No. and date of the plan
Number of
performance shares
granted in 2020
Value of the
shares
(in euros)(1)
Date of
acquisition
Date of
availability
Performance
conditions
-
-
-
-
-
2020-B 5/26/2020
300,000(2)
17,526,600
5/26/2024
5/26/2024
-
Yes
300,000
(1) Value based on the method chosen for the consolidated financial statements before the spreading of the expense and after taking into account the performance criteria.
(2) Such shares have been granted to Mr. Bernard Charlès, Vice-Chairman of the Board and Chief Executive Officer, as part of the gradual process of associating him with the Company’s
capital, with the aim of ultimately recognizing his entrepreneurial role for over 35 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.
TABLE 7: SHARES THAT BECAME AVAILABLE DURING 2020 FOR EACH EXECUTIVE OFFICER
Bernard Charlès*
TOTAL
No. and date of the plan
2017-B
5/23/2017
Number of shares
that became
available in 2020
300,000
300,000
*
Such shares have been granted to Mr. Bernard Charlès, Vice-Chairman of the Board and Chief Executive Officer, as part of the gradual process of associating him with the Company’s
capital, with the aim of ultimately recognizing his entrepreneurial role for over 35 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 law, a portion of such shares is subject to lock-up
(see paragraph 5.1.3.2 “Compensation of the Chief Executive Officer”).
From a general perspective, Mr. Bernard Charlès retains the
Dassault Systèmes’ shares vested at the end of the vesting
period for the allocated shares. Thus, in 2020, Mr. Bernard
Charlès retained the 300,000 shares vested in May 2020
(2017-B allocated in 2017).
On December 31, 2019, Mr. Bernard Charlès held
3,990,441 shares, representing 1.51% of Dassault Systèmes’
share capital.
On December 31, 2020, Mr. Bernard Charlès held
4,290,441 shares, representing 1.62% of Dassault Systèmes’
share capital.
TABLE 8: HISTORY OF SHARE SUBSCRIPTION AND PURCHASE OPTIONS GRANTED
See paragraph 5.1.5 “Interests of Executive Management and Employees in the Share Capital of Dassault Systèmes SE” below.
TABLE 9: HISTORY OF PERFORMANCE SHARES GRANTED
See paragraph 5.1.5 “Interests of Executive Management and Employees in the Share Capital of Dassault Systèmes SE” below.
TABLE 10: MULTI-YEAR VARIABLE COMPENSATION GRANTED TO EACH EXECUTIVE OFFICER
The Table 9 “Summary of variable multi-annual compensations for each executive officer (dirigeant mandataire social)”
recommended by the AFEP-MEDEF Code is not relevant as no such variable multi-annual compensations have been granted to
any executive officer (dirigeant mandataire social) of Dassault Systèmes SE.
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TABLE 11: MONITORING OF THE AFEP-MEDEF’S RECOMMENDATIONS
As indicated in the table below, Dassault Systèmes SE 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 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 2022
Bernard Charlès
Vice-Chairman of the Board and Chief Executive
Officer
1st appointment as CEO: 04/08/1993
Term: until the annual General Meeting to be held
in 2022
Yes
No
X
X
Yes
No
X
Yes
Yes
No
X
X
X*
No
X
X
*
The conditions for payment and the amount of the indemnities owed are described in paragraph 5.1.3.2 “Compensation of the Chief Executive Officer”.
There is no specific additional retirement plan (régime complémentaire de retraite) for the corporate officers (dirigeants mandataires
sociaux). The companies controlled by Dassault Systèmes SE have not paid any compensation, nor granted any other benefit in
kind nor granted shares or purchase options to the executive officers (dirigeants mandataires sociaux) mentioned above.
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5
5.1.5
Interests of executive management and employees in the
share capital of Dassault Systèmes SE
The Executive team of Dassault Systèmes is given long-term
incentives notably through grants of Dassault Systèmes
performance shares or share subscription options to be
associated with the development and performance of the
Company. In general, performance shares or share subscription
options may be granted to key employees, the number granted
to each of them being dependent on individual performance
and level of responsibility.
In accordance with the AFEP-MEDEF Code, the Board
shall endeavor to grant the performance shares and share
subscription options during identical period, usually in May
after the General Shareholders’ Meeting. There may have
been rare exceptions to this rule, given the recent changes in
the tax and legal frameworks, or the compliance with the rules
regarding knowledge of inside information by the corporate
officers. This rule was complied with in 2020 with regard to
executive officers, as Bernard Charlès benefited from only one
performance share allocation on May 26, 2020.
Dassault Systèmes share subscription options
As of December 31, 2020, there were eleven active share
subscription options plans for the benefit of certain Dassault
Systèmes managers and employees. The exercise price of
share subscription options was set without a discount for all
the plans.
The General Meeting of May 23, 2019 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 3% of Dassault Systèmes SE’s share capital. At
its meeting of March 11, 2020, the Board of Directors used
this authorization to grant to 6 beneficiaries 13,193 share
subscription options (the “2020-M-01 Options”), the exercise
of which is subject to them remaining with the Company and
performance conditions for each reference year 2020, 2021
and 2022.
The General Meeting of May 26, 2020 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 4% of Dassault Systèmes SE’s share capital. The
Board of Directors used this authorization to grant:
} on May 26, 2020, to 1,047 beneficiaries, 1,490,316 stock
options (the “2020-01 Options”), the exercise of which is
subject to them remaining in the Company and performance
conditions for each reference year 2020, 2021, 2022 and
2023;
} on May 26, 2020, to 467 beneficiaries, 658,410 stock
options (the “2020-M-02 Options”);
} on September 23, 2020, to 5 beneficiaries, 35,175 stock
options (the “2020-M-03 Options”);
} on December 4, 2020, to 5 beneficiaries, 11,409 stock
options (the “2020-M-04 Options”).
the exercise of 2020-M-02, 2020-M-03 and 2020-M-04
Options being subject to them remaining in the Company and
performance conditions for each reference year 2020, 2021
and 2022.
The 2020-M-01, 2020-M-02, 2020-M-03 and 2020-M-04
were granted to MEDIDATA employees and executives, in line
with the practices of this company prior to its acquisition by
Dassault Systèmes.
The new shares created by the exercise of options between
January 1 and the date of the Annual General Meeting
deciding on the allocation of profit related to the most recently
completed fiscal 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.
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 listed 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 stock
options plans in effect during 2020.
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HISTORY OF SHARE SUBSCRIPTION AND PURCHASE OPTIONS GRANTED
(Corresponding to Table 8 of the AMF Position-Recommendation No. 2021-02)
For all the grants prior to July 17, 2014, the figures in this table (options, shares and exercise price) 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 that may
be exercised.
For more visibility, this table is divided into two parts: (1) plans from 2014 to 2019 exercise and (2) plans from 2020 exercise, the
totals being mentioned in the second part for all the plans.
Stock option plan
General Meeting
Board of Directors
Total Number of shares to be
subscribed pursuant to
options exercise
} by corporate officers
(mandataires sociaux)
Starting point for exercising
the options
2014-01
2015-01
2016-01
2017-01
2018-01
2019-01
Total
5/30/2013
5/30/2013
5/26/2016
5/26/2016
5/26/2016
5/23/2019
5/26/2014
9/04/2015
5/26/2016
5/23/2017
5/22/2018
7/01/2019
624,450
1,965,555
1,947,785
2,050,370
1,985,201
1,632,374
See table
below.
N/A
N/A
N/A
N/A
N/A
N/A
2/21/2016
9/04/2016
5/26/2017
5/23/2018
5/22/2019
5/23/2020
Expiry date
5/25/2022
9/03/2025
5/25/2026
5/22/2027
5/21/2018
5/22/2029
Exercise price (in euros)
Terms of exercise
Total number of shares
subscribed pursuant to
options exercised as of
12/31/2020
Cumulative number of
options canceled or lapsed as
at 12/31/2020
Number of options
outstanding as of
12/31/2020
Number of shares subscribed
pursuant to options exercised
between 1/1/2021 and
2/28/2021
Number of options canceled
or null and void between
1/1/2021 and 2/28/2021
Number of options
outstanding as of 2/28/2021
Total number of shares
subscribed pursuant to
options exercised as of
2/28/2021
45.50
62.00
69.00
82.00
110.00
140.00
See note(1)
See note(2)
See note(3)
See note(4)
See note (5)
See note (6)
222,647
1,314,386
1,144,947
780,354
387,323
62,743
376,176
348,501
345,426
395,243
251,933
126,768
25,627
302,668
457,412
874,773
1,345,945
1,442,863
1,500
21,074
23,152
168,896
40,474
30,931
-
-
-
-
4,261
12,533
24,127
281,594
434,260
705,877
1,301,210
1,399,399
224,147
1,335,460
1,168,099
949,250
427,797
93,674
See table
below.
See table
below.
See table
below.
See table
below.
See table
below.
See table
below.
See table
below.
(1) The 2014-01 options are exercisable by one-third tranches as from February 21, 2016, 2017 and 2018, respectively, provided that the beneficiary remains with the Company and
fulfills the performance conditions related to the target for his or her respective brand.
(2) The 2015-01 options are exercisable by one-third tranches as from September 4, 2016, 2017 and 2018, respectively, provided that the beneficiary remains with the Company and
fulfills the performance condition relating to the diluted net earnings per share on a non-IFRS consolidated basis (hereinafter referred to as the “EPS”), and/or the achievement of the
target for his or her respective brand.
(3) The 2016-01 options are exercisable by one-third tranches as from May 26, 2017, 2018 and 2019, respectively, provided that the beneficiary remains with the Company and fulfills
the performance condition relating to the EPS (neutralized from currency effects), and/or the achievement of the target for his or her respective brand.
(4) The 2017-01 options are exercisable by one-third tranches as from May 23, 2018, 2019 and 2020, respectively, provided that the beneficiary remains with the Company and fulfills
the performance condition relating to the EPS (neutralized from currency effects), and/or the achievement of the target for his or her respective brand.
(5) The 2018-01 options are exercisable by one-third tranches as from May 22, 2019, 2020 and 2021, respectively, provided that the beneficiary remains with the Company and fulfills
the performance condition relating to the EPS (neutralized from currency effects), and/or the achievement of the target for his or her respective brand.
(6) The 2019-01 options are exercisable by one-third tranches as from May 23, 2020, 2021 and 2022, respectively, provided that the beneficiary remains with the Company and fulfills
the performance condition relating to the EPS (neutralized from currency effects), and/or the achievement of the target for his or her respective brand.
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Stock option plan
General Meeting
Board of Directors
Total number of shares to be subscribed
pursuant to options exercise
} by corporate officers (mandataires
sociaux)
2020-01
2020-M-01
2020-M-02
2020-M-03
2020-M-04
5/26/2020
5/23/2019
5/26/2020
5/26/2020
5/26/2020
5/26/2020
3/11/2020
5/26/2020
9/23/2020
12/04/2020
Total*
(including the
table above)
1,490,316
13,193
658,410
35,175
11,409
12,414,238
N/A
N/A
N/A
N/A
N/A
N/A
Starting point for exercising the options
5/26/2021
3/31/2021
5/26/2021
9/23/2021
12/04/2021
Expiry date
Exercise price (in euros)
Terms of exercise
5/25/2030
3/10/2030
5/25/2030
9/22/2030
12/03/2030
145.45
131.00
145.45
157.85
152.15
See note(1)
See note(2)
See note(3)
See note(4)
See note (5)
Total number of shares subscribed pursuant
to options exercised as of 12/31/2020
Cumulative number of options canceled or
null and void as at 12/31/2020
Number of options outstanding as of
12/31/2020
Number of shares subscribed pursuant to
options exercised between 1/1/2021 and
2/29/2021
Number of options canceled or null and void
between 1/1/2021 and 2/28/2021
Number of options outstanding as of
2/28/2021
Total number of shares subscribed pursuant
to options exercised as of 2/28/2021
1,400
25,745
-
-
-
39,318
-
-
-
-
3,913,800
1,909,110
1,463,171
13,193
619,092
35,175
11,409
6,591,328
-
-
-
11,305
1,944
5,692
-
-
-
-
286,027
35,735
1,451,866
11,249
613,400
35,175
11,409
6,269,566
1,400
-
-
-
-
4,199,827
This table shows the totals for the 11 plans in effect during 2020.
*
(1) The 2020-01 options are exercisable by one-third tranches as from May 26, 2021, 2022, 2023 and 2024, respectively, provided that the beneficiary remains with the Company
and fulfills the performance condition relating to the EPS (neutralized from currency effects), and/or the achievement of the target for his or her respective brand.
(2) The 2020-M-01 options are exercisable by one-third tranches from March 31, 2021, 2022 and 2023, respectively, provided that the beneficiary remains with the Company and
fulfills the performance condition relating to the EPS (neutralized from currency effects).
(3) The 2020-M-02 options are exercisable by one-third tranches from May 26, 2021, 2022 and 2023, respectively, provided that the beneficiary remains with the Company and
fulfills the performance condition relating to the EPS (neutralized from currency effects).
(4) The 2020-M-03 options are exercisable by one-third tranches from September 23, 2021, 2022 and 2023, respectively, provided that the beneficiary remains with the Company
and fulfills the performance condition relating to the EPS (neutralized from currency effects).
(5) The 2020-M-04 options are exercisable by one-third tranches from December 4, 2021, 2022 and 2023, respectively, provided that the beneficiary remains with the Company and
fulfills the performance condition relating to the EPS (neutralized from currency effects).
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, 2021.”
As of December 31, 2020, no director held share subscription
options.
For information regarding the equity interests in Dassault
Systèmes SE of the corporate officers (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 d’enregistrement universel).
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SHARE SUBSCRIPTION AND PURCHASE OPTIONS OF THE TOP TEN EMPLOYEES OF DASSAULT SYSTÈMES WHO ARE
NOT CORPORATE OFFICERS (MANDATAIRES SOCIAUX) AND THE OPTIONS THEY EXERCISED DURING 2020
(Corresponding to Table 9 of the AMF Position-Recommendation No. 2021-02)
The following table shows, on aggregate, the total number and weighted average exercise price of options granted to, and options
exercised by, the ten Dassault Systèmes employees who obtained or exercised the largest number of Dassault Systèmes stock
options during 2020 and who are not corporate officers of Dassault Systèmes SE.
Total number of
options
Weighted
average price
per option
Plan no.
2014-01
Plan no.
2015-01
Plan no.
2016-01
Plan no.
2017-01
Plan no.
2018-01
Plan no.
2019-01
Stock options exercised in 2020 by
the ten employees who subscribed
for the largest number of stock
options*
Options granted in 2020 to the
ten employees who got the largest
number of stock options
362,215
€70.71
8,850
77,486
188,588
52,420
25,719
9,152
Total number of
options
Weighted
average price
per option
Plan no.
2020-M-01
Plan no.
2020-M-02
Plan no.
2020-M-03
Plan no.
2020-M-04
Plan no.
2020-01
470,755
€146.13
13,193
200,278
35,175
11,409
210,700
Performance shares
The General Meeting of May 22, 2018 authorized the Board
of Directors to grant Dassault Systèmes shares for up to a
maximum of 2% of Dassault Systèmes SE’s capital at the date
of the grant by the Board (i.e. 5,288,565 shares as at May 26,
2020). The Board, at its meeting of May 26, 2020, used this
authorization to allocate (i) 804,966 “2020-A” performance
shares to 846 beneficiaries, all employees of the Company
excluding MEDIDATA, and 56,721 “2020-M” shares to
11 beneficiaries, all employees of MEDIDATA, as well as
(ii) 300,000 “2020-B” shares to Mr. Bernard Charlès.
None of the beneficiaries of the “2020-A” and “2020-B”
plans are beneficiaries of the “2020-M” plan.
The following table provides certain information on the stock
options plans in effect during 2020.
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5
HISTORY OF PERFORMANCE SHARES GRANTED
(Corresponding to Table 10 of the AMF Position-Recommendation No. 2021-02)
Plan Number
General Meeting
2017-A
2018-A
2019-A
2019-A2
2020-M
2020-A
Total
9/04/2015
9/04/2015
9/04/2015
5/22/2018
5/22/2018
5/22/2018
Date of the Board meeting
5/23/2017
5/22/2018
9/25/2018
7/01/2019
5/26/2020
5/26/2020
Total number of shares granted
including the number granted to:
} to corporate officers
(mandataires sociaux)(1)
Thibault de Tersant
Pascal Daloz
801,700
815,730
496,700
307,615
56,721
804,966
3,283,432
90,000
40,000
50,000
100,000
40,000
60,000
90,000
30,000
60,000
-
-
-
-
-
-
80,000
-
80,000
360,000
110,000
250,000
Vesting date of shares
5/23/2020
5/22/2021
5/23/2022
5/23/2022
5/26/2023
5/26/2024
Date of end of holding period
Performance conditions
Number of shares vested as at
02/28/2021
Cumulative number of shares
canceled or null and void as at
12/31/2020
Performance shares remaining at
the end of 2020
None
Yes(2)
729,050
None
Yes(3)
-
None
Yes(4)
-
None
Yes(5)
-
72,650
52,950
5,200
8,570
None
Yes(6)
None
Yes
None
(7)
-
-
-
729,050
900
140,270
-
762,780
491,500
299,045
56,721
804,066
2,414,112
(1) No 2017-A, 2018-A, 2019-A, 2019-A2, 2020-A or 2020-M performance shares were awarded to corporate officers (excluding the directors representing employees) other than
Messrs. Thibault de Tersant and Pascal Daloz. For share grants to Mr. Bernard Charlès, see the table below “History of share grants to Mr. Bernard Charlès, Vice-Chairman of the
Board and Chief Executive Officer, in respect of the gradual process of associating Mr. Bernard Charlès with the Company’s share capital”.
(2) The 2017-A shares will be fully vested at the end of the vesting period, provided that the beneficiary remains with the Company and fulfills at least one of the following
performance conditions, the achievement of which will be measured in 2020: growth in the EPS compared to 2016, and such growth must be at least equal to the percentage fixed
at the Board meeting at which the shares were granted.
(3) The 2018-A shares will be fully vested at the end of the vesting period, provided that the beneficiary remains with the Company and fulfills at least one of the following
performance conditions, the achievement of which will be measured in 2021: growth in the EPS compared to 2017, and such growth must be at least equal to the percentage fixed
at the Board meeting at which the shares were granted.
(4) The 2019-A shares will be fully vested at the end of the vesting period, provided that the beneficiary remains with the Company and fulfills at least one of the following
performance conditions, the achievement of which will be measured in 2022: growth in the EPS compared to 2018, and such growth must be at least equal to the percentage fixed
at the Board meeting at which the shares were granted.
(5) The 2019-A2 shares will be fully vested at the end of the vesting period, provided that the beneficiary remains with the Company and fulfills at least one of the following
performance conditions, the achievement of which will be measured in 2022: growth in the EPS compared to 2018, and such growth must be at least equal to the percentage fixed
at the Board meeting at which the shares were granted.
(6) The 2020-M Shares will only vest at the end of the vesting period, provided that the beneficiary remains with the Company and fulfills the following performance condition, the
achievement of which will be measured in 2023: double growth criterion for non-IFRS revenue of the MEDIDATA brand compared to that achieved in 2019 and increase in the
percentage of the non-IFRS operating margin of the MEDIDATA brand compared to 2019.
(7) The 2020-A Shares will only vest at the end of the vesting period, provided that the beneficiary remains with the Company and fulfills the following performance condition, the
achievement of which will be measured in 2024: growth in EPS compared to that achieved in 2019. The Board having allocated these shares has set two limits: if the growth of
the EPS is at least equal to the upper limit, all the shares will be vested. If this is below the lower limit, no shares will be vested. Between these two thresholds, the number of
shares granted will vary linearly.
Grant of rights to receive Dassault Systèmes SE shares
in replacement of rights to receive MEDIDATA shares
As part of the acquisition of Medidata Solutions, Inc., and subject
to its closing, the Board of Directors approved on June 11, 2019
the grant of rights to receive Dassault Systèmes SE shares in
replacement of the rights to receive MEDIDATA shares that had
been granted to some of its employees and executives. This grant
amounts to a maximum of 1,894,649 Dassault Systèmes SE
shares and will be definitively vested if the beneficiaries are
still employees upon the expiry of the vesting periods.
The weighted average vesting period of these shares is
1.41 year from the closing date of the acquisition of MEDIDATA
and the last vesting date of these shares is September 2023.
The weighted average grant-date fair value of the Dassault
Systèmes SE shares was:
} €134.15 for equity awards which also gave right at vesting
date to all dividends paid during the vesting period;
} €132.80 for other equity awards.
