Dassault Systemes SE

PAR:DSY

Earnings Call Transcript 2019-Q2

[François-José Bordonado]

Good morning, everyone. I'm François Bordonado from Dassault Systèmes Investor Relations team. From the company, we have Bernard Charlès, our Vice Chairman, Chief Executive Officer; and Pascal Daloz, Executive Vice President, Chief Financial Officer and Chief Strategy Officer. I would like to welcome you to Dassault Systèmes Second Quarter 2019 Earnings Presentation which is also being webcasted. At the end of the presentation, we will take questions from participants on the -- and from the audience and on the webcasted call. Later today, we will also hold a conference call. Dassault Systèmes financial results are prepared in accordance with IFRS. In addition, we have provided supplemental non-IFRS financial information. For an understanding of the differences between the two, please see the reconciliation tables included in our press release. Some of the comments we'll make during today's presentation will contain forward-looking statements, which could differ materially from actual results. Please refer to our risks factors in our 2018 Document de Référence. Let me now hand over to Bernard Charlès, Vice Chairman and Chief Executive Officer.

[Bernard S. Charlès, Vice Chairman & CEO]

Good morning, everyone. This is an exciting time with all the activities going on for Dassault Systèmes. Okay. Sorry for that. I know you have read by now the press release and you have noticed that the revenue -- all the numbers are on the top of the guidance, so we want to keep that discipline. So congratulations, Pascal. The total revenue is up 13%. Organic software growth is up 9%. And we've continued to have in our core industries as well as in diversification double-digit growth of new licenses. Noticeable this quarter, Transportation & Mobility. The reason why we mention it is because there were a lot of question related to the production volume going down, specifically the China situation. For us, we observed a strong dynamic. Why? For a simple reason, Dassault Systèmes provides collaborative platform to create the portfolio that you will see on the market in 5 to 6 years from now. So that's the focus we have. The second thing is we provide digital manufacturing to really continue to improve and reduce cost of manufacturing, increase the quality and improve the value chain performance. So it looks like in contradiction with what is published on the sector dynamic for volume production, but it's not at all in contradiction. It's aligned because it's about innovation. Same in Aerospace & Defense, double-digit growth. Home & Lifestyle, as you know, with the move to buy Centric PLM, we are really creating a mainstream product life cycle management for apparel and retail, Home & Lifestyle. We have, with Centric PLM, announced many, many wins, significant wins around the globe. Wins like, of course, the LVMH Group, Kering and many others, top brands, Moncler, for example, in France and many others around the world, China. So this new brand for Dassault Systèmes is progressing very well. The EPS is up 20%. I think if you look at those numbers in context of our strategy implementation, both from a purpose as well as strategy, social, industry, experience, I think we have good illustrations about the fact that we are walking the talk to make it simple. Cloud adoption is very good. We announced on the -- illustrated this possibility to create cars, new vehicles like last-mile delivery vehicles with the Renault Group, all on the cloud. It's really a new way to organize the collaborative development on production of new categories of products or new categories of customers creating new categories of companies not -- for example, Amazon Prime for delivery and others. And we are confirming on upgrading the full year '19 guidance. Pascal will come back on the correspondence of all of these numbers in a moment. We are also very pleased, by the way, to confirm to you that the plan we announced for -- that Thibault announced with me in 2014 for doubling EPS over 5 years. I think we are going to achieve it. And this result, taking into account Medidata. So 5-years plan has been working. And we, I'm sure, next year at some point in time, will come back with an update providing the evolution of the scope. The diversity of industries is accelerating, the diversification but also diversity within industry. This is just an illustration of so many innovation programs going on around the world, where we are at the center of this innovation, FabLabs, on new capacity from industries to do innovation. The core of what we believe is a sustainable double-digit growth is the platform phenomenon for business. We call it the 3DEXPERIENCE platform. It's not an IT view of the world. It's a collection of services on the cloud or on private cloud, we call it On-Premise, for clients to connect all the actors that are contributing