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HISTORY OF SHARE GRANTS TO BERNARD CHARLÈS, VICE-CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
OFFICER, IN RESPECT OF THE GRADUAL PROCESS OF ASSOCIATING BERNARD CHARLÈS WITH THE COMPANY’S
SHARE CAPITAL
(See also paragraph 5.1.3.2 “Compensation of the Chief Executive Officer”)
Plan Details
General Meeting
Board of Directors
2017-B
2018-B
2019-B
2020-B
9/04/2015
9/04/2015
9/04/2015
5/22/2018
5/23/2017
5/22/2018
9/25/2018
5/26/2020
Total number of shares granted to Bernard Charlès
300,000
300,000
300,000
300,000
Vesting date of shares
Date of end of holding period(1)
Performance conditions
5/23/2020
5/22/2021
5/23/2022
5/26/2024
None
None
None
None
See note (2)
See note (3)
See note (4)
See note (5)
Number of shares vested by Bernard Charlès as at 2/28/2021
300,000
-
-
-
(1) Non applicable to the shares subject to the legal lock-up commitment set by the Board of Directors (see paragraph 5.1.3.2 “Compensation of the Chief Executive Officer”).
(2) The same performance condition as that stipulated for the 2017-A performance shares granted by the Board on the same day to certain employees of Dassault Systèmes.
(3) Performance condition identical to the one stipulated for the 2018-A performance shares granted by the Board on the same day to certain Dassault Systèmes employees (see table
above “History of performance shares granted”).
(4) Performance condition identical to the one stipulated for the 2019-A performance shares granted by the Board on the same day to certain Dassault Systèmes employees (see table
above “History of performance shares granted”).
(5) Performance condition identical to the one stipulated for the 2020-A performance shares granted by the Board on the same day to certain Dassault Systèmes employees (see table
above “History of performance shares granted”).
From a general perspective, Mr. Bernard Charlès retains
the Dassault Systèmes’ shares vested at the end of the
vesting period for the allocated shares. Thus, in 2020,
Mr. Bernard Charlès retained the 300,000 shares vested in
May 2020 (2017-B allocated in 2017).
On December 31, 2019, Mr. Bernard Charlès held 3,990,441
shares, representing 1.51% of Dassault Systèmes’ share
capital.
On December 31, 2020, Mr. Bernard Charlès held 4,290,441
shares, representing 1.62% of Dassault Systèmes’ share
capital
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5
5.1.6 Application of the AFEP-MEDEF Code
Dassault Systèmes refers to the recommendations of the AFEP-MEDEF Code revised in January 2020 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 SE has not adopted all of the Code’s recommendations, 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.
Recommendations of the
AFEP-MEDEF Code
Explanation
Proportion of performance
shares in the compensation of
executive officers
(Article 25.3.3)
A significant portion of the shares granted to Mr. Bernard Charlès, Vice-Chairman of the Board and Chief
Executive Officer, falls under the plan adopted several years ago to progressively make him a company
shareholder, with the aim of ultimately recognizing his entrepreneurial role for over 35 years with Dassault
Systèmes and to provide him an equity interest comparable to that of founders of companies in the same
sector, or more generally, of his peers in technology companies around the world.
Appointment of the directors
representing employees to the
Compensation and Nomination
Committee
(Article 18.1)
The Board of Directors considers that the composition of the Compensation and Nomination Committee, as
well as the composition of all the Board Committees – 100% independent directors – is the best guarantee of
its effectiveness. The Compensation and Nomination Committee’s discussions are carefully reported and the
Committee’s recommendations are debated during the Board meetings. All directors, including the directors
representing employees, have the opportunity to express their opinions on the subjects dealt with by the
Committee.
Number of shares that the
executive officers are required
to hold in registered form
(Article 23)
Due to Mr. Edelstenne’s role as founder and his shareholding (approximatively 8% of the voting rights), the
Board considered that it was unnecessary to set a minimum quantity of shares to be held in registered form.
5.1.7 Other Information Required by Articles L. 225-37
and L. 22- 10-8 et seq. of the French Commercial Code
5.1.7.2
Table Summarizing the Current
Delegations Granted by the General
Meeting in respect of Capital
Increases
The following table summarizes the delegations of authority
and authorizations granted by the General Meeting to the
Board of Directors and in effect during the 2020 fiscal year and
as of the date of this Annual Report. It includes authorizations
to increase share capital and to repurchase and cancel Dassault
Systèmes’ own shares.
5.1.7.1
Specific Conditions Related to
Shareholder Participation in the
General Meeting
Shareholders participate in the General Meetings of the
Dassault Systèmes SE in accordance with applicable law and
Dassault Systèmes’ by-laws (Articles 24 to 33). Thus, every
shareholder has the right to participate in General Meetings
and deliberations either personally or via a proxy, regardless
of the number of shares held, according to the conditions
specified by Article 27 of the by-laws of Dassault Systèmes
(see paragraph 6.1.2 “Memorandum and Specific By-Laws
Provisions”).
In 2020, in the specific context of the COVID-19 crisis,
attendance at the General Meeting of Dassault Systèmes
was compliant with Order 2020-321 of March 25, 2020 and
Decree 2020-418 of April 10, 2020.
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).
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Resolutions and General
Meetings (“GM”)
Description of the delegation of authority granted to the Board of Directors
Utilization in the fiscal year
SHARES BUYBACK AND CANCELLATION OF SHARES
12th resolution
GM of 5/26/2020
13th resolution
GM of 5/26/2020
Authorization: purchase Dassault Systèmes shares.
Duration: approximately 12 months (expiring at the GM approving the financial
statements for the fiscal year ending December 31, 2020).
Ceiling: 5 million shares representing up to €800 million.
Cannot be used during a public offering period.
Authorization: cancel shares purchased under the buyback program.
Duration: approximately 12 months (expiring at the GM approving the financial
statements for the fiscal year ending December 31, 2020).
Cap: 5% of share capital in a 24-month period.
See paragraph 6.2.4 “Share
Buyback programs”
See paragraph 6.2.4 “Share
Buyback programs”
ISSUANCE OF SECURITIES
13th resolution
GM of 05/23/2019
14th resolution
GM of 05/23/2019
15th resolution
GM of 05/23/2019
16th resolution
GM of 05/23/2019
17th resolution
GM of 05/23/2019
18th resolution
GM of 05/23/2019
Authorization: increase the share capital by issuing shares or securities giving right
to shares of Dassault Systèmes SE or equity securities giving right to debt
securities, with the preemptive right of shareholders.
Duration: 26 months, i.e. until 07/23/2021.
Cap: for a maximum nominal amount of €12 million for shares or securities – for a
maximum nominal amount of €1 billion for debt securities.
Cannot be used during a public offering period.
Authorization: increase the share capital by issuing shares or securities giving right
to shares of Dassault Systèmes SE or equity securities giving right to debt
securities, with a waiver of the preemptive right of shareholders and by way of a
public offering.
Duration: 26 months, i.e. until 07/23/2021.
Cap: for a maximum nominal amount of €12 million for shares or securities – for a
maximum nominal amount of €1 billion for debt securities (to be deducted from
the caps set out in the 13th resolution).
Cannot be used during a public offering period.
Authorization: increase the share capital by issuing shares or securities giving right
to shares of Dassault Systèmes SE or equity securities giving right to debt
securities, under the delegation of authority referred to in the previous resolution,
by a private placement pursuant to section II of the Article L. 411-2 of the French
Monetary and Financial Code.
Duration: 26 months, i.e. until 07/23/2021.
Cap: for a maximum nominal amount of €12 million for shares or securities – for a
maximum nominal amount of €1 billion for debt securities (to be deducted from
the caps set out in the 13th resolution).
Cannot be used during a public offering period.
Authorization: increase the number of securities to issue in the case of a share
capital increase with or without the preemptive right of shareholders.
Duration: 26 months, i.e. until 07/23/2021.
Cap: 15% of the initial issue, to be deducted from the cap provided for in the
13th resolution.
Cannot be used during a public offering period.
Authorization: increase the share capital by incorporation of reserves, profits or
premiums.
Duration: 26 months, i.e. until 07/23/2021.
Cap: for a maximum nominal amount of €12 million (to be deducted from the cap
set out in the 13th resolution).
Cannot be used during a public offering period.
Authorization: increase the share capital to remunerate contributions in kind of
shares or equity-linked securities.
Duration: 26 months, i.e. until 07/23/2021.
Cap: 10% of the share capital.
Cannot be used during a public offering period.
None
None
None
None
None
None
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Resolutions and General
Meetings (“GM”)
Description of the delegation of authority granted to the Board of Directors
Utilization in the fiscal year
ISSUANCE FOR THE BENEFIT OF EMPLOYEES AND EXECUTIVE OFFICERS
17th resolution
GM of 5/22/2018
15th resolution
GM of 5/26/2020
16th resolution
GM of 5/26/2020
Authorization: grant free shares, existing or to be issued, for the benefit of certain
employees and/or corporate officers of Dassault Systèmes SE and its affiliated
entities as defined in Article L. 225-197-2 of the French Commercial Code.
Duration: 38 months, i.e. until 7/22/2021.
Cap: 2% of share capital.
Authorization: grant stock options giving right to subscribe to new shares or
purchase existing shares for the benefit of certain employees and/or corporate
officers of Dassault Systèmes SE and its affiliated entities as defined in
Article L. 225-180 of the French Commercial Code.
Duration: 38 months, i.e. until 7/26/2023.
Cap: 4% of share capital.
Described in
paragraph 5.1.5 “Interests
of Executive Management
and Employees in the Share
Capital of Dassault
Systèmes SE”
Described in
paragraph 5.1.5 “Interests
of Executive Management
and Employees in the Share
Capital of Dassault
Systèmes SE”
Authorization: increase the share capital for the benefit of members of a corporate
savings plan of Dassault Systèmes SE and/or its affiliated entities.
Duration: 26 months, i.e. until 7/26/2022.
Cap: for a maximum nominal amount of €1 million (to be deducted from the cap
set out in the 13th resolution of the General Meeting on 05/23/2019).
None
It is proposed to the General Meeting among other resolutions
(see paragraph 7.1 “Presentation of the Resolutions Proposed
by the Board of Directors to the General Meeting of May 26,
2021”):
} to renew the authorizations to purchase Dassault Systèmes
shares and to cancel these purchased shares, which expire
on May 26, 2021, (see paragraph 6.2.4.2 “Description
of the Share Buyback Program Proposed to the General
Meeting on May 26, 2021”);
} to renew the delegations relating to the issuance of
Dassault Systèmes shares under the conditions describe in
paragraph 7.1.10 “Delegations of authority and powers to
increase the share capital”;
} to authorize again the Board of Directors to grant free
Dassault Systèmes’ shares.
5.1.7.3 Draft Resolutions Prepared by the
Board pursuant to the General
Meeting Vote on the Compensation
Policy
The draft resolution in respect of the vote on the compensation
policy is set out in paragraph 7.2 “Text of the Draft Resolutions
Proposed by the Board of Directors to the General Meeting on
May 26, 2021”.
5.1.7.4
Possible Consequences in case
of a Public Tender Offer
The information required by Article L. 22-10-11 of the French
Commercial Code is contained in paragraphs 6.3 “Information
about the Shareholders” (concerning control of GIMD), 6.1.3.2
“General Meetings” (concerning the conditions for exercising
voting rights) and 5.1.3.2 “Compensation of the Chief
Executive Officer” of this Annual Report.
The Annual Report (Document d’enregistrement universel)
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 d’enregistrement universel) becomes available.
Under the credit agreement executed on June 11, 2019, if
a person or a group of persons acting in concert (with the
exception of GIMD and/or Mr. Charles Edelstenne) takes
control (within the meaning of Article L. 233-3 I 1° and 2°
and II of the French Commercial Code) of Dassault Systèmes,
the early repayment of the financing arranged for the
acquisition of Medidata Solutions, Inc. may be requested by
the lenders. Specifically, in the event of such a change of
control of Dassault Systèmes, any lender participating in the
€1 billion term credit facility or €750 million revolving credit
facility, may request the cancellation of its entire commitment
in respect of the facility and the immediate repayment of its
share of all outstanding advances.
In addition, if such a change of control results in a rating
downgrade, below investment grade, for the bonds issued
by Dassault Systèmes on September 16, 2019 for a total of
€3.65 billion, bondholders may request the redemption at par
of the bonds they hold.
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5.1.7.5 Gender Equality within the
Executive Team and Top Positions
of Responsibility
Dassault Systèmes has a strong ambition in terms of gender
equality, including within the Executive team and top positions
of responsibility.
Initiatives are thus spearheaded within the Company in favor of
women’s recruitment, the ability to hire more female engineers
being however very limited as they are under- represented in
engineering schools and the High-tech sector. Initiatives are
also spearheaded in order to understand their specific needs
and in favor of various professional experiences as well as to
support women gaining responsibility in a successful manner.
The 3DS WIN (Women Initiative) internal community, launched
in 2012, continues to foster a network of women and men
determined to encourage, inspire and mentor women to
develop their careers within Dassault Systèmes. As currently,
this community has over 1,200 worldwide members. In 2020,
numerous initiatives were set up with the aim of promoting and
reinforcing female leadership, for instance the participation to
the Cercle InterElles’ conference or the organization of internal
events such as the WIN Lunch & Talk and the WIN Virtual Talk.
At the level of Dassault Systèmes SE, the proportion of women
in the top 10% of positions with responsibility is monitored
on the basis of targets assessed annually. As of today, the
proportion of women in those positions equals to 30%.
Moreover, the proportion of women on the Executive team is
currently 38.5%, compared with 22% in 2019 and the Board
of Directors of Dassault Systèmes SE has set the objective of
maintaining a proportion of women of approximatively 40%.
(see paragraph 5.1.2 “Executives of Dassault Systèmes”).
5.1.7.6
Procedure for Evaluating
Related- Party Agreements
At its meeting on March 11, 2020, the Board of Directors
adopted a procedure for classifying related-party agreements,
subjecting them, where appropriate, to the regulated
agreements procedure and, for routine transactions entered
into at arm’s length, regularly assessing whether they satisfy
those conditions.
The Legal Affairs Division, with the support of the Financial
Division, is thus responsible for reviewing prior to its conclusion,
and in the event of its amendment, renewal or extension, any
agreement entered into by Dassault Systèmes SE and a related
party (as provided for in Article L. 225-38 of the French
Commercial Code) and conducts an annual review of standard
agreements entered into at arm’s length, during the last fiscal
year or earlier, as long as their effects continue.
The results of the assessment of non-regulated agreements
are presented to the Board’s Audit Committee which decides
upon it.
In early 2021, the Legal Affairs Division thus carried out a
comprehensive review of related-party agreements considered
to be routine transactions entered into at arm’s length and
concluded that all such agreements continue to satisfy both
of these conditions.
5.1.7.7 Agreements with a Company
Controlled by Dassault Systèmes SE
No agreement was entered into directly or by an intermediary
person between, on the one hand, one of Dassault Systèmes
SE’s corporate officers or shareholders owning more than 10%
of voting rights and, on the other hand, a company controlled
by Dassault Systèmes SE.
Charles Edelstenne
Chairman of the Board
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Internal Control Procedures and Risk Management
5
5.2
Internal Control Procedures and Risk Management
5.2.1 Definition and Objectives of Internal 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 Dassault Systèmes,
whether at the level of Dassault Systèmes SE or its subsidiaries,
are designed to:
} improve the performance and efficiency of operations
through optimized use of available resources (an objective
inspired by the COSO framework);
} ensure the reliability, quality and availability of financial data
(an objective inspired by the COSO and AMF frameworks);
} ensure that operations comply with legislation in effect
and Dassault Systèmes’ internal procedures (an objective
inspired by the COSO and AMF frameworks);
} guarantee the security of assets, particularly intellectual
property, the human and financial resources and the image
of Dassault Systèmes (an objective inspired by the AMF
framework);
} prevent risks of error or fraud (an objective inspired by the
COSO and AMF frameworks).
5.2.2
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. “Composition and
Practices of the Board of Directors”).
The internal control is also based on the principle of giving
responsibility to each of the departments and subsidiaries of
Dassault Systèmes, in its respective area of expertise, and on
delegations of powers to certain members of the Executive
Committee Operations of Dassault Systèmes, such delegations
having specific fields of application.
} The subsidiaries’ local chief executive and financial officers
are responsible for preparing the subsidiaries’ financial
statements which are included in Dassault Systèmes’
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 located particularly in
France, the United States, Japan, and Malaysia;
} Dassault Systèmes’ Financial Planning and Analysis
is responsible for directing the financial
department
objectives of Dassault Systèmes in accordance with budget
monitoring procedures and, in this respect, performs specific
controls and analyzes of the quarterly accounts. It is also
responsible for identifying, analyzing and warning of any
differences from the previous year, the previous quarter and
Dassault Systèmes’ budget objectives, which are subject to
a quarterly update;
} The Internal Audit department, reporting to the Dassault
Systèmes Financial Officer on the one hand and to the
Audit Committee on the other hand, has the main mission
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. The Internal Audit department also
has the responsibility for the annual assessment, on behalf
of the management, of the internal control mechanisms
related to financial reporting;
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Internal Control Procedures and Risk Management
} The team in charge of Business Ethics and Compliance,
reporting to the General Secretary, is responsible for
ensuring the implementation of and respect for the
principles described in the Code of Business Conduct of
Dassault Systèmes (the “Code of Business Conduct”), as well
as Dassault Systèmes’ 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, in particular through
the whistleblowing procedure.
In parallel, Dassault Systèmes’s management has established
the following bodies:
} a Disclosure Committee, responsible for deciding whether
an information is considered as inside information and if the
publication of such information may be deferred, ensuring
compliance with the conditions allowing a deferral of
publication, documenting it and informing the AMF at the
time of publication;
} 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 trading Dassault Systèmes securities.
These blackout periods are longer than those set forth
by law. In addition, as soon as they have regular access
to privileged and insider information in relation to their
roles, all persons must obtain the Insider Committee’s prior
approval for any transactions involving Dassault Systèmes’
securities (as defined in its Insider Trading Rules). Dassault
Systèmes complies with laws and regulations regarding the
prevention of insider trading on a general basis.
5.2.3
Internal Control and Risk Management Procedures
The internal control mechanisms developed by Dassault
Systèmes promote internal control in the following areas:
} control environment: Dassault Systèmes’ business ethics
rules are formalized in particular in the Code of Business
Conduct, a new version of which was rolled out in 2020.
It describes the manner in which the Company expects
its business to be conducted, and is intended to serve as
a reference for all Dassault Systèmes employees to guide
their behavior and interactions in their daily activities
(see paragraph 2.6.1 “Promoting Strong Business Ethics”).
The Code of Business Conduct, which applies to all
employees of Dassault Systèmes and is available on Dassault
Systèmes’ internet site and internal platform, addresses, in
particular (i) compliance with regulations applicable to the
Dassault Systèmes’s business, (ii) individual interactions
within Dassault Systèmes and with its ecosystem and
(iii) protecting Dassault Systèmes’ assets (in particular,
its intellectual property and that of its clients and partners).
The Code also includes specific policies on the fight
against corruption and influence-peddling, conflicts of
interest, personal data protection and insider trading. The
distribution of these policies is accompanied by training,
which is specifically provided to any new employee and
to employees joining Dassault Systèmes as part of the
integration process for such acquisitions;
} risk analysis: the main risks which may impact the
performance of the company are identified, assessed and
regularly reviewed by Dassault Systèmes management.
These risks, after taking into account risk management
policies, are described in paragraphs 1.9.1 “Risks related
Dassault Systèmes’ Business” and 1.9.2 “Financial and
Market Risks”.
Operational risks are essentially managed by subsidiaries.
Certain risks, particularly in the area of intellectual property
protection, ethics and compliance, and legal and financial risks
are specifically monitored by Dassault Systèmes SE in addition
to their monitoring at local level:
} protection and monitoring activities:
} protecting its intellectual property is an on-going concern
for Dassault Systèmes. This protection is ensured by
implementing and monitoring corporate processes
designed to verify Dassault Systèmes rights before
it markets its software products. Dassault Systèmes
also protects its inventions through a reasonable and
well-considered approach to filing patents in several
jurisdictions. Dassault Systèmes principal brands are also
registered in a large number of countries. The Company
is continuing to actively develop its program designed to
fight against infringement concerning its products;
} information systems security, which is critical to ensuring
the protection of the source codes for Dassault Systèmes
applications and its data as well as those of its customers,
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;
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Corporate governance
Internal Control Procedures and Risk Management
5
} monitoring: Dassault Systèmes 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, and activity reviews). In addition, quarterly
communication meetings are also held to ensure a better
dissemination of Dassault Systèmes strategy to all its
employees and discussions facilitating its implementation.
} audit missions: In 2020, the Internal Audit department
carried out different missions within Dassault Systèmes’
subsidiaries to verify compliance of the local internal control
procedures with Dassault Systèmes 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.
} the
implementation of
internal preventive measures
to continue operations and limit the impact of a major
incident. 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 Dassault Systèmes. The computer
protection systems are maintained in different sites;
} 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
statements, treasury management and client credit risk
management) are formalized and updated at the level of
both Dassault Systèmes SE and its main subsidiaries or
the related shared services centers;
} key control points making it possible to prevent or detect
risks impacting the financial information in Dassault
Systèmes’ significant entities are documented.
5.2.4
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, Dassault
Systèmes’s focus has been to:
} implement a quarterly control system to update budget
objectives and identify and analyze any variation from the
objectives set by the Financial Department of Dassault
Systèmes, and from the previous quarter and fiscal year.