to the innovation process, engineering process, production process and even sales and marketing. Platform phenomenon is known for consumers, it's happening for companies. Again, for us, there are 2 aspects with it, which we believe are fundamental for the next 20 years. One, the platform has a system of operations to develop highly complex products and the platform to create new business models. I will, in a moment, illustrate to you how this is happening in the market. Platform is game-changer for the entire industry in the world and it's visible in our numbers. And for those of you who were looking at the 3DEXPERIENCE as an update of software as compared to V5, it's much more profound than that. It's a game-changer for all industries. Why so? Because the process for collaboration is changing. We have, in our platform, tools which are as easy as WhatsApp, Slack, Messenger, all integrated in a secured way for collaboration. And it's as simple to use on mobile as those you know when you exchange with your friends. But as you know, those software, which are used for consumers, are not accessible for the businesses. No IP protection and no security and no connection between the systems. Our platform does it all in an integrated way. And that's big for the next 20 years. You see here an illustration of what it means. Connecting that to the purpose, it's about a game-changer of the platform to do sustainable innovation, harmonize product, nature and life. On that aspect, we see it happening in all types of industries, Transportation & Mobility with electrification, autonomous vehicle. Whether it's fully autonomous or not, it's not really relevant. But the robotization of smart equipment in our lives is here and here for the long term, which means automatization, the using it or -- increasing safety and many more. You see it also in compliancy and certification to have secured environment. You see it in the fundamental technology like battery technology. You see it in a new type of categories of vehicle or even flying systems, drones and so on. And you see it in the new production systems, smart productions. We are doing far more than Industry 4.0. We are creating what we call on-demand, real-time, flexible, highly autonomous production systems, where people inside the company, inside those plants, are at the center of the optimization. So people is at the center, not the automation. You hear anecdotes recently about many companies, where they have presented that this was important. It's about knowledge and know-how, what we call the Workforce of the Future. We were very proud with PSA to be recognized as the #1 of 8,000 suppliers to have led them transform their company. And I saw their results last year, billions of profit. I think we are something there on the results up there, when they have systematically adopted the platform. It's important to notice that even the speed at which the platform was deployed across OPEL in less than 18 months is probably -- has been never seen in the sector up to now, never seen, which shows that the platform phenomenon is something which is very profound for the future of the industrial [indiscernible] we call it Industry Renaissance. We continue to have a very strong dynamic in China with big players. Here, it's GAC Group. And it's a large installation and they use the platform as a common language to really power all the current legacies that they have, step one, and then step-by-step replace the legacy systems there. So the platform is inserted, connecting all elements together and then creating the digital pipeline for the future. I've already mentioned Renault innovation group called -- where they have been developing very, very innovative vehicles for last-mile delivery and for other activities, clean vehicle, twin vehicle, all on the cloud. So people are getting the perception that cloud is good for action, social network and so on. It can work for the industry. It does work for the industry. Of course, we will do edge computing. What we call edge computing, computing aside for plants. Because when you do real-time control of a plant, you cannot do it through the cloud, you have to be localized. So we are doing both cloud, edge and mobile. The architecture that we have at Dassault Systèmes is absolutely unique for that. In Aerospace & Defense, we continue to concentrate on production system, the performance of production systems and quality with the rate, the backlog of airplane which are on order is -- has never been as high. So they need to be produced, managing the complexity with smart systems. And this is what we call cyber systems, integrating software, hardware and mechanical systems. Supply chain moving to value chain, you remove the players which are not contributing to the value production. And aftermarket as well as a lot of startups in the sector, it's unbelievable.[Presentation]

[Bernard S. Charlès, Vice Chairman & CEO]