Thus, each of the organizations (geographic regions, brands,
functions) 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 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 Financial 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;
} improve the reliability of its consolidation tools and
in order to establish and publish required
processes
financial information every quarter as soon as possible. The
consolidation procedure as defined by Dassault Systèmes SE
is based on:
} giving responsibility to the chief financial officers in the
subsidiaries, who are required to certify the quarterly
statements transmitted to Dassault Systèmes SE and to
provide detailed business reviews and analyses before the
accounts are consolidated,
} the use of consolidation tools that make data transmission
and processing secure and allow the elimination of intra-
group transactions,
} standardization of processes and information systems,
particularly with respect to centralizing and recording
most of the transactions at shared service centers,
} the implementation of an annual process to monitor
related-party
off-balance sheet commitments and
agreements,
} a detailed review by Dassault Systèmes’ Financial Division
of the quarterly accounts of Dassault Systèmes SE and its
subsidiaries,
} the detailed analysis by Dassault Systèmes’ Accounting
Department of all the material software license and/
or service transactions in order to validate their correct
accounting recognition;
} systematize the processes by which the Audit Committee
and the Board of Directors review financial information
prior to publication;
} 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.
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DASSAULT SYSTÈMES ANNUAL REPORT 20205 5 Corporate governance
Internal Control Procedures and Risk Management
5.2.5 Evaluation of Internal Control
The company’s management seeks to maintain a high level of
internal control within Dassault Systèmes. Detailed assessment
work (particularly on key control points) was therefore carried
out in 2020 by the Internal Audit department, 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 Dassault Systèmes entities subjected
to internal control evaluations, in the form of self-evaluation
questionnaires and internal control reviews conducted in the
months immediately following acquisition may be expanded
to entities that had previously been considered immaterial and
to newly acquired companies. The results of the evaluation
of the internal control are presented to the Audit Committee.
In addition, internal control’s efficiency is assessed by the
Statutory Auditors as part of their annual mission.
5.2.6 Limitations of Internal Control
The internal control system cannot provide an absolute
guarantee that Dassault Systèmes’ objectives in this area will
be achieved. Inherent limitations apply to all internal control
systems, related in particular to the exercise of individual
judgments, or dysfunctions which may occur as a result of
human failure or simple error or in the external environment.
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Corporate governance
Transactions in Dassault Systèmes shares by the Management of Dassault Systèmes
5
5.3 Transactions in Dassault Systèmes shares by the
Management of Dassault Systèmes
Pursuant to Article 223-26 of the AMF General Regulation, the table below shows transactions involving securities issued by
Dassault Systèmes carried out in 2020 by directors or Executives of Dassault Systèmes or by persons related to them (according
to Article L. 621-18-2 of the French Monetary and Financial Code) on the basis of the declarations made by the relevant parties
to the AMF, available on www.amf-france.org.
Date
Place
2/11/2020
Euronext Paris
2/11/2020
Euronext Paris
2/12/2020
Euronext Paris
2/14/2020
OTC
2/17/2020
OTC
2/18/2020
Euronext Paris
2/18/2020
OTC
2/12/2020
OTC
2/25/2020
OTC
2/27/2020
OTC
2/28/2020
Euronext Paris
3/03/2020
OTC
3/04/2020
Euronext Paris
3/05/2020
OTC
3/06/2020
Euronext Paris
3/06/2020
Euronext Paris
3/06/2020
Euronext Paris
3/09/2020
Euronext Paris
3/9/2020
Euronext Paris
Person concerned
Bruno Latchague
Bruno Latchague
Nature of the transaction
Unit price
(in euros)
Volume
Exercise of stock options
62.0000
46,667
Sale of shares
155.7104
46,667
Thibault de Tersant
Sale of shares
155.4407
15,000
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.1740
10,500
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.6420
10,500
Legal entity related to Charles Edelstenne (GIMD)
Acquisition of shares
154.6533
30,000
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.6120
10,500
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.6100
10,500
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
4.1317
10,500
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.8475
11,000
Legal entity related to Charles Edelstenne (GIMD)
Acquisition of shares
144.2810
30,000
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.7130
11,000
Legal entity related to Charles Edelstenne (GIMD)
Acquisition of shares
142.1990
20,000
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.7932
11,000
Legal entity related to Charles Edelstenne (GIMD)
Acquisition of shares
139.5050
10,000
Natural person related to Catherine Dassault
(François Dassault)
Acquisition of shares
139.1000
100
Catherine Dassault
Acquisition of shares
137.9500
1,000
Person related to Catherine Dassault (Vincent
Dassault)
Acquisition of shares
131.4600
1,130
Charles Edelstenne
Acquisition of shares
133.0300
26,031
3/9/2020
Chix Turquoise
Aquis Exchange Bate
Charles Edelstenne
Acquisition of shares
133.1655
11,539
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DASSAULT SYSTÈMES ANNUAL REPORT 20205 5 Corporate governance
Transactions in Dassault Systèmes shares by the Management of Dassault Systèmes
Date
Place
3/11/2020
Euronext Paris
3/11/2020
Euronext Paris
04/27/2020
Euronext Paris
5/06/2020
OTC
5/06/2020
OTC
5/11/2020
OTC
5/13/2020
OTC
5/18/2020
OTC
5/18/2020
OTC
5/20/2020
OTC
5/22/2020
Off-trading
platform
Person concerned
Nature of the transaction
Unit price
(in euros)
Volume
Legal entity related to Laurent Dassault (SAS
LDRP II)
Acquisition of shares
132.9677
7,370
Legal entity related to Charles Edelstenne (GIMD)
Acquisition of shares
132.9697
60,000
Thibault de Tersant
Sale of shares
139.6682
15,000
Legal entity related to Charles Edelstenne (GIMD)
Acquisition of put options
3.0187
11,000
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
7.7000
11,000
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
4.8750
11,000
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
6.0300
11,000
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
9.0300
10,500
Legal entity related to Charles Edelstenne (GIMD)
Acquisition of put options
5.9000
10,500
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
6.8400
10,500
Bruno Latchague
Exercisability of stock options
0.0000
46,666
5/22/2020
Off-trading platform Erik Swedberg
5/23/2020
Off-trading platform Erik Swedberg
5/23/2020
Off-trading platform Bruno Latchague
5/23/2020
Off-trading platform Bernard Charlès
5/23/2020
Off-trading platform Olivier Ribet
5/23/2020
Off-trading platform Sylvain Laurent
5/23/2020
Off-trading platform Pascal Daloz
5/23/2020
Off-trading platform Dominique Florack
5/23/2020
Off-trading platform Thibault de Tersant
5/23/2020
Off-trading platform Laurence Barthès
Exercisability of stock options
0.0000
816
Exercisability of stock options
0.0000
1,226
Exercisability of stock options
0.0000
93,335
Acquisition of shares
0.0000
300,000
Acquisition of shares
0.0000
4,000
Acquisition of shares
0.0000
26,000
Acquisition of shares
0.0000
50,000
Acquisition of shares
0.0000
65,000
Acquisition of shares
0.0000
40,000
Acquisition of shares
0.0000
18,000
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Corporate governance
Transactions in Dassault Systèmes shares by the Management of Dassault Systèmes
5
Date
Place
Person concerned
Nature of the transaction
Unit price
(in euros)
Volume
5/23/2020
Off-trading platform Florence Hu-Aubigny
5/23/2020
Off-trading platform Samson Khaou
5/23/2020
Off-trading platform Philippe Laufer
5/28/2020
Euronext Paris
5/28/2020
Euronext Paris
Bruno Latchague
Bruno Latchague
06/08/2020
Off-trading platform Sylvain Laurent
Acquisition of shares
0.0000
20,000
Acquisition of shares
0.0000
1,500
Acquisition of shares
0.0000
20,000
Exercise of stock options
69.0000
46,666
Sale of shares
148.6613
46,666
Sale of shares
152.0500
26,000
06/09/2020
Euronext Paris
07/24/2020
Chix Turquoise
Aquis Exchange Bate
07/24/2020
Euronext Paris
07/30/2020
Euronext Paris
08/11/2020
Euronext Paris
09/01/2020
Euronext Paris
09/07/2020
Euronext Paris
10/23/2020
Euronext Paris
10/26/2020
OTC
10/26/2020
Euronext Paris
10/27/2020
OTC
10/28/2020
OTC
10/29/2020
OTC
10/30/2020
OTC
Florence Hu-Aubigny
Sale of shares
151.3789
8,000
Charles Edelstenne
Charles Edelstenne
Acquisition of shares
144.3929
16,746
Acquisition of shares
144.4642
11,584
Thibault de Tersant
Sale of shares
152.1574
14,800
Hervé Andorre
Hervé Andorre
Hervé Andorre
Sale of shares
Sale of shares
Sale of shares
152.0000
161.0000
156.1390
120
530
500
Charles Edelstenne
Acquisition of shares
148.0000
12,000
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.8734
11,500
Thibault de Tersant
Sale of shares
147.1892
10,000
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.9940
11,500
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.9670
11,500
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.8596
11,500
Legal entity related to Charles Edelstenne (GIMD)
Assignment of put options
3.9250
11,500
From a general perspective, Mr. Bernard Charlès retains the Dassault Systèmes’ shares acquired either, if applicable, from the
exercise of share subscription options or, at the end of the vesting period for the allocated shares. Thus, in 2020, Mr. Bernard
Charlès retained the 300,000 shares acquired in May 2020 (granted in 2017).
On December 31, 2019, he held 3,990,441 shares, representing 1.51% of Dassault Systèmes’ share capital.
On December 31, 2020, Mr. Bernard Charlès held 4,290,441 shares, representing 1.62% of Dassault Systèmes’ share capital.
235
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Transactions in Dassault Systèmes shares by the Management of Dassault Systèmes
TRANSACTIONS CARRIED OUT BY GIMD, A LEGAL ENTITY RELATED TO CHARLES EDELSTENNE, CHAIRMAN OF THE
BOARD OF DIRECTORS, AND TO MARIE-HÉLÈNE HABERT-DASSAULT, DIRECTOR
Nature of the transaction
Assignment of put options
Assignment of put options
Unit price
(in euros)
Volume
3.1740
10,500
3.6420
10,500
Acquisition of shares
154.6533
30,000
Assignment of put options
Assignment of put options
Assignment of put options
Assignment of put options
3.6120
10,500
3.6100
10,500
4.1317
10,500
3.8475
11,000
Acquisition of shares
144.2810
30,000
Assignment of put options
3.7130
11,000
Acquisition of shares
142.1990
20,000
Assignment of put options
3.7932
11,000
Acquisition of shares
Acquisition of shares
Acquisition of put options
Assignment of put options
Assignment of put options
Assignment of put options
Assignment of put options
Acquisition of put options
Assignment of put options
Assignment of put options
Assignment of put options
Assignment of put options
Assignment of put options
Assignment of put options
139.5050
10,000
132.9697
60,000
3.0187
11,000
7.7000
11,000
4.8750
11,000
6.0300
11,000
9.0300
10,500
5.9000
10,500
6.8400
10,500
3.8734
11,500
3.9940
11,500
3.9670
3.8596
11,500
11,500
3.9250
11,500
Date
Place
02/14/2020
OTC
02/17/2020
OTC
02/18/2020
Euronext Paris
02/18/2020
OTC
02/21/2020
OTC
02/25/2020
OTC
02/27/2020
OTC
02/28/2020
Euronext Paris
03/03/2020
OTC
03/04/2020
Euronext Paris
03/05/2020
OTC
03/06/2020
Euronext Paris
03/11/2020
Euronext Paris
05/06/2020
OTC
05/06/2020
OTC
05/11/2020
OTC
05/13/2020
OTC
05/18/2020
OTC
05/18/2020
OTC
05/20/2020
OTC
10/26/2020
OTC
10/27/2020
OTC
10/28/2020
OTC
10/29/2020
10/30/2020
OTC
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Corporate governance
Declarations regarding the administrative and management bodies
5
5.4
Information on the 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
Thierry Leroux, whose first mandate began on June 8, 2005
and was renewed on May 23, 2017 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, 2022.
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 Nour-Eddine Zanouda, whose first mandate began on
May 27, 2010 and was renewed on May 26, 2016 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, 2021.
Deputy Statutory Auditors
The company Auditex, whose registered office is at 1/2, place
des Saisons – 92400 Courbevoie – Paris La-Défense 1, whose
mandate was renewed on May 26, 2016, will expire at the
General Meeting of Shareholders approving the financial
statements for the fiscal year ending on December 31, 2021.
Statutory Auditors’ fees and services
See Note 27 to the consolidated financial statements.
5.5 Declarations regarding the administrative
and management bodies
To Dassault Systèmes SE’s knowledge:
} there is no family relationship between the directors, or
between a director and an executive (see paragraph 5.1.2
above for the list of members) with the exception of
Ms. Marie-Hélène Habert-Dassault and her sister-in-law
Ms. Catherine Dassault;
} in the past five years, none of the directors or executives of
Dassault Systèmes:
} has been convicted of fraudulent offences,
} has been affected by the bankruptcy, receivership,
liquidations or placing under administration of a company,
having been a member of an administrative management
or supervisory body,
} has been subject to an official accusation and/or
sanctions by statutory or regulatory authorities (including
designated professional bodies), or
} has been disqualified by a court from acting as a member
of the administrative, management or supervisory bodies
of an issuer, or from acting in the management or conduct
of the affairs of any issuer;
} there are no potential conflicts of interest between the
duties to the Company of the executive and their private
interests and/or other duties, and no director or executive
of Dassault Systèmes 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;
} no director or executive of Dassault Systèmes is party to a
service contract with Dassault Systèmes SE, or one of its
subsidiaries, which provides him or her with a personal
benefit.
237
DASSAULT SYSTÈMES ANNUAL REPORT 20205 238
ANNUAL REPORT 2020 DASSAULT SYSTÈMES 6
INFORMATION ABOUT
DASSAULT SYSTÈMES SE, THE
SHARE CAPITAL AND THE
OWNERSHIP STRUCTURE
6.1 Information about
Dassault Systèmes SE
6.1.1 General Information
6.1.2 Memorandum and Specific By-Laws Provisions
6.2 Information about
the Share Capital
6.2.1 Share Capital as of February 28, 2021
6.2.2 Potential Share Capital
6.2.3 Changes in Dassault Systèmes SE Share Capital
over the Past Three Years
6.2.4 Share Buyback Programs
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6.3 Information about
the shareholders
6.3.1 Shareholder Base and Double Voting Rights
6.3.2 Controlling shareholder
6.3.3 Shareholder Agreements
6.4 Stock Market Information
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DASSAULT SYSTÈMES ANNUAL REPORT 2020CONTENTS 6 Information about Dassault Systèmes SE, the share capital and the ownership structure
Information about Dassault Systèmes SE
6.1
Information about Dassault Systèmes SE
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
Website: www.3ds.com. It is specified that the information
on Dassault Systèmes’ website is not part of this Annual
Report, with the exception of those expressly incorporated by
reference in this Annual Report. As such, this information has
not been reviewed or approved by the AMF.
6.1.1.2
Legal form – Applicable Law – Place
of Registration and Registration
Number – APE Code
Dassault Systèmes SE is a European company (Societas
Europaea) incorporated and registered under French law, with
a Board of Directors, governed by the provisions of Council
Regulation (EC) no. 2157/2001 as well as by French legislative
and regulatory provisions in force at any time (hereinafter the
“Law”). It is registered with the Versailles trade and companies
registry under number 322 306 440. Its APE code is 5829 C.
Its LEI code is: 96950065LBWY0APQIM86.
6.1.1.3 Date of Incorporation and Term
Dassault Systèmes SE was incorporated on June 9, 1981 as
a limited liability company (société à responsabilité limitée)
for a 99-year term starting on the date of its registration,
until August 4, 2080. It was transformed into a public limited
liability company (société anonyme) on April 8, 1993 and then
into a European company (Societas Europaea) on June 15,
2015.
6.1.1.4
Corporate Purpose
Pursuant to Article 2 of its by-laws, Dassault Systèmes SE’s
corporate purpose, in France and abroad, is:
} the design, development, production, marketing, purchase,
sale, brokerage, rental, maintenance and the provision
of after-sale services of software, digital content and/or
computer hardware;
} the supply and provision of services of data centers, including
the supply of online software services as a service and the
operation and supply of the corresponding infrastructures;
} the supply and provision of services to users notably in the
area of training, demonstration, methodology, display and
utilization; and
} the supply and sale of computer resources, together or
separate from the supply or sale of software or services,
notably in the areas of 3D design, modeling, simulation,
manufacturing, planning, collaboration, lifecycle management,
business intelligence, marketing or consumer 3D solutions in
the domains of products, nature and life.
The purpose of Dassault Systèmes SE shall also be:
} the creation, acquisition,
rental and management-
lease of any on-going business, signing leases, and the
establishment and operation of any facilities;
} the acquisition, operation or sale of any industrial or
intellectual property rights as well as any know-how in the
field of computers;
} and 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 and commercial,
personal or real property transactions 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.
6.1.1.6
Branches, Secondary establishments
Dassault Systèmes SE has no branch. Dassault Systèmes SE
has 15 secondary establishments as of February 28, 2021,
located at the following addresses:
} 8 rue de Mayencin, 38400 Saint-Martin-d’Hères ;
} 5C Route de Saint-Laurent, 76480 Saint-Romain-de-
Colbosc ;
} 76 Route de la Demi-Lune – Les collines de l’Arche, Le
Madeleine Puteaux, 92057 Paris La Défense ;
} ZAC du Bois de Côtes – 304 Route National 6, 69760
Limonest ;
} 5 rue de l’Halbrane – Technocampus Océan – ZAC Croix
Rouge, 44340 Bouguenais ;
} 15 rue Claude Chappe, bâtiment B – Zac des Champs blancs,
35510 Cesson-Sevigné ;
} Rue Evariste Galois – ZAC St-Philippe II, lot 24 – Quartier
des Lucioles, 06410 Biot ;
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} 10 Place de la Madeleine, 75008 Paris ;
6.1.1.7 Documents on Display
} 20 Boulevard Eugène Deruelle, bâtiment A – Immeuble Le
Britannia, 69003 Lyon ;
} 35 rue Haroun Tazieff – Immeuble Ecoparc Océnais 1 B,
54320 Maxéville ;
} 53 avenue de l’Europe, 13090 Aix-en-Provence ;
} 1-3 rue Jeanne Braconnier – Immeuble Terre Europa, 92360
Meudon ;
} 120 rue René Descartes, 29280 Plouzané ;
} 37 Chemin des Ramassiers – ZAC des Ramassiers, 31770
Colomiers ;
} 1 Allée Lavoisier, 59650 Villeneuve d’Ascq.
Dassault Systèmes SE’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 SE’s
registered office.
Some of these documents are also available on Dassault
Systèmes’ website (https://investor.3ds.com/).
6.1.2 Memorandum and Specific By-Laws Provisions
The by-laws of Dassault Systèmes SE were last amended in
May 2020.
6.1.2.1 Allocation of Profits
(Article 36 of the 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. An amount 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 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”).
6.1.2.2 General Meetings
Notice and agenda of meeting
(Articles 25 and 26 of the by-laws)
General Meetings are convened by the Board of Directors or,
if the Board of Directors fails to convene a General Meeting,
by the Statutory Auditor(s). One or more shareholders who
together hold at least 10% of the subscribed capital may also
request the Board of Directors to call such General Meetings
and set the agenda thereof. The request to convene the
meeting shall set out the items to be put on the agenda.
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 fifteen 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 the Law.
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Conditions for admission (Article 27 of the by-laws)
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:
Actions required to amend shareholders’ rights
(Articles 13, 31 and 32 of the by-laws)
Only an Extraordinary General Meeting can amend shareholders’
rights in compliance with the provisions of the Law.
} for holders of registered shares, that they are held in
a registered account (directly or through a financial
intermediary) at 0:00 am (Paris time) on the second
business day preceding the Meeting;
} for holders of shares in bearer form, that they are recorded
in a bearer securities account maintained by the accredited
intermediary at 0:00 am (Paris time) on the second business
day preceding the Meeting.
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
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 SE 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 any natural or legal
person who has been appointed as proxy, under the conditions
provided by 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 the provisions of the Law. 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 videoconference 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 provided for by Law. Such
shareholder will be accounted for in calculating the quorum
and the results of voting.
Except as may be otherwise provided for under the provisions
of the 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 an 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 shares (Articles 13, 29 and 39 of the by-laws)
All the shares are of the same class and carry, under the
Dassault Systèmes SE’s by-laws, the same rights to the
allocation 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 by-Laws)”). However, a double voting right
is awarded 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
by-laws)” below).
Conditions for exercising voting rights
(Articles 11 and 29 of the 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
videoconference or by any other means of communication, as
indicated in the preceding paragraph. For the calculation of the
majority, the votes cast shall not include votes attaching to
shares in respect of which the shareholder has not taken part
in the vote or has returned a blank or spoilt ballot paper.
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).
Double voting rights (Article 29 of the 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,
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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.
6.1.2.5
Terms in the by-laws, a charter or
regulation of Dassault Systèmes SE
which could delay, postpone or
prevent a change in control
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 SE shares except in the
event of stripping of the ownership of the shares (see paragraph
“Conditions for exercising voting rights (Articles 11 and 29 of
the by-laws)” above).
6.1.2.4 Declarations concerning crossing
of the ownership thresholds
(Article 13 of the by-laws)
legal obligation to
In addition to the
inform Dassault
Systèmes SE and the Financial Markets Authority (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 SE’s share capital or voting
rights, or a multiple thereof up to 50%, must inform Dassault
Systèmes SE of the total number of shares or voting rights it
holds. This information must be sent to Dassault Systèmes SE
by registered letter with return receipt requested, within four
trading days following the date of acquisition or disposal of
the shares.
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 disposals occurred.
In the event of non-compliance with 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 SE 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.
than
the aforementioned double voting
Other
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-Laws)”),
Article 10 of the by-laws provides that Dassault Systèmes SE
may, at any time and in compliance with the provisions of the
Law, request that a central depositary maintaining its share
register provides it with 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 SE shares in bearer
form which grant, immediately or over time, the right to vote
at general meetings of shareholders, 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 by-laws concerning
modifications in share capital which
are more restrictive than the Law
The by-laws of Dassault Systèmes SE do not contain any
provisions governing changes in share capital which are more
restrictive than those provided by Law.
6.1.2.7
Terms in the by-laws concerning
the directors and members
of the Executive Committee
(Articles 14, 15 and 19 of the by-laws)
Dassault Systèmes SE is administrated by a Board of Directors
established in accordance with the Law. Directors shall be
appointed for four years, renewed or revoked by shareholders
at an Ordinary General Meeting. The number of directors aged
seventy or over cannot exceed half the members of the Board
of Directors at any time. The Board of Directors also includes
two directors representing employees, appointed by each
of the two trade union organizations that have obtained the
highest number of votes in the first round of the Social and
Economic Committee members in the Company and its direct
or indirect subsidiaries whose registered office is located on
French territory.
From among its individual members, the Board of Directors
shall elect a Chairman who may not be more than eighty-five
years of age, and set his or her term of office. The Chairman
shall organize and supervise the work of the Board of Directors
and reports on the same at the shareholders General Meeting,
and shall watch over the running of the corporate bodies
of the Company. The Board of Directors may also elect a
Vice- Chairman who will serve as Chairman on an interim
basis, in the case of (i) a temporary incapacity or death of the
Chairman or (ii) an absence or unavailability of the Chairman
to preside over a meeting of the Board of Directors.
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Depending on the decision of the Board of Directors,
the general management of the Company shall be undertaken
either by the Chairman of the Board of Directors or by another
individual appointed by the Board of Directors and who shall
take the title of Chief Executive Officer. The Chief Executive
Officer may not be more than seventy-five years old. The Chief
Executive Officer shall be vested with the broadest powers
to act under any circumstance on behalf of the Company.
He or she shall exercise these powers within the limits of
the corporate purpose and subject to the powers expressly
attributed by Law to shareholders meetings and the Board of
Directors. The Chief Executive Officer represents the Company
in its relations with third parties. The Chief Executive Officer
may be dismissed at any time by the Board of Directors. If
dismissal is without cause, costs for damages and related
interest may arise, unless the Chief Executive Officer is also
Chairman of the Board of Directors.
6.2
Information about the Share Capital
6.2.1 Share Capital as of February 28, 2021
As of February 28, 2021, Dassault Systèmes SE’s share capital was composed of 265,422,264 fully paid-up shares with a par
value of €0.50 each. As of December 31, 2020, its share capital was €132,568,118.50, divided into 265,136,237 shares.
6.2.2 Potential Share Capital
As of February 28, 2021, outstanding share subscription
options, whether or not exercisable, would, if all were
exercised, result in the issuance of 6,269,566 new shares,
representing 2.31% of Dassault Systèmes’ share capital at
that date (on a diluted basis).
time. As of December 31, 2020, and as of February 28, 2021,
SW Securities LLC held 503,614 shares, or approximately
0.19% of share capital on February 28, 2021. Similar to
treasury shares, the shares held by SW Securities LLC do not
carry voting rights and are not eligible for dividends.
On the same date, based on the closing price of its shares
on February 28, 2021 (€171.90 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 2,611,661 new shares, representing 0.97% of the Dassault
Systèmes SE’s share capital at that date (on a diluted basis).
The dilutive effect per share at December 31, 2020 is also set
forth in Note 11 to the consolidated financial statements.
In connection with the acquisition of SolidWorks in 1997,
Dassault Systèmes SE issued shares to the holders of share
subscription options and warrants issued by SolidWorks prior
to this acquisition. These Dassault Systèmes shares have
historically been held by Dassault Systèmes' wholly-owned
U.S. subsidiary, SW Securities LLC. No other SolidWorks share
subscription options or warrants remain outstanding at this
Other than the share subscription options granted in connection
with stock option plans and performance share grants as
described in paragraph 5.1.4 “Summary of the Compensation
and Benefits due to Corporate Officers (mandataires sociaux)”
and paragraph 5.1.5 “Interests of Executive Management and
Employees in the Share Capital of Dassault Systèmes SE”,
there are no other securities giving right to subscribe shares
of Dassault Systèmes, and there is no agreement which could
result in a capital increase.
Pledge 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 February 28, 2021.
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6.2.3 Changes in Dassault Systèmes SE Share Capital over
the Past Three Years
Date
Nominal amount of
changes in share
capital (in euros)
Amount of share
capital (in euros)
Number of
shares created
or canceled
Total number of
shares
Transaction
February 28,
2018
Capital increase resulting from the exercise
of share subscription options
March 15, 2018
Share capital reduction through cancellation
of treasury shares
June 14, 2018
February 28,
2019
February 29,
2020
February 28,
2021
Capital increase by a dividend payment in
shares
Capital increase resulting from the exercise
of share subscription options
Capital increase resulting from the exercise
of share subscription options
Capital increase resulting from the exercise
of share subscription options
1,020,798
130,614,821.50
2,041,596
261,229,643
(361,528.50)
130,253,293
(723,057)
260,506,586
517,271.50
130,770,564.50
1,034,543
261,541,129
693,419.50
131,463,984
1,386,839
262,927,968
663,175.50
132,127,159.50
1,326,351
264,254,319
583,972.50
132,711,132
1,167,945
265,422,264
The changes in equity resulting from the transaction through December 31, 2020 set forth above are included in the “Consolidated
Statements of shareholders’ Equity” in the consolidated financial statements.
6.2.4 Share Buyback Programs
6.2.4.1
Transactions carried out by Dassault
Systèmes SE in 2020 and early 2021
Transactions carried out by Dassault Systèmes SE
in 2020
During the 2020 fiscal year, Dassault Systèmes SE purchased,
under the authorizations granted to the Board of Directors by
the General Meetings of May 23, 2019, and May 26, 2020
1,199,048 of its own shares (excluding shares acquired
through the liquidity agreement, a report of which is presented
below).
These shares were acquired at an average price of €140.92 per
share, giving a total cost of €168,974,423.23 (excluding tax),
it being specified that 25,092 shares were purchased by
means of blocks traded over the counter at an average price
of €149.69 per share, giving a total cost of €3,756,026.50
(excluding tax). The transaction costs paid by the Company
in connection with these repurchased shares amounted to
€50,917.69 all taxes included to which is added the tax on
financial transactions for an amount of €506,923.27.
These 1,199,048 shares were wholly allocated to the coverage
of Dassault Systèmes SE obligations resulting from share
attributions to the employees of Dassault Systèmes, no shares
having been reallocated for the purpose of cancellation.
The shares repurchased before 2020 were allocated in 2020 to
the following purposes:
} cover Dassault Systèmes SE obligations resulting from share
attributions to the employees of Dassault Systèmes decided
prior to 2020: 3,999,765 shares;
} liquidity agreement entered into with Oddo BHF SCA
mentioned below: 72,979 shares.
Dassault Systèmes SE directly held, on December 31, 2020,
3,556,325 of its own shares (including 62,088 shares through
the liquidity agreement) of a nominal value of €0.50 each,
which had been repurchased at an average price of €126.82,
representing approximately 1.34% of share capital at that
date. Out of these 3,556,325 shares, 3,494,237 shares are at
the disposal of Dassault Systèmes SE and are wholly allocated
to cover the Dassault Systèmes SE‘s obligations resulting from
share attributions to the employees of Dassault Systèmes.
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On January 5, 2015, Dassault Systèmes SE entered into a
liquidity agreement, in accordance with the Code of Ethics of
the AFEI (French association of investment firms) recognized
by the Financial Markets Authority (AMF), with Oddo BHF
SCA implemented from January 7, 2015 for an initial period
ending on December 31, 2015, automatically renewable
for subsequent 12-month terms. This agreement has been
amended on October 26, 2017, in order to, inter alia, increase
the amount of the fees to €70,000 per year and to increase by
€5,000,000 the resources assigned to the liquidity agreement.
On December 13, 2018, an additional contribution of
€5 million has been made, increasing the resources assigned
to the liquidity agreement from €15 million to €20 million.
The agreement was amended on June 18, 2019 in order to
comply with the new requirements of Decision no. 2018-01 of
July 2, 2018 taken by the Financial Markets Authority (AMF).
During fiscal year 2020, 934,946 shares have been purchased
and 945,837 shares have been sold within the framework
of the liquidity agreement. As at December 31, 2020, the
following resources appeared on the liquidity account:
} 62,088 Dassault Systèmes shares; and
} €19,212,711.09 in cash.
During the fiscal year 2020, Dassault Systèmes SE has not
performed any transactions on derivative securities linked
to its shares nor has it purchased or sold any of its shares by
exercising them or through the maturity of such derivative
securities.
Transactions carried out by Dassault Systèmes SE
between January 1 and February 28, 2021
Since the beginning of the fiscal year 2021 and until
February 28, 2021, Dassault Systèmes SE has acquired
99,618 of its own shares within the framework of the share
buyback program.
These shares were purchased at an average price of €171.78
per share, giving a total cost of €17,112,803.63 (excluding
tax). The transaction costs paid by Dassault Systèmes SE
in connection with these repurchased shares amounted
to €5,133.84 (all taxes included) plus the tax on financial
transactions for an amount of €51,338.42.
Since the beginning of the fiscal year 2021 and until
February 28, 2021, Dassault Systèmes SE has acquired
123,427 and has sold 97,000 of its own shares within the
framework of the liquidity agreement.
Since the beginning of the fiscal year 2021 and until
February 28, 2021, Dassault Systèmes SE has not performed
any transactions on derivative securities linked to its shares
nor has it purchased or sold any of its shares by exercising
them or through the maturity of such derivative securities.
6.2.4.2 Description of the Share Buyback
Program Proposed to the General
Meeting on May 26, 2021
Pursuant to Article 241-2 et seq. of the Financial Markets
Authority (AMF) General Regulation and Article L. 451-3 of
246
the French Monetary and Financial Code, and in accordance
with European Regulations, the terms and objectives of the
Dassault Systèmes SE’s share buyback program that will be
submitted for approval at the General Meeting of May 26,
2021, are described below.
Breakdown of treasury shares by purpose as of the
date of this document
As of February 28, 2021, Dassault Systèmes SE held
3,269,152 of its own shares directly and 503,614 indirectly.
These 3,269,152 shares were allocated to the following
objectives:
} coverage of the Dassault Systèmes SE's obligations resulting
from share grants decided in 2018, 2019 and 2020:
3,180,637 shares;
} cancellation: 0 share; and
} liquidity agreement signed with Oddo BHF SCA on
January 5, 2015, updated on June 18, 2019: 88,515 shares.
Purposes of the new repurchase program
1) Cancel shares in order to increase the return on equity and
earnings per share.
2) Meet obligations related to stock option grants or other
allocations of shares to employees or corporate officers of
Dassault Systèmes SE or of an affiliated company.
3) Provide shares upon exercise of rights attached to equities
giving right to shares of Dassault Systèmes SE.
4) Stimulate the market or provide liquidity for the Dassault
Systèmes SE’s shares through the intermediary of an
investment services provider by means of a liquidity
contract complying with the Decision no. 2018-01 of
July 2, 2018 taken by the Financial Markets Authority
(AMF).
5) Carry out any market practice, which may be authorized by
the Law or by the Financial Markets Authority (AMF).
6) Deliver shares
the context of external growth
transactions, in particular through mergers, demergers,
partial demergers or contributions in kind.
in
The purposes 1 to 3 above comply with the terms of
paragraph 2, Article 5 of the European Regulation no.
596/2014 dated April 16, 2014, and the purpose 4 complies
with the Decision no. 2018-01 of July 2, 2018 taken by the
Financial Markets Authority (AMF). The purpose 5 complies
with provisions of the Article 13 of the European Regulation
no. 596/2014 dated April 16, 2014. The purpose 6, unlike
the other aforementioned purposes, does not benefit from
a presumption of legitimacy, but it is in the interest of
the Company to have such a possibility also referred to in
Article L. 22-10-62 of the French Commercial Code.
The General Meeting of May 26, 2021 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 buyback program and to carry out
the corresponding reduction in share capital.
ANNUAL REPORT 2020 DASSAULT SYSTÈMES Information about Dassault Systèmes SE, the share capital and the ownership structure
Information about the shareholders
6
Maximum amount allocated to the share buyback
program, maximum number and characteristics of
the securities that Dassault Systèmes SE proposes
to acquire and maximum purchase price
The Board of Directors is authorized to repurchase Dassault
Systèmes shares representing up to 5 million shares (subject to
potential adjustment to take into account a five-for-one stock
split of the Dassault Systèmes' shares). The maximum amount
of the funds used for the purpose of buying back shares is set
at €800 million.
Duration of the share buyback program
The program would last about 12 months, starting on
the General Meeting of May 26, 2021. This authorization
should be valid until the Ordinary General Meeting
approving the financial statements for the fiscal year ending
December 31, 2021.
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 SE’s shareholder base over the last three
fiscal years. Pursuant to the Financial Markets Authority
(AMF) Position/Recommendation no. 2021-02, it specifies:
} 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 General
Regulation of the Financial Markets Authority (AMF) 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
} the voting rights that can be exercised at the General
Meeting or “net” voting rights, not taking into account
shares without voting rights.
Double voting rights are attributed to all fully paid-up shares
held in registered form for at least two consecutive years in
the name of the same holder.
The major shareholders of Dassault Systèmes SE do not hold
voting rights, which are different from voting rights of other
shareholders (such as double voting rights).
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Information about the shareholders
Shareholders
As of December 31, 2020
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
107,089,968
40.39% 214,019,936
53.90%
214,019,936
Charles Edelstenne(1)
Bernard Charlès
Treasury shares(2)
Indirect treasury shares(3)
15,897,485
4,290,441
3,556,325(2)
503,614
Directors and senior management(4)
1,859,013
6.00%
31,692,070
1.62%5)
8,130,882
1.34%
0.19%
0.70%
3,556,325
503,614
3,395,817
7.98%
2.05%(5)
0.89%
0.13%
0.85%
31,692,070
8,130,882
-
-
3,395,817
Public
TOTAL
As of December 31, 2019
131,939,391
265,136,237
49.76% 135,805,717
34.20%
135,805,717
100% 397,104,361
100%
393,044,422
Groupe Industriel Marcel Dassault
106,929,968
40.50% 213,290,297
54.12%
213,290,297
Charles Edelstenne(1)
Bernard Charlès
Treasury shares(2)
Indirect treasury shares(3)
15,819,585
3,990,441
4,072,744(2)
503,614
Directors and senior management(4)
1,663,430
5.99%
31,558,679
1.51%(5)
7,280,882
1.54%
0.19%
0.63%
4,072,744
503,614
2,796,081
8.01%
1.85%(5)
1.03%
0.13%
0.71%
31,558,679
7,280,882
–
–
2,796,081
Public
TOTAL
As of December 31, 2018
131,058,219
264,038,001
49.64% 134,589,772
34.15%
134,594,115
100% 394,092,069
100%
389,520,054
Groupe Industriel Marcel Dassault
106,929,968
40.70% 212,887,614
54.44%
212,887,614
Charles Edelstenne(1)
Bernard Charlès
Treasury shares(2)
Indirect treasury shares(3)
15,794,585
3,840,441
3,620,758(2)
503,614
Directors and senior management(4)
1,617,539
6.01%
31,475,119
1.46%(5)
6,730,882
1.38%
0.19%
0.62%
3,620,758
503,614
2,301,056
8.05%
1.72%(5)
0.93%
0.13%
0.59%
31,475,119
6,730,882
–
–
2,301,056
Public
TOTAL
130,426,036
262,732,941
49.64% 133,510,919
34.14%
133,510,919
100% 391,029,962
100%
386,905,590
54.45%
8.06%
2.07%(5)
–
–
0.87%
34.55%
100%
54.76%
8.10%
1.87%(5)
–
–
0.72%
34,55%
100%
55.02%
8.14%
1.74%(5)
–
–
0.59%
34.51%
100%
(1) Including shares held in trust for the benefit of his family and managed by Mr. Edelstenne.
At December 31, 2020, Mr. Edelstenne held 4,278,058 shares with all ownership rights and 3,382 shares through two family companies which he manages, representing a total
of 1.61% of the capital and 2.15% of the exercisable voting rights, as well as 11,616,045 shares with “beneficiary” rights (usufruit). For the usage rights with respect to these
11,616,045 shares, representing 5.91% of the exercisable voting rights, Mr. Edelstenne can only exercise the right to vote on decisions of the General Meeting of Shareholders
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.
For details related to Mr. Edelstenne’s shareholding as of December 31, 2019 and December 31, 2018, see paragraph 6.3.1. of Annual Reports for 2019 and 2018 respectively.
(2) Including 62,088 shares through the liquidity agreement as of December 31, 2020. As of December 31, 2019, such number was 72,979 shares.
(3) SW Securities LLC. This company is a Dassault Systèmes’ subsidiary, the Dassault Systèmes’ shares held by it do not have voting rights.
(4) Excluding Mr. Edelstenne and Mr. Charlès, management includes the officers listed in paragraph 5.1.2 “Executives of Dassault Systèmes”.
(5) For further information, see Table 5 of paragraph 5.1.4 “Summary of the Compensation and Benefits due to Corporate Officers (mandataires sociaux)”.
The overall number of voting rights amounted to 397,104,361
as at December 31, 2020 (the number of exercisable voting
rights was 393,044,422) and, as at February 28, 2021,
to 397,252,907 (with the number of exercisable voting rights
amounting to 393,555,630). The difference between the
number of theoretical and exercisable voting rights is explained
by the treasury shares and shares controlled.
Investment Management
MFS
(MFS) notified Dassault
Systèmes SE that as of September 17, 2015 the funds
managed by companies within its group held more than 2.5%
of the share capital.
BlackRock, Inc. further advised Dassault Systèmes SE that,
as of September 4, 2019, it held more than 2.5% of the
Company’s share capital.
No other shareholders, except as indicated above, declared
holding 2.5% (threshold set forth in 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, 2020, based on shareholders’ obligations.
Although Dassault Systèmes SE 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
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Information about the shareholders
6
“Stock Market Information”). On February 28, 2021, there
were 5,744,012 American Depositary Shares
(“ADS”)
outstanding and the number of recorded ADS holders, holding
them either for themselves or for third parties amounted to 43.
under previous buybacks. These 3,180,637 shares represent
approximately 1.20% of the share capital as at February 28,
2021, with no voting rights or dividend rights being attached
to these shares.
In December 2020, Dassault Systèmes SE commissioned a
survey on the composition of its shareholder base from an
external specialized services provider. According to this survey,
institutional investors holding more than 2,000 shares each
numbered 665 and held 42.7% of the Dassault Systèmes SE
share capital as at December 31, 2020.
As at February 28, 2021, Dassault Systèmes SE held
88,515 shares under the liquidity agreement entered into
with Oddo BHF SCA and 3,180,637 treasury shares. Of these
3,180,637 treasury shares, 531,847 shares were bought back
during the buyback program adopted by the General Meeting
of May 26, 2020 and the remainder, i.e. 2,648,790 shares,
At December 31, 2020, 137,718,205 Dassault Systèmes
shares (i.e. approximately 51.94% of the capital) are held
in registered form, providing entitlement to 265,689,368
exercisable voting rights (i.e. approximately 66.91% 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
employees through the corporate savings plan (plan d'épargne
d'entreprise) was 474,245 shares at December 31, 2020,
or approximately 0.18% of the total number of shares at that
date (i.e. 265,136,237 outstanding shares).
6.3.2 Controlling shareholder
Groupe Industriel Marcel Dassault (GIMD) is the principal
shareholder of Dassault Systèmes SE with, as of December 31,
2020, 40.39% of the share capital and 54.45% of the
exercisable voting rights (i.e. 53.90% of theoretical voting
rights). With more than 50% of the voting rights of Dassault
Systèmes SE, GIMD controls Dassault Systèmes. GIMD
belongs to the Dassault family.
The Board of Directors of Dassault Systèmes SE has been
made up of 50% of independent directors since May 26,
2020(1), i.e. a proportion exceeding the requirement stipulated
in the AFEP-MEDEF Code for controlled companies. All the
Committees under the Board (Audit Committee, Compensation
and Nomination Committee and Scientific Committee) are
wholly made up of independent directors, as a guarantee of
a balanced exercise of control by GIMD as prescribed by the
AMF General Regulation.