Connecting electronics, cyber systems, mechanical and all other systems together, that's the 21st century industry because everyone knows that all products we are going to use in our daily lives, in medical, in house and so on, are going to be smarter and smarter. And they need to be more sustainable, of course. But this integration that has been costing billions for the industry must be done at the platform level with a multidiscipline, collaborative approach. We are very pleased to allow our sister company, Dassault Aviation, adopting for all programs globally all 3DEXPERIENCE. They were the first to start with what we call V6 at that time. They were the first customer in the world. And they have created very innovative processes and systems. And now by adopting the 3DEXPERIENCE platform, they are going further because what they want to do is AI-based, data-centric services to their clients, which means new type of services, for example, availability of system in operations, predictably for maintenance. So we have the AI and big data technology in the platform to address needs that are used with some other solutions up to now that will make them point solution as compared to platform integration. This is coming from the EXALEAD technology, if you remember, some of you following us. So this advanced approach is transforming the nature of service the companies can provide to their final clients, in this case in the military sector. Boom aerospace, they want to do a supersonic business jet. They started the prototype with SOLIDWORKS and they have decided to adopt the 3DEXPERIENCE platform to go for the official products. So it's quite interesting because it's a startup. Not a lot of people creating amazing innovation and using the platform with suppliers to connect everyone together in a consistent way. So it's a showcase that shows that startups are changing the game for many of the sectors. High Tech is also evolving both from experience, nature of products which are produced as well as, of course, fast integration of new technology because it costs a lot to do this substitution for them of new component when the technology is evolving. And they want to create affordable products for people. There is a connection, by the way, with med tech that need to be understood. We are one of the first player in the med tech sector, what they call personalized equipment on the connection for the future of health care system, where med tech equipment are connected with biologics, is going to be an important factor topic that we will come back with Pascal in October, I think, after the Medidata -- this finalization [indiscernible].Cyber is so important. Cyber has been used for military. Cyber is civilized. Cyber is about controlling smart systems to provide the proper services to people in plants, in real life, on daily activities. So cyber system is at the very core of the future of our CATIA 3DEXPERIENCE solutions, integration of software, smart systems, big data and AI with physical systems, mechanical system, hydraulic system and so on. So the cyber system, we are in a very unique position after the acquisition of No Magic. This is used massively by DoD on many -- DOG -- DOE, Energy, in America and many other sectors. And it's a game-changer because it's about integration of all parts. This is an illustration, please watch it. [Presentation]

[Bernard S. Charlès, Vice Chairman & CEO]

[indiscernible] of cyber system, the future of CATIA is cyber system to be very simple and clear. And this is what we are doing now. On the simulation, of course, multiphysics is important. This is an illustration with Fuji Xerox doing full simulation of reducing massively the number of physical prototyping in this kind of highly sophisticated technology integration. Now if we look at the purpose, harmonizing product, nature and life, Construction, Cities & Territories are very core to Dassault Systèmes' future. How do we do the digital twin experience of a city, the infrastructure, the way communication, health are provided as systems are provided, services. How all mobility of people and goods are organized, are part of what we call the game-changer approach for a platform-based environment for development of cities. Here is another... [Presentation]

[Bernard S. Charlès, Vice Chairman & CEO]

[indiscernible] because we are not convinced our hometown that this will use the same approach. But this is game-changer, as you can imagine, because many of the agencies are not -- are having a hard time to connect to each other. It's highly complex. It's one of the most complex things, a city. When you look at people, goods on the way, quality of life, distribution of energy and all services should be organized. It's, of course, done with extreme cost today. It can be reduced. And that's what we are playing here, which is basically the old sector was called AEC, Architecture, Engineering & Construction. But we think that we are taking an approach which is very holistic, which is really a global approach whereby the building is only one piece, it's one part of a more complex system. And that's the game-changer approach that we want to have in what we call Construction, Cities & Territories. And it's working quite well with Singapore, now Hong Kong, Shenzhen. A section of Shenzhen is also being done this way and there are more coming in this area. Of course, the decision process are a little bit different than it is for B2B. But in certain countries, the city decision can be organized like a business. When it's too political, it does not work. On the education, we also continue to have a very strong focus with here, the showcase of Southern California Institute of Architecture.[Presentation]

[Bernard S. Charlès, Vice Chairman & CEO]