As GIMD possesses more than one third but less than half of
the shares and more than half of the voting rights in Dassault
Systèmes SE, 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 Financial Markets Authority
(AMF) General Regulation, which the latter can grant at
its discretion.
(1) Directors who represent employees are not taken into account for the calculation of the number of independent directors, in compliance with the
recommendations of the AFEP-MEDEF Code.
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Information about the shareholders
6.3.3 Shareholder Agreements
In 2011, 2013, 2014, 2015, 2017, 2018, 2019 and 2020, Dassault Systèmes was informed about collective undertakings
concluded concerning the holding of shares whose characteristics are summarized in the tables hereafter in accordance with
Financial Markets Authority (AMF) Position/Recommendation no. 2021-02.
Collective undertakings concluded in 2020
System
Date of signing
Duration of collective undertakings
Article 787 B of the French Tax Code
Article 787 B of the French Tax Code
May 6, 2020
At least two years
November 6, 2020
At least two years
Contractual duration of the agreement
Undetermined with cases of termination
Undetermined 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)
23.95% of the share capital
24.00% of the share capital
Names of the signatories having the capacity of
executives(1)
Mr. Charles Edelstenne
Mr. Bernard Charlès
Mr. Charles Edelstenne
Mr. Bernard Charlès
Name(s) of the signatory(ies) having close links with
executives
Groupe Industriel Marcel Dassault
Groupe Industriel Marcel Dassault
Names of the signatories holding at least 5% of the
capital and/or voting rights of Dassault Systèmes SE
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and beneficiaries(2)
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and beneficiaries(2)
(1) Pursuant to Article 975 III, 1, 1° of the French Tax Code.
(2) See Note 1 under the table of paragraph 6.3.1 “Shareholder Base and Double Voting Rights”.
Collective undertakings concluded in 2019
System
Date of signing
Duration of collective
undertakings
Article 787 B of the French Tax
Code
Article 787 B of the French Tax
Code
Article 787 B of the French Tax
Code
January 21, 2019
At least two years
September 2, 2019
At least two years
September 2, 2019
At least two years
Contractual duration of the
agreement
Undetermined with cases of
termination
Undetermined with cases of
termination
Undetermined with cases of
termination
Conditions for renewal
No specific conditions stipulated No specific conditions stipulated No specific conditions stipulated
Capital and voting rights %
concerned by the agreement
(at its date of execution)
24.10% of share capital
27.79% of the share capital
29.98% of the share capital
Names of the signatories having
the capacity of executives(1)
Mr. Charles Edelstenne
Mr. Bernard Charlès
Mr. Charles Edelstenne
Mr. Bernard Charlès
Mr. Charles Edelstenne
Mr. Bernard Charlès
Name(s) of the signatory(ies)
having close links with executives
Names of the signatories holding
at least 5% of the capital and/or
voting rights of Dassault
Systèmes SE
Groupe Industriel Marcel Dassault Groupe Industriel Marcel Dassault Groupe Industriel Marcel Dassault
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and
beneficiaries(2)
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and
beneficiaries(2)
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and
beneficiaries(2)
(1) Pursuant Article 975 III, 1, 1° of the French Tax Code.
(2) See Note 1 under the table of paragraph 6.3.1 “Shareholder Base and Double Voting Rights”.
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Collective undertaking concluded in 2018
System
Date of signing
Duration of collective undertakings
Contractual duration of the agreement
Conditions for renewal
Capital and voting rights % concerned by the agreement (at its date of
execution)
Names of the signatories having the capacity of executives(1)
Article 787 B of the French Tax Code
April 24, 2018
At least two years
Undetermined with cases of termination
No specific conditions stipulated
24.30% of the share capital
Mr. Charles Edelstenne
Mr. Bernard Charlès
Name(s) of the signatory(ies) having close links with executives
Groupe Industriel Marcel Dassault
Names of the signatories holding at least 5% of the capital and/or
voting rights of Dassault Systèmes SE
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and beneficiaries(2)
(1) Pursuant to Article 975 III, 1, 1° of the French Tax Code.
(2) See Note 1 under the table of paragraph 6.3.1 “Shareholder Base and Double Voting Rights”.
Collective undertakings concluded in 2017
System
Date of signing
Duration of collective undertakings
Contractual duration of the agreement
Conditions for renewal
Capital and voting rights % concerned by the agreement (at its date of
execution)
Names of the signatories having the capacity of executives(1)
Article 787 B of the French Tax Code
March 30, 2017
At least two years
Undetermined with cases of termination
No specific conditions stipulated
24.52% of the share capital
Mr. Charles Edelstenne
Mr. Bernard Charlès
Name(s) of the signatory(ies) having close links with executives
Groupe Industriel Marcel Dassault
Names of the signatories holding at least 5% of the capital and/or
voting rights of Dassault Systèmes SE
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and beneficiaries(2)
(1) Pursuant to Article 885 O bis of the French Tax Code, now Article 975 III, 1, 1° of the French Tax Code.
(2) See Note 1 under the table of paragraph 6.3.1 “Shareholder Base and Double Voting Rights”.
Collective undertakings concluded in 2015
System
Date of signing
Duration of collective undertakings
Article 787 B of the French Tax Code
Article 787 B of the French Tax Code
December 17, 2015
At least two years
December 17, 2015
At least two years
Contractual duration of the agreement
Undetermined with cases of termination
Undetermined 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)
24.85% of the share capital
24.66% of the share capital
Names of the signatories having the capacity of
executives(1)
Mr. Charles Edelstenne
Mr. Bernard Charlès
Mr. Charles Edelstenne
Mr. Bernard Charlès
Name(s) of the signatory(ies) having close links with
executives
Groupe Industriel Marcel Dassault
Groupe Industriel Marcel Dassault
Names of the signatories holding at least 5% of the
capital and/or voting rights of Dassault Systèmes SE
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and beneficiaries(2)
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and beneficiaries(2)
(1) Pursuant to Article 885 O bis of the French Tax Code.
(2) See Note 1 under the table of paragraph 6.3.1 “Shareholder Base and Double Voting Rights”.
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Information about the shareholders
Collective undertakings concluded in 2014
System
Date of signing
Duration of collective undertakings
Article 787 B of the French Tax Code
Article 787 B of the French Tax Code
February 27, 2014
At least two years
December 16 and 17, 2014
At least two years
Contractual duration of the agreement
Undetermined with cases of termination
Undetermined 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)
25.0% of the share capital
24.7% of the share capital
Names of the signatories having the capacity of
executives(1)
Mr. Charles Edelstenne
Mr. Bernard Charlès
Mr. Charles Edelstenne
Mr. Bernard Charlès
Name(s) of the signatory(ies) having close links with
executives
Groupe Industriel Marcel Dassault
Groupe Industriel Marcel Dassault
Names of the signatories holding at least 5% of the
capital and/or voting rights of Dassault Systèmes SE
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and beneficiaries(2)
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and beneficiaries(2)
(1) Pursuant to Article 885 O bis of the French Tax Code.
(2) See Note 1 under the table of paragraph 6.3.1 “Shareholder Base and Double Voting Rights”.
System
Date of signing
Duration of collective undertakings
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
July 11, 2011
At least two years
October 29, 2013
At least two years
Contractual duration of the agreement
Undetermined with cases of termination
Undetermined 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
28.2% of the share capital
Names of the signatories having the capacity of
executives(1)
Mr. Charles Edelstenne
Mr. Bernard Charlès
Mr. Charles Edelstenne
Mr. Bernard Charlès
Name(s) of the signatory(ies) having close links with
executives
Groupe Industriel Marcel Dassault
Groupe Industriel Marcel Dassault
Names of the signatories holding at least 5% of the
capital and/or voting rights of Dassault Systèmes SE
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and beneficiaries(2)
Groupe Industriel Marcel Dassault
Mr. Charles Edelstenne and beneficiaries(2)
(1) Pursuant to Article 885 O bis of the French Tax Code.
(2) See Note 1 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.
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Stock Market Information
6
6.4 Stock Market Information
Stock Exchange
Shares of Dassault Systèmes have been listed on Compartment
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
“Shareholder base 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 of May 26, 2021”.
Share price history and trading volumes of Dassault Systèmes shares from January 1, 2020
(in euros except for Volume of shares traded)
January 2020
February 2020
March 2020
April 2020
May 2020
June 2020
July 2020
August 2020
September 2020
October 2020
November 2020
December 2020
January 2021
February 2021
Volume of
shares traded
6,842,977
9,291,184
17,251,114
6,687,154
5,376,675
6,625,161
6,761,770
4,012,750
4,715,528
6,723,474
6,963,341
5,315,861
5,074,721
6,060,805
Share price on
last day of
the month
Highest share
price during
the month
Lowest share
price during
the month
€156.70
€142.00
€135.00
€133.55
€152.25
€153.60
€154.10
€157.85
€159.75
€146.55
€155.05
€166.15
€164.75
€171.90
€163.95
€159.75
€143.70
€141.00
€152.25
€153.60
€162.40
€158.95
€161.55
€162.15
€158.55
€167.80
€169.15
€190.25
€147.30
€142.00
€108.25
€118.75
€131.90
€146.60
€145.80
€150.35
€152.10
€145.55
€145.45
€152.15
€160.40
€167.75
Person Responsible for Financial Communications
François-José Bordonado
Vice-President, Investor Relations
Indicative Timetable for the Publication of Financial
Information for 2021
} First quarter of 2021: April 28, 2021
To obtain all financial information and documents published
by Dassault Systèmes SE, please contact:
} Second quarter of 2021: July 27, 2021
} Third quarter of 2021: October 28, 2021
} Fourth quarter of 2021: February 3, 2022
Investor Relations Service
10, rue Marcel Dassault – CS 40501
78946 Vélizy-Villacoublay Cedex – France
Telephone: +33 (0)1 61 62 69 24
e-mail: investors@3ds.com
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES 7
GENERAL
MEETING
7.1 Presentation of the Resolutions
Proposed by the Board of
Directors to the General
Meeting of May 26, 2021
7.1.1 Annual Financial Statements and Allocation of
the Results
7.1.2
Consolidated financial statements
7.1.3 Related-party agreements
256
256
257
257
7.1.4
7.1.5
Compensation Elements Paid in 2020 or
Granted with respect to 2020 to Mr. Charles
Edelstenne, Chairman of the Board, and to
Mr. Bernard Charlès, Vice-Chairman of the Board
and Chief Executive Officer
Information contained in the corporate
governance report relating to the compensation
of the Corporate Officers (mandataires sociaux)
(Article L. 22-10-9, I of the French Commercial
Code)
258
260
7.1.6
Compensation Policy for Corporate Officers
7.1.7 Reappointment of two directors
261
261
7.1.8 Ratification of the appointment of a director
on a temporary basis by the Board of Directors
261
7.1.9 Authorization to Repurchase Shares of Dassault
Systèmes
7.1.10 Delegations of authority and powers to increase
the share capital
7.1.11 Financial authorizations for issuances
reserved to employees and corporate officers
(mandataires sociaux)
7.1.12 Five-for-one stock split
262
262
263
264
7.2 Text of the Draft Resolutions
Proposed by the Board of
Directors to the General Meeting
of May 26, 2021
264
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DASSAULT SYSTÈMES ANNUAL REPORT 2020CONTENTS 7 GeneralMeeting
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7.1 Presentation of the Resolutions Proposed
by the Board of Directors to the General
Meeting of May 26, 2021
7.1.1 Annual Financial Statements and Allocation of the Results
It is proposed to approve the annual financial statements of
Dassault Systèmes SE (or the “Company” for the purposes
of this Chapter 7 “General Meeting”) for the year ended
December 31, 2020, prepared on the basis of French
accounting principles, as they have been presented
in
paragraph 4.2 “Parent company Financial Statements”.
Dassault Systèmes SE has paid dividends every year since
1986. The decision to distribute dividends and their amount
depends on the profits and the financial position of Dassault
Systèmes SE as well as other factors. Dividends, which have
been distributed but are not collected by a shareholder, revert
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, a profit
of €412,948,808.25 was realized for the year ended December 31, 2020, which we propose that you allocate as follows:
} to the legal reserve
} to a Special Reserve Account(2)
} for distribution to the 265,422,264 shares forming the share capital as of 02/28/2021 of a
dividend of (€0.56 x 265,422,264 shares)(3)
} to retained earnings
which, increased by the retained earnings from previous years of €2,466,992,838.93, brings the amount of
retained earnings to
€54,911.80
€34,000.00
€148,636,467.84
€264,223,428.61
€2,731,216,267.54
(1) After allocation to the legal reserve and the Special Reserve Account, this profit increased by the retained earnings from previous years of €2,466,992,838.93 results in a
distributable profit of €2,879,852,735.38.
(2) In compliance with Article 238 bis AB, paragraph 5, of the French General Tax Code.
(3) The aggregate amount of the dividend will be increased, based on the number of new shares created between March 1, 2021 and the date of the General Meeting of May 26, 2021,
consecutively to the exercise of share subscription options, it being specified that the maximum number of shares which could be issued upon the exercise of subscription options
is 4,224,592, i.e. a maximum supplementary dividend of €2,365,771.52.
Further new shares created by exercise of options until the
date of the Annual General Meeting deciding on the allocation
of profit related to the preceding year will receive the dividend
distributed with respect to that year (see paragraphs 5.1.5
“Interests of Executive Management and Employees in the
Share Capital of Dassault Systèmes SE” and 6.4 “Stock Market
Information”).
Therefore, it is proposed that the General Meeting of
May 26, 2021 approves for the year 2020 the distribution
of (i) a dividend of €0.56 per share comprising the share
capital as of the date of this General Meeting, resulting –
on the basis of the number of shares representing the share
capital as of February 28, 2021 – in an aggregate amount
of €148,636,467.84 and (ii) where applicable, an additional
aggregate maximum amount of €2,365,771.52, which
corresponds to the maximum number of new shares which
could be issued between March 1, 2021 and the date of the
General Meeting (i.e. 4,224,592 shares).
Shares will be traded ex-dividend as of May 28, 2021 and
dividends will be made payable on June 1st, 2021.
On the date of payment, the amount of the dividend
corresponding to
(i) the treasury shares of Dassault
Systèmes SE and (ii) the Dassault Systèmes shares held by
SW Securities LLC, a company which is controlled by Dassault
Systèmes, will be allocated to the “retained earnings”, in
accordance with the provisions of Article L. 225-210 of the
French Commercial Code and the contractual provisions in
force between SW Securities LLC and Dassault Systèmes SE.
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 share subscription options
between March 1 and the date of the General Meeting on
May 26, 2021. The amount required for payment of dividends
for shares issued during this period will be taken from “retained
earnings”.
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7
The amount thus distributed to
individual shareholders
domiciled for tax purposes in France will, when appropriate,
either be subject to the flat tax of 12.8% or, upon exercise of
an individual option of the shareholders per year expressly,
irrevocably and globally at their level, be taken into account
for determining shareholders’ total income subject to the
progressive rate of income tax for the year during which
it was received (Article 200 A of the French Tax Code) after
application of an uncapped deduction of 40% (as provided by
Article 158-3-2 of the French Tax Code). The dividend may
be subject to a non-discharging income tax withholding at a
rate of 12.8% (as provided by Article 117 quater of the French
Tax Code). The dividend will also be subject to social security
contributions at the rate of 17.2%.
Pursuant to Article 243 bis of the French Tax Code, it is noted that dividends per share paid over the last three years have been
as follows:
Dividend(1)(in euros)
Number of shares eligible for dividends
(1) Dividends 100% eligible for the 40% deduction provided for in Article 158-3-2 of the French Tax Code.
2019
0.70
2018
0.65
2017
0.58
260,681,320
259,679,976
259,243,696
7.1.2 Consolidated financial statements
In addition to the 2020 parent company annual financial statements, it is also proposed to approve the Dassault Systèmes
consolidated financial statements for the year ended December 31, 2020, prepared in accordance with IFRS as described in
paragraph 4.1.1 “Consolidated Financial Statements” of this Annual Report.
7.1.3 Related-party agreements
The following agreements, which were approved in accordance
with Articles L. 225-38 et seq. of the French Commercial Code,
were in effect during the year ended December 31, 2020.
These are undertakings made by the Company in connection
with its “Directors and Corporate Officers Liability Insurance
Policy:
} to reimburse 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
and payment of the costs in relation with legal defense
related thereto, to the extent they would not be covered by
that insurance policy (approved by the Board of Directors’
meeting held on July 24, 1996);
} to assume, under certain conditions, the cost of legal
defense of Directors of Dassault Systèmes SE 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 Dassault
Systèmes (approved by the Board of Directors’ meeting held
on September 23, 2003).
These agreements were reviewed by the Board of Directors at its
meeting on March 18, 2021, in accordance with the provisions
of Article L. 225-40-1 of the French Commercial Code.
The Statutory Auditors have prepared a special report
pursuant to Articles L. 225-40 and L. 225-40-1 of the
French Commercial Code, as set forth in paragraph 4.2.4
“Statutory Auditors’ Report on Related Party Agreements and
Commitments”. The General Meeting has been requested to
acknowledge this report which refers to no new agreements.
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7.1.4 Compensation Elements Paid in 2020 or Granted with respect
to 2020 to Mr. Charles Edelstenne, Chairman of the Board,
and to Mr. Bernard Charlès, Vice-Chairman of the Board
and Chief Executive Officer
Pursuant to the provisions of Article L. 22-10-34, II of the
French Commercial Code, it is proposed that the General
Meeting approves the compensation paid in 2020 or granted
with respect to 2020 to Mr. Charles Edelstenne, Chairman of
the Board of Directors, and Mr. Bernard Charlès, Vice-Chairman
of the Board of Directors and Chief Executive Officer. These
compensation elements are summarized in the tables below
(see also paragraph 5.1 “The Board’s corporate governance
report”). The payment of the Chief Executive Officer’s variable
compensation with respect to 2020 is subject to the General
Meeting’s approval of the compensation elements for 2020.
Since the Chairman of the Board does not receive any variable
or extraordinary compensation, this condition does not apply
to him.
7.1.4.1
Compensation Elements Due or Granted with respect to 2020 to Mr. Charles Edelstenne,
Chairman of the Board(1)
Compensation granted with respect to 2020
Compensation elements
Fixed compensation(2)
Amount (in
euros)
982,000
Observations
Gross fixed compensation for 2020 set by the Board of Directors on March 11, 2020, upon
the proposal of the Compensation and Nomination Committee.
This compensation was paid in 2020.
Annual variable compensation N/A
Mr. Charles Edelstenne receives no annual variable compensation.
Deferred annual variable
compensation
Multi-year variable
compensation
Compensation allocated to
directors in respect of the
directorship(3)
Extraordinary compensation
Share subscription options
and/or performance share
awards
Indemnity upon start or
termination of function
Non-compete indemnity
Additional retirement plan
Benefits in kind(4)
N/A
N/A
60,250
N/A
N/A
N/A
N/A
N/A
145
Mr. Charles Edelstenne receives no deferred annual variable compensation.
Mr. Charles Edelstenne receives no multi-year variable compensation.
Gross compensation amount allocated to directors for 2020.
This compensation was paid at the beginning of 2021.
Mr. Charles Edelstenne receives no extraordinary compensation.
Mr. Charles Edelstenne does not hold any share subscription options and was not granted
any performance shares.
Mr. Charles Edelstenne receives no indemnity upon start or termination of function.
Mr. Charles Edelstenne receives no non-compete indemnity.
No additional retirement plan was implemented by Dassault Systèmes SE.
This benefit in kind is linked to a mandatory supplemental medical coverage.
(1) All compensation paid by Dassault Systèmes to Mr. Charles Edelstenne is paid by Dassault Systèmes SE, a company incorporated under the laws of France.
(2) See also paragraph 5.1.3.1 “Compensation of the Chairman of the Board”. In 2020, GIMD paid Mr. Charles Edelstenne gross compensation of €905,400 as Chairman of GIMD.
(3) See also paragraph 5.1.3.3 “Directors Compensation” on the conditions for distributing the annual budget allocated to Directors of Dassault Systèmes SE.
(4) In 2020, GIMD granted benefits in kind to Mr. Charles Edelstenne related to the use of a car in an amount of €10,326.
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As a reminder:
Compensation granted with respect to 2019 and paid in 2020
Compensation elements
Amount (in
euros)
Observations
Compensation allocated to directors in
respect of the directorship
49,500
Gross compensation amount allocated to directors for 2019.
This compensation was paid at the beginning of 2020.
7.1.4.2
Compensation Elements Due or Granted with respect to 2020 to Mr. Bernard Charlès,
Vice- Chairman of the Board of Directors and Chief Executive Officer(1)
Compensation granted with respect to 2020
Compensation elements
Fixed compensation
Amount
(in euros)
1,390,000
Annual variable compensation 1,600,000
Deferred annual variable
compensation
Multi-year variable
compensation
Compensation allocated to
directors in respect of the
directorship(3)
N/A
N/A
40,250
Observations
Fixed gross compensation with respect to 2020 set by the Board of Directors on
March 11, 2020(2), upon the proposal of the Compensation and Nomination Committee.