Not only a question of political game, it's a question of imagination. And really the fact that all businesses can imagine new solutions will be at the core of a more sustainable, circular economy. Because today, it's quite fragmented and the platform phenomenon for business is changing that approach. On the Medidata, we have announced our motivation to acquire the company. It's a big move for us, an expensive one too, and we believe that there are good rationale for this to be done and we need to go through the process. And Pascal might add a few things in a moment on this. But what we observed is that if you look at the full cycle -- life cycle for all discovery of new biologic, it's a very long cycle. Drug development is about 10 years. Cost of development is roughly about EUR 3 billion each time for each molecule. Success rate is lower than 10%, think about it. It's like if we are doing 10 airplanes and only 1 would fly and underperforming -- underperformance about 50%. So I think there is something to do here in the way the collaborative process is done, the way modeling simulation is providing new value to it and the way clinical trial can provide higher visibility for this to be better integrated. So that's what we have concluded we should do with the 2 co-Founder, Tarek and Glen. And they are highly motivated to -- for us to be together to really be game-changer at the beginning of this 21st century in that sector. So that's the motivation we have here. Basically, we take the same systematic approach. What is happening between the time you imagine a solution and the time you go through all the processes to deliver the solution and a solution that will be safe, efficient. The efficacy of medicine is very important and also ensuring alignment, compliancy with the way the practices are implemented in the medical sector. So it goes from research discovery, preclinical, what we call ONE Lab, designed to cure, those blue box exist today: license to cure, which is basically collecting the documents to prove that you have done the right things; made to cure, which is about really the way you produce those molecules. And when you look -- and commercialization, of course, and then the implementation of the practices and when you look at this clinical trial is a huge section of this cycle, this [indiscernible] of innovation as is the launch of the products, especially for when it comes to training. And it will be increasing with personalized health when you work with smaller community of patients. So it's very complementary. This is not about synergy. This is about exponentially of creating things that does not exist when we are together. So that's what we have done. And we have also announced that we are investing in a start-up company. And in fact, the founder is a former Dassault Systèmes member, creating a great company called BioSerenity. And we are taking a position there, an investment position. They are doing great things, personalized equipment to do heart surveillance or brain surveillance for people having a hard time to sleep. And we think that this is connected extremely well with med tech on the connection between the life science practices and the real-time acquisition of data, so we can better understand how to improve this environment for people. And of course, it connects with a lot of technology that we master well, IoT. For us, IoT is just an enabler. What you need to do on top of it is really providing the final services. There is a big conference going on, on July 23 and 24 in U.S. with the [ FDA ] to really look at and it's called the Fifth Annual Living Heart Symposium. As you know, we have, with our platform, created the heart model with muscular tissue and electrical signals. It's used in many research activities related to heart surgery and heart disease. And this conference is really extremely well supported by the FDA, with the regulator, which is recommending to do more and more modeling and simulation in this sector. So it happened that it's happening today. And finally, in India, there is a publication of the Global Innovation Index in which we are very much involved on sponsoring also because we think that a lot of the characteristics of our solutions is to change the world of innovation. With that, thank you very much. And I give the floor to Pascal, so he will be revealing to you the secrets behind the numbers.