This compensation was paid in 2020.
Variable gross compensation with respect to 2020 actually earned and decided by the Board
of Directors’ meeting of March 18, 2021(2),upon the proposal of the Compensation and
Nomination Committee.
This compensation will be paid in 2021 subject to approval by the General Meeting of the
compensation elements of Mr. Bernard Charlès, Vice-Chairman of the Board of Directors and
Chief Executive Officer, for 2020.
Mr. Bernard Charlès receives no deferred annual variable compensation.
Mr. Bernard Charlès receives no multi-year annual variable compensation.
Gross compensation amount allocated to directors for 2020.
This compensation was paid at the beginning of 2021.
Extraordinary compensation
N/A
Mr. Bernard Charlès receives no extraordinary compensation.
Granting of share subscription
options and/or performance
share awards
17,526,600(4) Mr. Bernard Charlès was granted 300,000 2020-B shares by the Board of Directors’ meeting
on May 26, 2020 (as part of the process of associating him with the Company’s capital) (5)(6).
Indemnity upon start or
termination of function
N/A
Non-compete indemnity
Additional retirement plan
Benefits in kind
N/A
N/A
15,577
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 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 then in force,
this commitment on the part of Dassault Systèmes SE was authorized by the Board of
Directors on March 15, 2018 and approved by the General Meeting on May 22, 2018
(6th resolution)(6).
Mr. Bernard Charlès receives no non-compete indemnity.
No additional retirement plan was implemented.
These benefits in kind are linked to a mandatory supplemental medical coverage and use of
a vehicle made available to Mr. Bernard Charlès by Dassault Systèmes SE.
(1) All compensation paid by the Company to Mr. Bernard Charlès is paid by Dassault Systèmes SE, an operating company incorporated under the laws of France.
(2) See also paragraphs 5.1.3.2 “Compensation of the Chief Executive Officer” and 5.1.4 Table 2 “Summary of the compensation of each Executive Officer”.
(3) See also paragraph 5.1.3.3 “Directors Compensation” on the conditions for distributing the annual budget allocated to directors of Dassault Systèmes SE.
(4) Value based on the method chosen for the consolidated financial statements before the spreading of the expense and taking into account the performance criteria.
(5) Such shares are granted to Mr. Bernard Charlès as part of the gradual process of associating him with the Company’s capital that began several years ago, with the aim of ultimately
recognizing his entrepreneurial role for over 35 years with Dassault Systèmes and providing him with an equity interest comparable to that of founders of companies in the same
sector, or more generally, of his peers in technology companies around the world.
(6) See also paragraph 5.1.3.2 “Compensation of the Chief Executive Officer”.
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As a reminder:
Compensation granted with respect to 2019 and paid in 2020
Compensation elements
Amount
(in euros)
Observations
Annual variable compensation
1,556,800
Variable gross compensation with respect to 2019 actually earned and decided by the
Board of Directors of March 11, 2020, upon the proposal of the Compensation and
Nomination Committee.
This compensation was paid in 2020 following approval by the General Meeting of the
compensation elements of Mr. Bernard Charlès, Vice-Chairman of the Board of Directors
and Chief Executive Officer, for 2019.
Compensation allocated to directors
in respect of the directorship
33,000
Gross compensation amount allocated to directors for 2019.
This compensation was paid at the beginning of 2020.
7.1.5
Information contained in the corporate governance report relating
to the compensation of the Corporate Officers (mandataires
sociaux) (Article L. 22-10-9, I of the French Commercial Code)
In accordance with the provisions of Article L. 22-10-34, I of the French Commercial Code, the following information is submitted
for your approval:
Information referred to in Section I of Article L. 22-10-9 of the French Commercial Code.
Total compensation and benefits of any kind paid in 2020 or granted with respect to 2020 and the relative
proportion of fixed and variable compensation
See paragraphs 5.1.4 and 5.1.5
Use of the option of requesting the repayment of variable compensation
N/A
Undertakings made by the Company in connection with the termination or change of office or subsequent
to the performance of such office and the estimated amount liable to be paid on that basis
See paragraph 5.1.3.2, page 209
Any compensation paid or granted by a company within the scope of consolidation
“Equity” ratios
Annual change in compensation, the Company’s performance, average compensation on a full-time
equivalent basis of the Company’s employees (other than management) and “equity” ratios over the last
five or more fiscal years
Explanation of how the total compensation reflects the compensation policy adopted, including how it
contributes to the long-term performance of the Company, and how the performance criteria have been
applied.
Taking into account the vote of the last Ordinary General Meeting provided for in Article L. 22-10-34, I of
the French Commercial Code
Any deviation from the procedure for implementing the compensation policy and any derogation applied
Application of the provisions of the second paragraph of Article L. 225-45 of the French Commercial Code
(irregular composition of the Board of Directors)
N/A
See paragraph 5.1.4, pages 211
and 212
See paragraph 5.1.4,
page 212
See paragraph 5.1.4 page 211
N/A
N/A
N/A
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7.1.6 Compensation Policy for Corporate Officers
In accordance with the provisions of Articles L. 22-10-8, I and R. 22-10-14 of the French Commercial Code, the corporate
governance report (see paragraph 5.1.3 “Compensation Policy for Corporate Officers”) describes the compensation policy for
corporate officers set by the Board of Directors, submitted for your approval in accordance with Article L. 22-10-8, II of the French
Commercial Code.
7.1.7 Reappointment of two directors
The terms of office of Ms. Odile Desforges and Mr. Soumitra
Dutta are due to expire at the General Meeting on May 26, 2021.
skills and expertise in the manufacturing industry are also an
asset for the Board.
It is proposed to re-elect them for a four-year term, i.e. until
the General Meeting called to approve the financial statements
for the year ending December 31, 2024.
The targets applicable to the Board’s composition,
in
particular in terms of diversity, and the full biographies of
Ms. Odile Desforges and Mr. Soumitra Dutta can be found in
paragraph 5.1.1.1 “Composition of the Board of Directors”.
The Board of Directors of Dassault Systèmes SE is currently
made up of 50% of women and 50% of independent directors
and each of the Board Committees has 100% of independent
directors.
Ms. Odile Desforges has sound financial and accounting skills
and significant experience in the automotive industry. As a
member of the Audit Committee, she has a major role, her
Mr. Soumitra Dutta has a sound expertise in the field of
innovation. Member of the Scientific
technologies and
Committee, which he chairs, and of the Compensation and
Nomination Committee, his contributions are very useful to
both Committees.
Ms. Odile Desforges and Mr. Soumitra Dutta are both
independent directors.
If this proposal to renew their terms of office meets your
approval, the Board of Directors would have 10 members,
excluding directors representing employees,
including 5
women and 5 independent directors. These proportions go
beyond the legal requirements and recommendations of the
AFEP-MEDEF Code(1).
7.1.8 Ratification of the appointment of a director
on a temporary basis by the Board of Directors
Following the decision of Mr. Thibault de Tersant to resign
from his office as Director, which he held since 1993 when he
was Chief Financial Officer and then Executive Vice- President
and Chief Financial Officer, the Board of Directors decided,
at its meeting of July 22, 2020, in accordance with the
recommendation of the Compensation and Nomination
Committee, to appoint by co-option Mr. Pascal Daloz, Chief
Operating Officer & Chief Financial Officer, as Director, for the
remainder of Mr. Thibault de Tersant’s term of office.
The biography of Mr. Pascal Daloz can be found
paragraph 5.1.1.1 “Composition of the Board of Directors”.
in
It is proposed that the General Meeting ratifies the appointment
of Mr. Pascal Daloz as Director for the remainder of Mr. Thibault
de Tersant’s term of office, i.e. until the General Meeting
called to approve the financial statements for the year ending
December 31, 2021.
In addition to his financial insights as a continuation of the role
previously played by Thibault de Tersant, Pascal Daloz brings
to the Board of Directors an in-depth operational overview in
his capacity as head of the Operations Executive Committee.
(1) As a reminder, the proportion of female representation and independent directors does not include the directors representing employees, in accordance
with Articles 9.3 of the AFEP-MEDEF Code and Articles L. 225-27-1 and L. 22-10-7 of the French Commercial Code, respectively.
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7.1.9 Authorization to Repurchase Shares of Dassault Systèmes
The authorization to repurchase shares of the Company
granted to the Board of Directors at the General Meeting
of May 26, 2020 will expire at the General Meeting
called to approve the financial statements for the year
ended December 31, 2020. Within the framework of this
authorization, share buybacks were carried out in 2020
and in early 2021 (these transactions are described in
paragraph 6.2.4 “Share Buyback Programs”). These buybacks
were carried out for the purposes of covering the Company’s
obligations resulting from share grants, and maintaining an
active market and providing liquidity for Dassault Systèmes
shares. An active market is maintained by an investment
services provider operating under a liquidity agreement
between Dassault Systèmes SE and Oddo BHF SCA. This
agreement was amended in 2019 to comply with the new
requirements of Decision no. 2018-01 of July 2, 2018 of the
Financial Markets Authority and was tacitly renewed for the
2021 fiscal year.
Additional share buybacks may be made until the date of the
General Meeting and will be described in the Annual Report
for the year ending on December 31, 2021.
It is proposed to reauthorize the Board of Directors to
repurchase Dassault Systèmes shares, in accordance with
Articles L. 22-10-62 et seq. of the French Commercial
Code, within a limit of 5 million shares (subject to potential
adjustment to take into account a five-for-one stock split of
the Dassault Systèmes' shares), i.e. approximately 1.88% of
the share capital as of February 28, 2021, within the limits set
by the applicable regulations. The maximum amount of funds
dedicated to the repurchase of Dassault Systèmes shares may
not exceed €800 million.
Should you approve this proposal, the authorization will be
valid until the Annual General Meeting approving the financial
statements for the year ending December 31, 2021.
This authorization to buy back shares may be used for the
following purposes:
1) cancel shares for the purpose of increasing the profitability
of shareholders’ equity and earnings per share, subject to
adoption by the Extraordinary General Meeting of the
resolution permitting shares to be canceled;
2) meet obligations related to stock option grants or other
allocations of shares to employees or corporate officers of
Dassault Systèmes SE or of an affiliated company;
3) provide shares upon exercise of rights attached to
securities giving right to shares of Dassault Systèmes SE;
4) animate the market or provide liquidity for Dassault
intermediary of an
Systèmes shares through the
investment services provider by means of a liquidity
contract complying with the Financial Markets Authority
(AMF)’s accepted market practice;
5)
implement any stock-exchange market practice which
may be accepted by law or by the Financial Markets
Authority (AMF);
6) deliver shares
in the context of external growth
transactions, in particular through mergers, demerger,
partial demerger or contributions in kind.
The acquisition, sale, transfer or exchange of such shares may
be completed at any time in accordance with the applicable
legal provisions and regulations except during a tender offer
period.
The share buyback program is described in paragraph 6.2.4
“Share Buyback Programs” of this Annual Report, 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
5% of its amount per 24-month period.
7.1.10 Delegations of authority and powers to increase
the share capital
The delegations of authority and powers to increase the
share capital granted to the Board of Directors by the General
Meeting of May 23, 2019 are due to expire in July 2021. It is
therefore proposed to the General Meeting to reauthorize the
Board of Directors to increase the share capital for a period of
26 months, in order to enable the Board of Directors, at any
time, to select among a wide range of securities giving access
to the share capital or debt securities of the Company, with
or without preferential subscription rights for shareholders,
through a public offering, the most appropriate financing for
the Group’s development, taking into account the market
conditions at the time of the contemplated transaction.
It is also proposed to renew the delegation of authority
granted to the Board of Directors to increase the share capital
by incorporation of reserves, profits or premiums, as well
as the delegation of powers to increase the share capital
to remunerate contributions in kind of shares or equity-
linked securities.
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The resolutions submitted for this purpose will replace those
adopted by the General Shareholders’ Meeting of May 23, 2019,
which the Board of Directors has not used as of the date of
preparation of this Annual Report (see paragraph 5.1.7.2 “Table
summarizing the current delegations granted by the General
Meeting in respect of capital increases”).
Should you approve these resolutions, the Board of Directors
will have the opportunity to:
} carry out capital increases with or without preferential
subscription rights for shareholders (in particular by using
the option offered by law to launch a public offering only for
portfolio managers or qualified investors) up to a maximum
nominal amount of €12 million and, for debt securities
giving access to the share capital, up to a maximum nominal
amount of €1 billion;
} carry out capital increases by incorporation of reserves,
profits or premiums up to a maximum nominal amount of
€12 million;
} increase the share capital to remunerate contributions in
kind of shares or equity-linked securities up to a limit of
10% of the share capital and the same maximum nominal
amount of €12 million.
The Board of Directors would not be able to use these
delegations in case of a tender offer on the Company’s shares.
The overall cap of €12 million will count towards the overall
nominal amount for capital increases that may be carried
out and provided for in (i) resolutions 14 to 19, 21 and 22
submitted to the General Meeting on May 26, 2021 and
(ii) resolutions 17 to 22 approved by the General Meeting of
May 26, 2020 (Delegations for mergers, demergers and partial
demergers, see paragraph 7.1.12 of the 2019 Annual Report).
7.1.11 Financial authorizations for issuances reserved to employees
and corporate officers (mandataires sociaux)
The compensation policy implemented by Dassault Systèmes
must serve the ability to attract, to motivate and to retain key
employees and executives with the diversity of talents and the
high level of skills required for the Company’s various activities,
the competition in the labor market for such employees being
intense.
The members of the Executive team and key employees of
Dassault Systèmes may be granted long-term incentives
notably through grants of Dassault Systèmes performance
shares or share subscription options (see paragraph 5.1.5.
“Interests of Executive Management and Employees in the
Share Capital of Dassault Systèmes SE”).
Performance shares
It is proposed to renew the authorization to grant performance
shares to employees or corporate officers (mandataires sociaux)
of Dassault Systèmes, granted to the Board of Directors by the
General Meeting of May 22, 2018 and which will expire in
2021.
This new authorization would cancel, as from May 26, 2021
and for the yet unused portion, the authorization granted to
the Board of Directors by the General Meeting of May 22,
2018 (17th resolution).
This authorization would be granted for a period of two years.
The total number of free shares granted under this
authorization may not exceed 1.5% of the Company’s share
capital, at the date of the grant by the Board of Directors.
In accordance with AFEP-MEDEF’s Corporate Governance
Code for listed companies, and the recommendation from
the Compensation and Nomination Committee, it is proposed
that the number of shares that may be granted to corporate
officers (dirigeants mandataires sociaux) within the meaning
of this Code be limited to 35% of the so authorized overall
amount.
All share grants, including performance shares grants to the
Chief Executive Officer as part of the process of associating
him with the Company’s capital, would be subject to a
continued employment condition, no share may be vested
if the continued employment condition is not met, and to a
strict performance condition, assessed over an average period
of 3 years.
The performance condition would be a growth rate of the
Company's net earnings per share, defined by the Board of
Directors, consistent with the growth rate included in the multi
annuals objectives published by the Company and reminded
in paragraph 3.2 “Financial Objectives” of the Annual Report.
For some beneficiaries, the performance condition would
alternatively or cumulatively be based on a specific target to
their brand, if appropriate.
No performance share may therefore be vested below a certain
level of achievement, defined by the Board of Directors,
usually set at 80%, of the performance condition.
Information relating to the use by the Board of Directors of
the authorization granted by the General Meeting of May 22,
2018 can be found in paragraph 5.1.5 “Interests of executive
management and employees in the share capital of Dassault
Systèmes SE”.
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Capital increase for members
of corporate savings plans
Furthermore, in accordance with law, it is proposed that
the Board of Directors be authorized to increase the share
capital reserved for employees of Dassault Systèmes SE and/
or its affiliated companies who are members of a corporate
savings plan.
This new authorization would cancel and replace the authorization
granted by the General Meeting on May 26, 2020.
It is also proposed to authorize the Board of Directors to increase
the Company’s share capital for the benefit of a category
of beneficiaries in connection with the implementation of
employee shareholding operations in order to facilitate their
structuring in certain countries outside of France.
The maximum nominal global amount of the capital increases
that may be carried out under these authorizations would be
€1.5 million.
7.1.12 Five-for-one stock split
Given the increase in the Dassault Systèmes share price from
€73.77 on December 31, 2015 to €166.15 on December 31,
2020 (i.e. an increase of 125%) and to improve the market
liquidity of the share and continue to diversify its shareholder
base, it is proposed to the General Meeting to vote on the five
for one stock split from €0.50 to €0.10 per share. As a result,
the number of shares will be multiplied by five. Your Board
of Directors will set the date on which the reduction of the
par value will take effect, which will be within 12 months
following the date of this General Meeting. This reduction will
have no impact on the double voting rights attached to shares
that have been held in registered form for at least two years
(pursuant to Article 29 of the by laws).
7.2 Text of the Draft Resolutions Proposed by
the Board of Directors to the General Meeting
of May 26, 2021
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 of Directors and the parent
company annual financial statements for the year ended
December 31, 2020, as they have been presented.
The General Meeting consequently approves any transactions
disclosed in these financial statements or summarized in
these reports.
The General Meeting, after the reading of the report of the
Board of Directors with respect to management of Dassault
Systèmes 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
of Directors and the consolidated financial statements for the
year ended December 31, 2020, 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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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 year amounting to
€412,948,808.25(1) as follows:
} to the legal reserve
} to a special reserve account(2)
} for distribution to the 265,422,264 shares forming the share capital as of 02/28/2021 of a
dividend of (€0.56 x 265,422,264 shares)(3)
} to retained earnings
which, increased by the retained earnings from previous years of €2,466,992,838.93, brings the amount of
retained earnings to
€54,911.80
€34,000.00
€148,636,467.84
€264,223,428.61
€2,731,216,267.54
(1) After allocation to the legal reserve and the special reserve account, this profit increased by the retained earnings from previous years of €2,466,992,838.93 results in a
distributable profit of €2,879,852,735.38.
(2) In compliance with Article 238 bis AB, paragraph 5, of the French General Tax Code.
(3) The aggregate amount of the dividend will be increased, based on the number of new shares created between March 1, 2021 and the date of this General Meeting, consecutively
to the exercise of share subscription options, it being specified that the maximum number of shares which could be issued upon the exercise of subscription options is 4,224,592,
i.e. a maximum supplementary dividend of €2,365,771.52.
Shares will be traded ex-dividend as of May 28, 2021 and
dividends will be made payable on June 1st, 2021.
On the date of payment, the amount of the dividend
corresponding to
(i) the treasury shares of Dassault
Systèmes SE and (ii) the Dassault Systèmes shares held by
SW Securities LLC, a company which is controlled by Dassault
Systèmes, will be allocated to the “retained earnings”, in
accordance with the provisions of Article L. 225-210 of the
French Commercial Code and the contractual provisions in
force between SW Securities LLC and Dassault Systèmes SE.
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 share subscription options between March 1,
2021 and the date of this General Meeting. The amount
required for payment of dividends for shares issued during this
period will be taken from the “retained earnings”.
individual shareholders
The amount thus distributed to
domiciled for tax purposes in France will, when appropriate,
either be subject to the flat tax of 12.8%, or, upon exercise
of an individual option of the shareholders per year expressly,
irrevocably and globally at their level, be taken into account
for determining shareholders’ total income subject to the
progressive rate of income tax for the year during which
it was received (article 200A of the French Tax Code) after
application of an uncapped deduction of 40% (as provided by
Article 158-3-2 of the French Tax Code). The dividend may
be subject to a non-discharging income tax withholding at a
rate of 12.8% (as provided by Article 117 quater of the French
Tax Code). The dividend will also be subject to social security
contributions at the rate of 17.2%.
Pursuant to Article 243 bis of the French Tax Code, it is noted that dividends per share paid over the last three years have been
as follows:
Dividend(1) (in euros)
Number of shares eligible for dividends
(1) Dividends 100% eligible for the 40% deduction provided for in Article 158-3-2 of the French Tax Code.
2019
0.70
2018
0.65
2017
0.58
260,681,320
259,679,976
259,243,696
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❘
Fourth resolution
Related-party agreements
The General Meeting, 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 does not include any new
agreements.
❘
Fifth resolution
Compensation Policy for corporate officers (mandataires
sociaux)
The General Meeting, having reviewed the report drawn up
in accordance with Articles L. 225-37 and L. 22-10-8 of the
French Commercial Code, approves the compensation policy
for corporate officers (mandataires sociaux) set by the Board
of Directors and contained in paragraph 5.1.3 “Compensation
Policy for Corporate Officers” of Chapter 5 “Corporate
Governance” of the Annual Report for 2020.
❘
Sixth resolution
Compensation elements paid in 2020 or granted with respect
to 2020 to Mr. Charles Edelstenne, Chairman of the Board of
Directors
The General Meeting, having reviewed the report drawn up
in accordance with Articles L. 225-37 and L. 22-10-9 of
the French Commercial Code, approves the compensation
elements paid in 2020 or granted with respect to 2020 to
Mr. Charles Edelstenne, Chairman of the Board of Directors,
as indicated in paragraph 5.1.4 “Summary of the Compensation
and Benefits due to Corporate Officers (mandataires sociaux)”
of Chapter 5 “Corporate Governance” of the Annual Report
for 2020.
❘
Eighth resolution
Approval of the information contained in the corporate
governance report and relating to the compensation of the
corporate officers (mandataires sociaux) (Article L. 22-10-9 of
the French Commercial Code)
The General Meeting, having reviewed the report drawn
up in accordance with Articles L. 225-37 and L. 22-10-9
of the French Commercial Code, approves the information
of the corporate governance report on the compensation
of the corporate officers (mandataires sociaux) mentioned
in Article L. 22-10-9, I of the French Commercial Code and
contained in paragraphs 5.1.4 “Summary of the Compensation
and Benefits due to Corporate Officers (mandataires sociaux)”
and 5.1.3.2 “Compensation of the Chief Executive Officer”
of Chapter 5 “Corporate Governance” of the Annual Report
for 2020.
❘
Ninth resolution
Reappointment of Ms. Odile Desforges
The General Meeting notes that Ms. Odile Desforges’s term as
director expires at this General Meeting and re-appoints her
for a four-year period. This term of office will expire at the
General Meeting approving the financial statements for the
year ending December 31, 2024.
❘
Tenth resolution
Reappointment of Mr. Soumitra Dutta
The General Meeting notes that Mr. Soumitra Dutta’s term as
director expires at this General Meeting and re-appoints him
for a four-year period. This term of office will expire at the
General Meeting approving the financial statements for the
year ending December 31, 2024.
❘
Seventh resolution
❘
Eleventh resolution
Compensation elements paid in 2020 or granted with respect
to 2020 to Mr. Bernard Charlès, Vice-Chairman of the Board of
Directors and Chief Executive Officer
The General Meeting, having reviewed the report drawn up
in accordance with Articles L. 225-37 and L. 22-10-9 of
the French Commercial Code, approves the compensation
elements paid in 2020 or granted with respect to 2020 to
Mr. Bernard Charlès, Vice-Chairman of the Board of Directors
and Chief Executive Officer, as indicated in paragraph 5.1.4
“Summary of the Compensation and Benefits due to Corporate
Officers (mandataires sociaux)” of Chapter 5 “Corporate
Governance” of the Annual Report for 2020.
Ratification of the appointment of Mr. Pascal Daloz as a
director on a temporary basis by the Board of Directors
The General Meeting ratifies the appointment of Mr. Pascal
Daloz, decided by the Board of Directors, at its meeting of
July 22, 2020, as director, on a temporary basis, to replace
Mr. Thibault de Tersant who resigned, for the remainder of his
term of office, i.e. until the General Meeting called to approve
financial statements for the year ending December 31, 2021.
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❘
Twelfth resolution
Authorization to repurchase Dassault Systèmes shares
The General Meeting, having reviewed the report of the Board
of Directors, authorizes the Board of Directors to purchase a
maximum of 5 million Dassault Systèmes shares (subject to
potential adjustment to take into account a five-for-one stock
split of the Dassault Systèmes' shares), in accordance with
the terms and conditions stipulated in Articles L. 22- 10- 62
et seq. of the French Commercial Code, Articles 241-1
et seq. of the Financial Markets Authority (AMF) General
Regulation, Regulation (EU) no. 596/2014 of April 16, 2014
on market abuse (“MAR Regulation”), and Commission
Delegated Regulation (EU) no. 2016/1052 of March 8, 2016
supplementing Regulation (EU) no. 596/2014.
This authorization may be used by the Board of Directors for
the following purposes:
1) cancel shares for the purpose of increasing the profitability
of shareholders’ equity and earnings per share, subject
to adoption by the Extraordinary General Meeting of the
resolution permitting shares to be canceled;
2) meet obligations related to stock option grants or other
allocations of shares to employees or corporate officers
(mandataires sociaux) of Dassault Systèmes or of an
affiliated company;
3) provide shares upon exercise of rights attached to
securities giving right to shares of Dassault Systèmes;
4) animate the market or provide liquidity for Dassault
Systèmes shares through the
intermediary of an
investment services provider by means of a liquidity
contract complying with the Financial Markets Authority
(AMF)’s accepted market practice;
5)
implement any stock-exchange market practice which
may be accepted by law or by the Financial Markets
Authority (AMF);
6) deliver shares
in the context of external growth
transactions, in particular through mergers, demerger,
partial demerger or contributions in kind.
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.
The acquisition, sale, transfer or exchange of such shares may
be completed at any time in accordance with the applicable
legal provisions and regulations except during a tender
offer period.
The maximum amount of funds dedicated to the repurchase of
Company shares may not exceed €800 million, this condition
being cumulative with the cap of 5 million Dassault Systèmes
shares (subject to potential adjustment to take into account a
five-for-one stock split of the Dassault Systèmes' shares).
This authorization can be used by the Board of Directors for all
the treasury shares held by Dassault Systèmes.
This authorization will be valid commencing on the date of this
General Meeting until the Annual Ordinary General Meeting
approving the financial statements for the year ending
December 31, 2021. 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 Financial Markets Authority (AMF), accomplish any
formalities, and more generally, carry out any necessary
measures to complete such transactions.
The General Meeting also grants any and all powers to the
Board of Directors, in case that the Law or the Financial
Markets Authority (AMF) appears to extend or to complete
the authorized objectives concerning the share buyback
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 replaces and supersedes the previous
share buyback program authorized by the Combined General
Shareholders’ Meeting of May 26, 2020, in its twelfth resolution.
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Extraordinary General Meeting
❘
Thirteenth 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 buyback program
The General Meeting, after review 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. 22-10-62 of the French Commercial
Code, to:
2)
3)
} reduce the share capital by canceling, in one or more
transactions, some or all of the shares repurchased by the
Company under its share buyback program, subject to a
limit of 5% of the share capital in each 24-month period;
} deduct the difference between the repurchase value of
the canceled 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 Financial Markets Authority (AMF)
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 year ending
December 31, 2021.
❘ Fourteenth resolution
Delegation of authority granted to the Board of Directors to
increase the share capital by issuing shares or equity securities
giving access to other equity securities of the Company or giving
entitlement to the allocation of debt securities and to issue
securities giving access to the Company’s equity securities to
be issued, with preferential subscription rights for shareholders
The General Meeting, after review of the report of the Board
of Directors and the special report of the Statutory Auditors:
1) delegates to the Board of Directors, pursuant to the
provisions of Articles L. 225-129 to L. 225-129-6,
L. 22-10-49, L. 22-10-51, L. 228-91 and L. 228-92 of
the French Commercial Code, its authority to issue, on
one or several occasions, at the time or times and in the
proportions it shall deem fit, both in France or abroad,
ordinary shares and/or equity securities giving access
to other equity securities or giving entitlement to the
allocation of debt securities and/or any other securities
268
giving access to equity securities of the Company to be
issued, it being specified that the Board of Directors may
delegate to the Chief Executive Officer, or in agreement
with the latter, to one or more Deputy Chief Executive
Officers, under the conditions permitted by law, all the
powers necessary to decide on a capital increase;
resolves that any issue of preference shares and securities
giving access to preference shares is excluded;
resolves that the maximum nominal amount of the capital
increases that may be performed immediately or in the
future under the present authorization cannot exceed
€12 million, it being specified that this overall cap is
fixed not taking into account the nominal amount of the
shares to be issued to preserve the rights of holders of
securities or other rights giving access to the Company’s
share capital, in accordance with the applicable legal
and regulatory provisions and, where applicable, the
contractual provisions allowing other adjustments;
4) also resolves that the nominal amount of the securities
representing the Company’s debt securities, which may
be issued pursuant to this delegation, may not exceed
€1 billion or the equivalent value of this amount in foreign
currency or in accounting units calculated by reference to
several currencies;
5)
6)
resolves that shareholders may exercise, under the
conditions provided for by
law, their preferential
subscription rights to shares, equity securities and other
securities issued under this resolution;
resolves that if the subscriptions on an irrevocable basis
(à titre irréductible) and, where applicable, on a revokable
basis (à titre réductible), have not absorbed the entire
shares, equity securities or other securities issue, the
Board of Directors may offer to the public all or part of the
unsubscribed shares;
7) notes that this delegation will act automatically as a
waiver by shareholders, to the benefit of the holders of
securities giving access to the Company’s capital that
may be issued, of their preferential subscription rights to
equity securities to which these securities may create a
right;
8)
9)
resolves that the amount due to the Company immediately
or in the future for each of the shares issued under this
delegation must be at least equal to the par value of the
shares on the issuance date;
resolves that the Board of Directors may, if it sees fit,
charge any expenses to the share premium(s), in particular
expenses, duties and fees involved in the completion
of these issuances, and if necessary, deduct from the
amount, the sums required to increase the legal reserve
to one-tenth of the new share capital after each issuance;
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10) resolves that the Board of Directors may not, unless
approved by the General Meeting, use this authorization
as from the submission of a tender offer on the Company’s
shares by a third party and until the end of the tender
offer period;
d)
the issuance by the Company of securities giving access
to existing equity securities or giving entitlement to the
allocation of debt securities of another company in which
the Company does not directly or indirectly own more
than half of the share capital.
11) resolves that this delegation cancels the delegation
of the same nature granted by the Combined General
Shareholders’ Meeting of May 23, 2019 in its thirteenth
resolution.
The authorization thus granted to the Board of Directors is
valid for twenty-six months from the date of this General
Meeting.
❘ Fifteenth resolution
Delegation of authority granted to the Board of Directors to
increase the share capital by issuing shares or equity securities
giving access to other equity securities of the Company or
giving entitlement to the allocation of debt securities and to
issue securities giving access to equity securities to be issued,
without preferential subscription rights for shareholders and
by way of a public offering other than those referred to in
Article L. 411-2 1° of the French Monetary and Financial Code
The General Meeting, after review of the report of the Board
of Directors and the special report of the Statutory Auditors:
1) delegates to the Board of Directors, pursuant to the
provisions of Articles L. 225-129 to L. 225-129-6,
L. 225-135, L. 225-136, L. 22-10-49, L. 22-10-51,
L. 22-10-52, L. 22-10-54 and L. 228-91 to L. 228-94
of the French Commercial Code, its authority to decide,
through a public offering other than those referred to in
paragraph 1° of Article L. 411-2 of the French Monetary
and Financial Code or, where applicable, subject to the
approval of a specific resolution for this purpose by the
General Meeting, through a public offering referred to in
paragraph 1° of Article L. 411-2 of the French Monetary
and Financial Code, on one or several occasions, at the
time or times and in the proportions it shall deem fit, both
in France and abroad:
a)
b)
the issuance of shares and/or equity securities giving
access to other equity securities or giving entitlement to
the allocation of debt securities of the Company and/or
any other securities giving access to equity securities of
the Company to be issued,
the issuance of shares and/or equity securities giving
access to other equity securities or giving entitlement to
the allocation of debt securities of the Company and/ or
any other securities giving access to equity securities
of the Company to be issued, following the issuance by
companies in which the Company directly or indirectly
holds more than half of the share capital, of any equity
securities or securities giving access to equity securities of
the Company to be issued,
c)
the issuance by the Company of shares and/or equity
securities and/or securities giving access to equity
securities to be issued from a company in which it directly
or indirectly holds more than half of the share capital,
The Board of Directors can delegate to the Chief Executive
Officer, or in agreement with the latter, to one or several
Deputy Chief Executive Officers, in accordance with the
applicable law, all the powers required to decide upon
capital increases.
This decision will act automatically as a waiver by
Company shareholders, to the benefit of the holders of
securities that may be issued by subsidiaries, of their
preferential subscription rights to equity securities to
which these securities may create a right;
resolves that the maximum nominal amount of the capital
increases that may be performed immediately or in the
future under the present authorization cannot exceed
€12 million, it being specified that this cap is fixed not
taking into account the nominal amount of the shares to
be issued to preserve the rights of holders of securities or
other rights giving access to the Company’s share capital,
in accordance with the applicable legal and regulatory
provisions and, where applicable,
the contractual
provisions allowing other adjustments;
resolves that the maximum nominal amount that may be
issued under this resolution will count towards the overall
nominal amount for capital increases of €12 million set in
the fourteenth resolution of this General Meeting;
resolves that any issue of preference shares and securities
giving access to preference shares is excluded;
resolves that this capital increase may result from the
exercise of an allocation right resulting from any securities
issued by any company in which the Company holds,
directly or indirectly, more than half of the share capital
and with the agreement of the latter;
2)
3)
4)
5)
6) also resolves that the nominal amount of the debt
securities that may be issued under this delegation
may not exceed €1 billion or the equivalent value of
this amount in foreign currency or in accounting units
calculated by reference to several currencies, and will be
deducted from the €1 billion cap set under the fourteenth
resolution of this Meeting;
7)
resolves to cancel shareholders’ preferential subscription
rights to shares, equity securities and other securities to
be issued, it being understood that the Board of Directors
may grant shareholders a priority subscription period for
all or part of the issue, during the period and under the
conditions that it will set, in accordance with the provisions
of Article L. 22-10-51 of the French Commercial Code,
this subscription period does not give rise to the creation
of negotiable rights;
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8) notes that this delegation will act automatically as a
waiver by shareholders, to the benefit of the holders of
securities giving access to the Company’s capital that
may be issued, of their preferential subscription rights
to equity securities to which these securities may create
a right;
9)
resolves that the amount due to the Company immediately
or in future for each of the shares issued or to be issued
under this delegation will be at least equal to the minimum
value set by the regulations applicable at the time this
delegation is used, i.e. currently the weighted average
of the Company’s share price on the regulated market of
Euronext Paris in the last three trading days preceding
the start of the public offering, within the meaning of
Regulation (EU) 2017/1129 of June 14, 2017, less, as
the case may be, a maximum discount of 10% and after
correction, if applicable, to take into account the different
vesting dates;
10) resolves that the Board of Directors may use this
delegation, in part or in full, to remunerate securities
contributed to a public exchange offer initiated by the
Company, within the limits and under the conditions
provided for by Article L. 22-10-54 of the French
Commercial Code;
11) resolves that the Board of Directors may, if it sees fit,
charge any expenses to the share premium(s), in particular
expenses, duties and fees involved in the completion
of these issuances, and if necessary, deduct from the
amount, the sums required to increase the legal reserve
to one-tenth of the new share capital after each issuance;
12) resolves that the Board of Directors may not, unless
approved by the General Meeting, use this authorization
as from the submission of a tender offer on the Company’s
shares by a third party and until the end of the tender
offer period.
❘ Sixteenth resolution
Delegation of authority granted to the Board of Directors to
increase the share capital by issuing shares or equity securities
giving access to other equity securities or giving entitlement to
the allocation of debt securities and to issue securities giving
access to equity securities to be issued, without preferential
subscription rights for shareholders, under a public offering
referred to in Article L. 411-2 1° of the French Monetary and
Financial Code
The General Meeting, after review of the report of the Board
of Directors and the special report of the Statutory Auditors:
1) delegates to the Board of Directors, pursuant to the
provisions of Articles L. 225-136 and L. 22-10-52 of
the French Commercial Code, its authority to decide,
within the framework and under the conditions set
by the fifteenth resolution of this General Meeting,
on the issuance of equity securities or debt securities,
through a public offering referred to in paragraph 1° of
Article L. 411-2 of the French Monetary and Financial
Code;
2)
3)
4)
resolves that the maximum nominal amount of capital
increases that may be carried out, immediately or in the
future under this delegation, will count towards the overall
nominal amount for capital increases of €12 million set in
the fourteenth resolution of this General Meeting;
resolves that the Board of Directors may not, unless
approved by the General Meeting, use this authorization
as from the submission of a tender offer on the Company’s
shares by a third party and until the end of the tender
offer period;
resolves that this delegation cancels the delegation
of the same nature granted by the Combined General
Shareholders’ Meeting of May 23, 2019 in its fifteenth
resolution.
13) resolves that this delegation cancels the delegation of the
same nature granted by the Combined General Shareholders’
Meeting of May 23, 2019 in its fourteenth resolution.
The authorization thus granted to the Board of Directors is
valid for twenty-six months from the date of this General
Meeting.
The authorization thus granted to the Board of Directors is valid
for twenty-six months from the date of this General Meeting.
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❘ Seventeenth resolution
Delegation of authority granted to the Board of Directors
to increase the number of securities to be issued in the event
of a share capital increase with or without preferential
subscription rights
The General Meeting, after review of the report of the Board
of Directors:
1) delegates to the Board of Directors, pursuant to the
provisions of Article L. 225-135-1 of the French
Commercial Code, its authority to increase the number of
securities to be issued for each issuance with or without
preferential subscription rights decided pursuant to the
fourteenth, fifteenth and sixteenth resolutions of this
Meeting, within thirty days following the end of the
subscription, up to a limit of 15% of the initial issuance
and at the same price as that used for the initial issuance;
2)
3)
4)
5)
resolves that the maximum nominal amount that may be
issued under this delegation will count towards the overall
nominal amount for capital increases of €12 million set in
the fourteenth resolution of this General Meeting;
resolves that the Board of Directors may, if it sees fit,
charge any expenses to the share premium(s), in particular
expenses, duties and fees involved in the completion
of these issuances, and if necessary, deduct from the
amount, the sums required to increase the legal reserve
to one-tenth of the new share capital after each issuance;
resolves that the Board of Directors may not, unless
approved by the General Meeting, use this authorization
as from the submission of a tender offer on the Company’s
shares by a third party and until the end of the tender
offer period;
resolves that this delegation cancels the delegation
of the same nature granted by the Combined General
Shareholders’ Meeting of May 23, 2019 in its sixteenth
resolution.
The authorization thus granted to the Board of Directors is
valid for twenty-six months from the date of this General
Meeting.
❘
Eighteenth resolution
Delegation of authority granted to the Board of Directors to
increase the share capital by incorporation of reserves, profits
or premiums
The General Meeting, deliberating in accordance with the
quorum and majority conditions required for Ordinary General
Meetings, pursuant to the provisions of Articles L. 225-130
and L. 22-10-50 of the French Commercial Code, and having
reviewed the report of the Board of Directors:
1) delegates to the Board of Directors its authority to
increase the share capital, on one or several occasions, at
the time or times and in the proportions it shall deem fit,
by incorporation of reserves, profits or premiums, or any
other amounts whose incorporation is permitted, or by
combining such a capital increase to a capital increase in
cash carried out under the fourteenth, fifteenth, sixteenth
and seventeenth resolutions of this Meeting, through the
issuance and the grant of free shares or by increasing
the par value of existing shares, or ultimately combining
both transactions, it being specified that the Board of
Directors may delegate to the Chief Executive Officer, or
in agreement with the latter, to one or more Deputy Chief
Executive Officers, under the conditions permitted by law,
all the powers necessary to decide on a capital increase;
resolves that the maximum nominal amount of the capital
increases that may be performed under the present
authorization cannot exceed €12 million, it being specified
that this overall cap is fixed not taking into account the
nominal amount of the shares to be issued to preserve
the rights of holders of securities or other rights giving
access to the Company’s share capital, in accordance with
the applicable legal and regulatory provisions and, where
applicable, the contractual provisions allowing other
adjustments;
resolves that this maximum nominal amount will count
towards the overall nominal amount for capital increases
that may be carried out under the fourteenth resolution
of this General Meeting;
resolves that rights forming odd lots shall not be
negotiable and that the corresponding shares shall be
sold. The amounts resulting from the sale will be allocated
to the holders of such rights no later than 30 days after
the date of registration of the number of whole shares
allocated to their account;
resolves that the Board of Directors may, if it sees fit,
charge any expenses to the share premium(s), in particular
expenses, duties and fees involved in the completion
of these issuances, and if necessary, deduct from the
amount, the sums required to increase the legal reserve
to one-tenth of the new share capital after each issuance;
resolves that the Board of Directors may not, unless
approved by the General Meeting, use this authorization
as from the submission of a tender offer on the Company’s
shares by a third party and until the end of the tender
offer period;
resolves that this delegation cancels the delegation
of the same nature granted by the Combined General
Shareholders’ Meeting of May 23, 2019 in its seventeenth
resolution.
2)
3)
4)
5)
6)
7)
The authorization thus granted to the Board of Directors is
valid for twenty-six months from the date of this General
Meeting.
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❘
Nineteenth resolution
Delegation of powers granted to the Board of Directors to
increase the share capital by issuing shares or equity securities
giving access to other equity securities or giving entitlement
to the allocation of debt securities as well as to the securities
giving access to equity securities to be issued, up to a maximum
of 10%, to remunerate contributions in kind of shares or equity-
linked securities
6)
resolves that this delegation cancels the delegation
of the same nature granted by the Combined General
Shareholders’ Meeting of May 23, 2019 in its eighteenth
resolution.
The authorization thus granted to the Board of Directors is
valid for twenty-six months from the date of this General
Meeting.