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

Thank you, Bernard. Good morning to all of you. It's always a pleasure to be here with you at that time before the summer break. And it's even better when you have good news. So I think you noticed that the results, the Q2 results and the first half, are extremely good, not only because we are delivering the high end of the guidance on the top lines and we are exceeding, in fact, the guidance on the bottom, but because the growth drivers, which are supposed to fulfill the growth, are in place. And the cornerstone is really the 3DEXPERIENCE platform. And you have some metrics on this slides. And you see the license growth of the 3DEXPERIENCE platform is exceeding 70% for this quarter. The total software growth for this quarter is 52%. And if you look at for the first half, it's 40% growth of the software related to 3DEXPERIENCE platform and close to 50% for the new license. So those metrics are extremely good. And it's the proof that the 3DEXPERIENCE adoption by the installed base is going on. Zooming on the different regions of the world. Americas is growing nicely, 16% for the first half, 14% for the quarter. It's mainly driven by the direct sales force. And we have large deals going on, especially in aerospace, energy and consumer goods, where the traction is extremely good. Also we have a good contribution of the recurring part of the software. And we have to notice that the U.S. market is probably more advanced in the subscription-based approach compared to the rest of the world. And obviously, you also have the contribution of the acquisition we did last year, namely Centric PLM as well as IQMS, so-called DELMIA WORKS now. And if you look at the organic growth for Americas, we are close to 10%, so which is very good. Europe, 13% for the quarter, 11% for the first half. I will say Europe is, in fact, growing nicely everywhere, except EuroCentral. So if you look at the North, we are growing nicely, more than 30%. If you look at the South and specifically France, we are growing between 15% to 20%. In EuroCentral and Germany, we are growing at 6% for the first half. Asia, 9% for the quarter and for the first half. And almost the same story, we have extremely good growth in China and India, more than 20% for both country. And the rest, Korea, Japan and AP South, Asia Pacific South, is growing a much muted growth between 5% to 10%. So overall, the dynamic is good in all the region of the world despite the macro environments. And I will say the core industry as well as the diversified industry are really fulfilling the growth almost everywhere. If [indiscernible] in Europe, the auto sector is still dynamic for us as well as the aerospace. From a product line standpoint, a few things to notice for this quarter and the first half. The first one is the CATIA. And I'm very proud of CATIA growth, 12% for the quarter, 9% for the first half, overall software. And you remember CATIA is a EUR 1 billion revenue line, so it's significant. And I remember a few years ago, some of you challenging me about the ability of CATIA to grow more than 5% on the long run. Now you have the proof that when the 3DEXPERIENCE platform is deployed and in operations, this has automatically an impact on the ability to grow at double digits. ENOVIA, 14% for the first half, 9% for the quarter, again high double-digit growth. It's pretty in line with the performance of the 3DEXPERIENCE platform. The key point I would like to focus on is the competitive win. Again, same story, a few years ago, I remember some, maybe all of you, challenging us on the ability of -- of ENOVIA to win against Windchill and Teamcenter. And I will give you some statistics for the first half of the year. We have been in 11 times at the last round in a position to fight against PTC Windchill. We won 10 times. We have been 30 times in the final rounds, we're fighting against Teamcenter. We won 26 times. So I think this is a good metric for you to assess the competitiveness of ENOVIA when ENOVIA is combined with the 3DEXPERIENCE platform. The disappointment for the quarter and the first half is coming from SOLIDWORKS, 4% growth. And to understand a little bit, we have to dig into it. So point number one, the revenue is -- the momentum is extremely good in Asia. So the counter-performance, I will say, is coming from Europe and U.S., where we have the large installed base. The recurring part of the revenue is also in line with our expectations. So the takeaway is we are convinced that it's a time to accelerate the adoption of the 3DEXPERIENCE platform by the large SOLIDWORKS installed base we have. You have the proof that with CATIA, when it's happening, we are reenergizing, in fact, the growth. And I think this has to be done with SOLIDWORKS as well. The product plan is done. I mean we are -- on the product side, we are ready. The channel enablement needs to be done and accelerated. This is the game for the second half in order to be ready for the full year. The other software line is growing nicely at 20%, 21% for the first half. And we have good double-digit growth, led by DELMIA as well as SIMULIA. And from a pure organic standpoint, because in this line, you have all the acquisitions, from an organic, we are growing at 15%. So clearly, the fundamentals are also very good in those lines. And it's an interesting quarter because I remember a few years ago, you were challenging us on the fact that the growth was heavily dependent on SOLIDWORKS. Now you have the proof that we have more than only one engine to continue to fulfill the growth. Zooming on the financials. And I will be very quick because you have all the details. So total revenue growth for the first half, 13%, excluding the currency effects, same for Q2. More important is the organic growth. We are delivering 10% organic growth for Q2, 9% for H1. And more important, it's 9% for the software. And if you compare to last year, it's more than 3 points. And I just want to remind you, when we gain 1 point on the recurring part of the software, which represents 70% to 75% of the revenue, this has a significant impact. So -- and you have on the software side the numbers. So if we zoom on the software and we split between license and subscription and support, 13% growth for license for the first half, 12% for the quarter and 7% organic growth and 8% for the first half for the license. More important on subscriptions and support, 12% growth for the quarter and the first half of the year and the organic growth is 9% for both. So clearly, it's an interesting first half because it's almost the first time where more organic growth is coming from the recurring part than the license. And this is again the proof point for you that the subscription is taking off for us. You have a large contribution of the large project we have, Boeing being one of them. The mix is driven also by the 3DEXPERIENCE platform because if you remember, the support and maintenance rate is 2 to 3 points higher compared to the traditional V5. So those factors are really contributing to fulfill this growth. The services is also very dynamic for this quarter. You saw 27% growth, excluding the currency effect, 15% organic growth. We are slightly improving the gross margin because we are still using the subcontractors in order to fulfill all the projects. But I think the key point, going a step forward to the dynamic, is it's the proof point that all the big project we saw last year or 2 years ago, we are deploying them because the services is a good indicators about the quality of the deployment. On the operating margin, it's -- key improvement on the organic activities with more than 220 basis points, which is largely sufficient to offset the dilutions coming from the acquisitions, 120 basis points. And we have a positive impact on the currency, which contributed 40 basis points, so clearly a significant lever on the margins for the first half. And the explanation for the organic part is coming from the mix because the more recurring part you have in the revenue, the better is the EBIT margin. And also again, we are still a bit late in the hiring process, especially on the research and development side. And we expect to catch up because usually in research and development, we are hiring the people in September/October when they graduate in fact. Zooming on the EPS. All the good momentum you have seen on the revenue side and the operating margin side has a direct impact, EUR 0.82. It's EUR 0.04 more than the high end of the guidance we gave to you. And it's not due to the tax because you see that we have a tax rate slightly increasing compared to last year for the quarter as well as for the first half. It's really coming from the better performance in the execution. The cash flow. So the cash flow is, I would say, quite impressive because we have generated last year -- or this first half, sorry, EUR 894 million, which is almost equivalent to what we did last year for the full year. So in half year, we did almost what we did for the full year. And we are landing with a net financial position exceeding EUR 2 billion. In fact, it's EUR 2,093,000,000, which is a good positions compared to what we have to spend for the acquisition of Medidata. And it's also the proof for you that we have good machines to generate the cash to reimburse the debt we're going to raise to fund the acquisition of Medidata. The performance is coming on both sides from the net income as well as the operating improvement on the working capital. So those -- this is also very important for you to understand this. There is only one thing I would like to mention. The DSO has decreased by 2 days. And it's coming from the acquisitions, so specifically Centric PLM as well as IQMS, DELMIA WORKS. And in less than 6 months, we will apply the same disciplines we are applying to the rest of our business to catch up. From a financial objective standpoint, let me give you some data points on Medidata and where we are in the process. So all the antitrust clearance has been received, especially the U.S. and the German one, so it's done. The SEC has approved the proxy statement. So the proxy statement has been sent to the shareholders of Medidata last week. And this is the reason why they have been able to organize the Shareholders' Meeting, August 16. So we expect to have obviously a positive decision from them. If we look at the calendar, we still expect to complete the acquisition in Q4 or possibly in Q3 if all the condition to the closing are satisfied. So if it is in Q3, end of Q3, what I will do, I will announce the Q4 guidance and the full year, taking into account Medidata, into the numbers. I know you have a lot of questions related to the synergy, to the perspective on the long run. Again, do not expect me to answer to these questions today, but I will. And I am asking you to save the date and we will organize a Life Science Day on November 13, 2019 in New York. So most of them will maybe be in New York because the [ ECP ] is organizing the Capital Market Day the day before. But more important, we have our user conference with Medidata at that time. And we really want you to be part of this event because you will have not only the comprehensive presentation on the strategy for the Life Sciences, but I will disclose at that time the long-term plans for Medidata. Coming back to the guidance, a few things. So first of all, we are adjusting the revenue and the EPS, taking into account the currency gains we had in Q2 and the anticipations gain we're going to have in Q3 because we are also aligning Q3 at $1.15 for the exchange rates between the euro and the dollar. It used to be $1.20 previously. This has an impact because it's plus EUR 35 million at the revenue level and plus EUR 0.05 at the EPS level. If we look at the numbers, so on the revenue side, on the top lines, no change, except the currency impact I'm taking into account. On the software growth, again same thing, 10% to 11%. So I'm confirming the guidance for the full year. I did one adjustment, nevertheless, between the license and the recurring. If you remember in the previous guidance, I was guiding the recurring between 9% to 10%, so now I'm aligning on the high end of the range at 10% because we have a good visibility on this. And given the counter-performance of SOLIDWORKS, if you remember, I guide the market previously telling you that it will be between 5% to 10%. So just because I just want -- I do not want to disappoint you, I took into account this into the license. But overall, it's neutral. On the EBIT margin, 32.5% against high end of the range, plus 6 points' improvement compared to last year. And the key point for you is in the previous guidance, I was guiding 80 basis points of improvement. Now it's 100, so it's a little bit better. You still have 120 basis point dilutions coming from the acquisitions. And we have 80 basis points coming from the currency effects, which allow us to land for the EPS at EUR 3.45 to EUR 3.50, which is, as Bernard stated, our commitments we did -- we took 5 years ago. And we are not only proud, but I think it demonstrate to you that when we are stating and we are giving guidance, even if they seem sometimes a little bit long, we are sticking to it and we make it happen. Q3 is well aligned with the consensus for a revenue between the EUR 890 million to EUR 905 million; a growth between 10% to 12%, excluding the currency effect; software growth between 9% to 11%; license, 8% to 12%; and recurring between 9% to 11%; and EBIT margins between 29% and 30%, stable to plus 1 point. I put some flexibility here because I'm still expecting to catch on the hiring side. And this is allowing us to deliver an EPS at EUR 0.70 to EUR 0.74. I -- you noticed that I changed the exchange rate for the dollar at $1.15 for Q3. I kept $1.20 for Q4, so maybe you will see this as being a little bit conservative. But again, I have been fully transparent with the currency gains since the beginning of the year. And usually I'm taking -- I'm giving and reintegrating the currency gains into the guidance. That's it for today. So in conclusion, it's a good quarter. It's a good first half. We are committed to deliver the EUR 3.50 EPS for year 2019. And it's a good start for the next plan, the next plan starting from '18 to 2023, targeting EUR 6 because all the growth drivers are in place to make it happen. So Bernard and I are ready to take the questions. Thank you.