The General Meeting, after review of the report of the Board
of Directors and the special report of the Statutory Auditors:
❘
Twentieth resolution
1) delegates to the Board of Directors, pursuant to the
provisions of Article L. 22-10-53 of the French Commercial
Code, the powers necessary to increase the share capital
by issuing shares and/or equity securities giving access
to other equity securities or securities giving entitlement
to the allocation of debt securities of the Company and/
or securities giving access to equity securities to be issued
by the Company, up to a maximum of 10% of the share
capital, based on the report by the Statutory Auditor(s)
(Commissaire(s) aux apports), to remunerate contributions
in kind granted to the Company and made up of equity
securities or securities giving access to the share capital,
where the provisions of Article L. 22-10-54 of the French
Commercial Code are not applicable;
2)
resolves that the Board of Directors will have full powers
to implement this delegation, in particular to determine
all the terms and conditions of the authorized transactions
and, in particular, to evaluate the contributions and the
granting, where applicable, of specific benefits, to set
the number of securities to be issued to remunerate
the contributions, and the dividend bearing date of
the securities to be issued, to charge, if necessary, any
expense against the contribution premium(s), and in
particular that of the costs, resulting from the completion
of the issuances, to record the completion of the capital
increase and amend the by-laws accordingly, and more
generally take all necessary measures and enter into
any agreements, carry out all the formalities required, in
particular for the admission to trading of the shares;
3)
resolves that the maximum nominal amount that may be
issued under this delegation will count towards the overall
nominal amount for capital increases of €12 million set in
the fourteenth resolution of this General Meeting;
4) notes, as necessary, that this delegation will act
automatically as a waiver by shareholders of their
preferential subscription rights to equity securities to
which the securities that may be issued on the basis of
this delegation may give entitlement;
5)
resolves that the Board of Directors may not, unless
approved by the General Meeting, use this authorization
as from the submission of a tender offer on the Company’s
shares by a third party and until the end of the tender
offer period;
Authorization granted to the Board of Directors to allocate
Company shares to corporate officers (mandataires sociaux)
and employees of the Company and its affiliated companies,
entailing automatically that shareholders waive their
preferential subscription rights
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, pursuant to the
provisions of Articles L. 225-197-1 et seq., L. 22-10- 59
and L. 22-10-60 of the French Commercial Code, to carry
out free share allocations, on one or several occasions,
of existing Company shares or shares to be issued, for
employees or certain categories of employees that it
will determine from among eligible employees and
corporate officers (mandataires sociaux) of the Company
or its affiliated companies, within the meaning of
Article L. 225-197-2 of the French Commercial Code;
2)
3)
4)
5)
resolves that the Board of Directors will determine the
identity of the beneficiaries of the allocations as well as
the conditions and criteria for allocating the shares;
resolves that the total number of free shares allocated
may not exceed 1.5% of the Company’s share capital
on the date the allocation is decided by the Board of
Directors, it being specified that this amount does not
take into account any adjustments that may be made
in accordance with applicable laws and regulations and,
where applicable, with contractual provisions providing
for other cases of adjustment, to preserve the rights of
holders of securities or other rights giving access to the
share capital. To this end, the General Meeting authorizes,
as necessary, the Board of Directors to increase the share
capital by incorporation of reserves in the appropriate
amount;
resolves that the maximum number of shares that may
be granted to corporate officers (dirigeants mandataires
sociaux) pursuant to the AFEP-MEDEF’s Corporate
Governance Code for listed companies may not represent
more than 35% of the overall amount authorized by the
present Meeting;
resolves (a) that the allocation of the shares to their
beneficiaries will become definitive at the end of a vesting
period, the duration of which shall be determined by
the Board of Directors, (b) that the vesting of the shares
granted will be subject to a continued employment
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6)
condition defined by the Board of Directors, no share
may be vested by the beneficiaries if the continued
employment condition is not met and (c) that the
beneficiaries must, if the Board of Directors deem it useful
or necessary, hold said shares for a period determined at
the Board of Directors' discretion, it being specified that
the total duration of the vesting periods and, if applicable,
the holding periods shall be set in compliance with the
minimum conditions provided by law ;
resolves that the acquisition of the shares will be subject
to a performance condition based on (1) a growth rate of
the Company’s net earnings per share, determined by
the Board of Directors, consistent with the growth rate
included in the multi annuals objectives published by
the Company and reminded in paragraph 3.2 “Financial
Objectives” of the Annual Report and/or a specific target
or targets to the beneficiary’s brand, if appropriate. This
performance condition will be assessed over an average
period of 3 years. The Board of Directors will set a
minimum level of achievement below which no shares
may be acquired by the beneficiaries;
7) also resolves that, in the event of the beneficiary’s
disability, as classified in the second or third of categories
provided for in Article L. 341-4 of the French Social
Security Code, the shares will be definitively allocated
before the end of the vesting period. The shares will be
freely transferable as from their delivery;
8) notes that this authorization will act automatically as a
waiver by shareholders, to the benefit of the beneficiaries
of the shares, of their preferential subscription rights to
shares that may be issued under this resolution;
9) delegates all powers to the Board of Directors, with the
right to delegate under the legal and regulatory conditions,
to
implement this authorization, under the above
conditions and within the limits authorized by applicable
texts and in particular, to set the terms, conditions and
criteria (including in respect of performance) for the
share allocations that would be carried out under this
authorization, the vesting dates of the new shares, to
take all measures, if necessary if it so decides, to carry out
any adjustments to protect the rights of the beneficiaries
of the free share allocations, to record the completion of
the capital increases, to amend the by-laws accordingly,
and more generally, complete all formalities required for
the issuance, listing and financial servicing of the shares
issued under this resolution and do anything that is useful
and necessary within the framework of applicable laws
and regulations;
10) resolves that this authorization cancels, as from today,
for the part not yet used, the authorization of the same
nature granted by the Combined General Shareholders'
Meeting of May 22, 2018 in its seventeenth resolution
and is valid for a period ending at the end of the General
Meeting called to approve the financial statements for the
year ending December 31, 2022.
❘
Twenty-first resolution
Authorization of the Board of Directors to increase the share
capital for the benefit of members of a corporate savings plan,
without preferential subscription rights
The General Meeting, 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) delegates to the Board of Directors its authority to
increase the share capital of the Company, in one or
several transactions, at its sole discretion, by a maximum
nominal amount of €1.5 million through the issue of new
shares or other securities giving access to the Company’s
share capital 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 Article L. 225-180 of the French Commercial Code and
Article L. 3344-1 of the French Labor Code;
2)
3)
4)
5)
resolves to eliminate the preferential subscription rights
of shareholders 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;
resolves that the maximum nominal amount that may be
issued under this delegation will count towards the overall
nominal amount for capital increases of €12 million set in
the fourteenth resolution of this General Meeting;
resolves 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. However,
the General Shareholders’ Meeting expressly authorizes
the Board of Directors, if it deems it appropriate, to reduce
or cancel the above-mentioned discount, within the legal
and regulatory limits, in order to take account of, inter
alia, the legal, accounting, tax and social security rules
applicable locally;
resolves 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 Company’s share
capital, 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%;
6)
resolves that the Board of Directors may provide for,
pursuant to Article L. 3332-21 of the French Labor Code,
the free allocation of shares or other securities giving
access to the Company’s share capital to be issued or
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7)
8)
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;
resolves that the characteristics of the other securities
giving access to the Company’s share capital will be
determined by the Board of Directors according to the
conditions laid down by the regulations;
resolves 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 the share
capital, under 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 share capital increase in
the amount of shares effectively subscribed for, to make
all necessary arrangements to carry out the share 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 share capital increases from the
premiums relating to these increases as well as the sums
necessary to increase the legal reserve to one tenth of the
new share capital after each increase;
9) decides that this authorization cancels all previous
authorizations relating to share capital increases reserved
for members of corporate savings plans, and in particular,
that granted by the General Shareholders’ Meeting of
May 26, 2020 in its sixteenth resolution.
The authorization thus granted to the Board of Directors is valid
for twenty-six months from the date of this General Meeting.
❘
Twenty-second resolution
Delegation of authority granted to the Board of Directors
to increase the share capital for the benefit of a category
of beneficiaries, without preferential subscription rights
The General Meeting, having reviewed the report of the Board
of Directors and the special report of the Statutory Auditors,
pursuant to the provisions of Articles L. 225- 129- 2 and
L. 225-138 of the French Commercial Code:
1) delegates to the Board of Directors its authority to
increase the share capital of the Company, in one or
several transactions, at its sole discretion, by a maximum
nominal amount of €1.5 million through the issue of new
shares or other securities giving access to the Company’s
2)
3)
4)
5)
6)
share capital, reserved to the category of beneficiaries as
defined below;
resolves that the maximum nominal amount that may be
issued under the present delegation will count towards
(a) the overall nominal amount for capital increases of
€12 million fixed in the fourteenth resolution of this
General Meeting and (b) the maximum nominal amount
fixed in the twenty-first resolution;
resolves to cancel the preferential subscription rights
of the shareholders to the shares to be issued or other
securities giving access to share capital and securities
to which these securities give entitlement to be issued
under this resolution and to reserve the subscription
rights to the category of beneficiaries having the
following characteristics: (i) any entity held by a bank
or any bank, which participates, at the request of the
Company in the implementation of a structured offering
for employees and corporate officers
(mandataires
sociaux) of companies related to the Company under the
conditions set out in Articles L. 225-180 and L. 233- 16 of
the French Commercial Code, and having their registered
(ii) and/or employees and
office outside France;
corporate officers (mandataires sociaux) of companies
related to the Company under the conditions set out
in Articles L. 225- 180 and L. 233-16 of the French
Commercial Code, and having their registered office
outside France; (iii) and/or collective investment vehicles
(OPCVM) or any other employee shareholding vehicle
invested in the Company’s securities, irrespective of
whether it is a legal entity, the unitholders of which will
be the persons referred to in (ii) above;
resolves that the subscription price for the new shares
will be at least 80% of the average listed price of the
Company’s share on Euronext Paris on the 20 trading
days preceding the day of the corporate decision setting
the opening day of the subscription period carried out
on the basis of the twenty-first resolution. However, the
General Shareholders’ Meeting expressly authorizes the
Board of Directors, if it deems it appropriate, to reduce
or cancel the above-mentioned discount, within the legal
and regulatory limits, in order to take account of, inter
alia, the legal, accounting, tax and social security rules
applicable locally;
resolves that the characteristics of the other securities
giving access to the Company’s share capital will be
determined by the Board of Directors according to the
conditions laid down by the regulations;
resolves 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, set the list of beneficiaries of the cancellation of
the preferential subscription rights within the category
defined above and the number of shares to be subscribed
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7
by each of them, to determine the opening and closing
dates for subscriptions, 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 share capital increase in the amount
of shares effectively subscribed for, to make all necessary
arrangements to carry out the share 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 share capital increases from the
premiums relating to these increases as well as the sums
necessary to increase the legal reserve to one tenth of the
new share capital after each increase.
The delegation thus granted to the Board of Directors is valid
for eighteen months from the date of this General Meeting.
❘
Twenty-third resolution
Five-for-one stock split
The General Meeting, after the reading of the report of the
Board of Directors, hereby decides to divide the par value
of the Dassault Systèmes share by five. Consequently, the
General Meeting:
1) decides that the par value of the share will be decreased
from €0.50 to €0.10;
2) decides that the number of outstanding shares will
be multiplied by five while the share capital remains
unchanged;
3) decides that each share of a par value of €0.50 comprising
the share capital on the date of the stock split will be
replaced by five shares of a par value of €0.10 each,
in
without this exchange resulting
the current relationship between the Company and
its shareholders and, where applicable, between the
Company and any holder of rights or securities giving
access to its share capital;
in any change
4) acknowledges that the stock split and the corresponding
allotment of new shares to shareholders do not impact
the rights of the shares as set forth in the Company’s
by-laws; the new shares will have the same rights as the
former shares that they replace, particularly with respect
to shares that have been held in registered from for at
least two years that will keep their double voting rights;
5) gives any and all powers to the Board of Directors, with
the right of sub delegation under the conditions provided
by law, to:
a) set, within 12 months following the date of this General
Meeting, the date of this split in par value;
b) determine as of such date the exact number of new
shares of a par value of €0.10 to be issued in relation to
the number of existing shares of a par value of €0.50
and to exchange the new shares against existing shares;
c) make any necessary adjustments brought about by
this split, particularly with respect to (i) adjustments
in the number of shares that may be delivered to
the beneficiaries of subscription or purchase options
awarded prior to the stock split as well as in the
exercise price of these options and (ii) adjustments in
the number of shares granted to certain employees and
officers prior to the stock split;
d) amend article 6 “Share capital” of the by laws; and
e) carry out all formalities and more generally do
everything useful or necessary, either directly or
through a duly authorized agent, in order to implement
this decision.
Ordinary and Extraordinary General Meeting
❘ Twenty-fourth 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.
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CROSS-REFERENCE TABLES
Annual Financial Report
The cross-reference table below allows to identify the information included in the Annual 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 Annual Report
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
Paragraphs
4.2.1
4.1
Annual Report
Pages
154
106
See Annual management report cross-reference
table below
-
4.2.3
4.1.2
4.1.1 – Note 27
3
178
148
146
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ANNUAL REPORT 2020 DASSAULT SYSTÈMES Cross-reference tables
7
Annual management report
The cross-reference table below identifies in the Annual Report 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 et seq. of the French Commercial Code.
Annual management report
1.
2.
3.
4.
5.
6.
7.
8.
9.
Business Trends Analysis
Analysis of Results
Financial Operations Analysis
Description of Main Risks and Uncertainties
Financial Instruments Use
Risk Factors such as Pricing, Credit, Liquidity in Cash and Treasury
Information Required by the Article L. 225-211 of the French Commercial Code, Relating to the
Shares Repurchases
Situation during the Fiscal year 2020
Foreseeable Trend of the Situation
10. Substantial Events Occurred since the End of 2020
11. Research and development activities
12. Existing branches
Annual Report
Paragraphs
Pages
3.1
3.1
3.1
1.9
86
86
86
39
4.1.1 – Notes 2, 21
112, 138
1.9.2
6.2.4
45
245
3.1, 4.1, 4.2
86, 106, 153
3.1.1.1, 3.2
86, 102
4.2.1 – Note 23
1.5
6.1.1.6
175
31
240
13. Business and Results of Operations of the parent company Dassault Systèmes SE
1.4, 1.6, 4.2
18, 34, 153
14. Business and Results of the parent company’s Subsidiaries during the Fiscal Year 2020
1.4, 1.6.2
15. Financial and non-financial key performance indicators
16. Selected Financial Information of Dassault Systèmes SE over the Last Five Fiscal Years
17. Employees’ Involvement in the Capital of the Issuer the Last Day of the Fiscal Year
18. Declaration of extra-financial performance
1.7, 2
4.2.2
6.3.1
2
18, 35
36, 47
177
247
47
19. Equity Holdings or Controlled Companies, Subsidiaries with a French Head-Office
4.2.1 – Notes 1, 24
157, 176
20. Table of Transactions in the Company’s Shares by the Management of the Company
5.3
233
21.
Information on the Payment Cycles for Suppliers and Customers
4.2.1 – Notes 13, 19
166, 173
22. Report on Corporate Governance
23. Dividends Paid over the Last Three Fiscal Years
24. Evolution and repartition of the shareholding (including treasury shares)
25. Financial risks linked to climate change and measures taken to reduce them through the
implementation of a low-carbon strategy
26. Main characteristics of internal control procedures and risk management procedures
27. Vigilance plan
5.1
7.1.1
6.3.1
2
5.2
2.6
186
256
247
47
229
67
277
DASSAULT SYSTÈMES ANNUAL REPORT 20207 7 Cross-reference tables
Cross-reference table including the Delegated Regulation no. 2019/980 – Annex 1 items
The cross-reference table below identifies the information included in the Annual Report and mentioned in the Delegated
Regulation no. 2019/980 dated 14 March 2019, in its Annex 1
European directive – Annex 1 items
1.
PERSONS RESPONSIBLE, THIRD PARTY INFORMATION, EXPERTS REPORTS AND
COMPETENT AUTHORITY APPROVAL
1.1 Name and function of the persons responsible
1.2 Declaration of the persons responsible
1.3 Persons acting as expert
1.4 Declaration regarding information sourced from third party
1.5 Declaration regarding the competent authority approval
2.
3.
4.
STATUTORY AUDITORS
RISK FACTORS
INFORMATION ABOUT THE ISSUER
4.1
Legal and commercial name
4.2 Place of registration, registration number and legal entity identifer
4.3 Date of incorporation and length of life
4.4 Domicile and legal from, legislation under which the issuer operates, its country of
incorporation, address, telephone number of its registered office and website
5.
BUSINESS OVERVIEW
5.1 Principal activities
5.2 Principal markets
5.3
5.4
Important events in the development of the issuer’s business
Strategy and objectives
5.5 Information regarding the extent to which the issuer is dependent, on patents or
licenses, industrial, commercial or financial contracts or new manufacturing
process
5.6 Basis for any statements made by the issuer regarding its competitive position
5.7 Investissements
6.
ORGANIZATIONAL STRUCTURE
6.1 Brief description of the Group
6.2
List of the significant subsidiaries
OPERATING AND FINANCIAL REVIEW
CAPITAL RESOURCES
REGUALTORY ENVIRONMENT
7.
8.
9.
10. TREND INFORMATION
11. PROFIT FORECASTS OR ESTIMATES
Annual Report
Paragraphs
Pages
Not applicable
Not applicable
5.4
1.9
6.1.1
6.1.1.2
6.1.1.3
6.1.1
1.4.1
1.4.2
None
1.4.1
1.9
1.4.1, 1.5
1.5.4
1.6.1
1.6.2
3.1
3.1.4
1.9.1.4
1.9.1.1
3.2
3
3
1
237
39
240
240
240
240
20
23
20
39
20, 31
32
34
35
86
101
40
39
102
12. ADMINISTRATIVE, MANAGEMENT AND SUPERVISORY BODIES AND SENIOR
MANAGEMENT
12.1
Information relating the Board of Directors and Senior Management
5.1.1, 5.1.2
187, 205
12.2 Administrative, Management and Supervisory Bodies and Senior Management
Conflicts of Interests
13. REMUNERATION AND BENEFITS
13.1 Amount of remuneration paid and benefits in kind
5.5
5.1.4
13.2 Amount set aside or accrued to provide pension, retirement or similar benefits
5.1.4 – Table 11
237
211
218
278
ANNUAL REPORT 2020 DASSAULT SYSTÈMES 14. BOARD PRACTICES
14.1 Date of expiration of the current term of office
14.2 Service contracts with the issuer
14.3
Information about the Committees
Cross-reference tables
7
5.1
5.1.1.1
5.5
5.1.1.3
186
187
237
202
14.4 Statement of compliance with the regime of corporate governance
5.1, 5.1.6
186, 225
14.5 Potential material impacts on the corporate governance, including future changes in
the Board and Committees composition
15. EMPLOYEES
15.1 Number of employees
15.2 Shareholdings and stock options
15.3 Arrangement involving the employees in the issuer’s capital
16. MAJOR SHAREHOLDERS
16.1 Shareholders having more than 5% of interest in the issuer’s capital or of voting
rights
16.2 Existence of different voting rights
16.3 Control of the issuer
16.4 Arrangement, known to the issuer, the operation of which may at a subsequent
date result in a change in control of the issuer
17. RELATED PARTY TRANSACTIONS
18. FINANCIAL INFORMATION CONCERNING THE ISSUER’S ASSETS AND LIABILITIES,
5.1
2.3.1
186
50
5.1.1, 5.1.5
187, 219
None
6.3
6.3.1
6.1.2.3
6.3.2
6.3.3
247
247
242
249
250
4.1.1 – NOTE 26, 4.2.4,
7.1.4 145, 183, 258
FINANCIAL POSITION AND PROFITS AND LOSSES
18.1 Historical Financial Information
18.2
Interim and Other Financial Information
18.3 Auditing of Historical Annual Financial Information
18.4 Pro forma Financial Information
18.5 Dividend Policy
18.6 Legal and Arbitration Proceedings
18.7 Significant Change in the Issuer’s Financial or Trading Position
19. ADDITIONAL INFORMATION
19.1 Share Capital
19.2 Memorandum and By-laws
20. MATERIAL CONTRACTS
21. DOCUMENTS AVAILABLE
4.1, 4.2
106, 153
3.3
103
4.1.2, 4.2.3, 4.2.4 148, 178, 183
Not applicable
7.1
4.3
3.1
256
184
86
6.2, 6.3
244, 247
6.1.2
1.4.3
6.1.1.7
241
30
241
279
DASSAULT SYSTÈMES ANNUAL REPORT 20207 7 Cross-reference tables
Text of the Draft Resolutions Proposed by the Board of Directors to the General Meeting of May 26, 2021
SASB Cross-reference table
The cross-reference table below identifies the information included in the Annual Report and related to SASB materiality map for
Software & IT Services.
Dimensions
Human capital
Paragraphs
Pages
Employee engagement, diversity & inclusion
2.3 Social responsibility
Social Capital
Customer privacy
Data security
Environment
Energy management
Leadership & Governance
Competitive behavior
Systemic risk management
2.4.1 Digital responsibility
2.4.1 Digital responsibility
2.5.3 Climate strategy: operations
2.6 Business Ethics and Vigilance Plan
1.9 Risk factors
50
56
56
63
67
39
280
ANNUAL REPORT 2020 DASSAULT SYSTÈMES
2
0
2
0
2018/2019/2020
Universal Registration Document