[François-José Bordonado]

[Operator Instructions]

[Laurent Daure, Head of IT Software and Services Research]

It's Laurent Daure from Kepler Cheuvreux. I have 2 questions. The first is going back to your full year guidance, the organic margin development. Basically, you improved by more than 2 points in the first half. Can you comment a bit more on the investment -- the magnitude of investments you're planning for the second half because it seems extremely conservative to look for no improvement, organic in the second half? And the second question is on the recent acquisition, as you have mentioned, Centric, if we could have a little bit of color of the organic growth of the performance in the -- over the first half of this year?

[Bernard S. Charlès, Vice Chairman & CEO]

Pascal?

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

Okay. On the margin for the second half of the year, again, as I told you, I expect to catch up on the research and development side, so -- and this is key because...

[Bernard S. Charlès, Vice Chairman & CEO]

The investment, you mean.

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

The investment, because we are expanding significantly the scope of what we do. We are accelerating the platform development. We are transitioning massively to the cloud. So this is -- I mean, we need to invest in a way to make it happen. So take into account that this will have an impact on the EBIT margin side. I also -- still see a lot of positive momentum for the services. You have seen plus 13% for the first half. And as you may know, the services added create some dilution at the EBIT margin, so this is also the reason why maybe you could consider that a little bit shy. But I took those 2 points into account.

[Bernard S. Charlès, Vice Chairman & CEO]

On the Centric, on IQMS. IQMS is becoming DELMIAWORKS. It's part of the -- on the intent with DELMIAWORKS is to do mainstream ERP for all companies who needs -- who are producing things, that ERP for all type of companies. ERP for the companies producing things where we are we start from what we call manufacturing execution system or manufacturing operation system, and we do all ERP function. We are -- we just closed it in January, so it's a little bit early to provide more insight, and we are really in a built-up mode because as you may remember, we explained that we are building -- expanding the indirect channel called professional solutions, the former SOLIDWORKS channel, to expand the knowledge on the partners to sell indirectly. Most of IQMS sales up to now were direct sales and to go mainstream, we need to set up the channel and it's taking -- it's going to probably take over 1 year to set up this properly, but I think it's an important thing to do. Nevertheless, the direct sales force need to continue to do the job they have to do, but I think the lever for growth is going to come later. I'll let ask Pascal add whatever he wants to do. On Centric PLM, extremely strong dynamic in terms of brand -- prestigious brand acquisition. It's -- we are very pleased with the dynamic going on with that. I don't think we have published much detail but it's a sort of a high -- very high double-digit.

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

Yes. It's something I shared with you about the good dynamics in the lifestyle and home equipments segments. So this segment is growing more than 30%. So with this, you have a good sense with the performance of Centric PLM. A point which is very important for you, you remember, Centric PLM was a license model mainly, and we are progressively transitioning to a subscription model. So this is also an important point for you to notice because the market is really suitable for subscription.

[François-José Bordonado]

We'll take now one question from the call. Adam?

[Operator]

The first question is coming from the line of Adam Wood.

[Adam Dennis Wood, European Technology Equity Analyst]

I've also got a couple, if I could, please. Just -- so coming back to SOLIDWORKS and then the general comments on the macro environment. Could you just maybe talk a little bit about the work when you've looked into that SOLIDWORKS weakness, how you get comfortable that, that's not a kind of forerunner of some macro weakness to come in the rest of the business? You've always identified that as a kind of lead indicator of what's happening. So what reassures you on that? And can you maybe just talk a bit in terms of what you're seeing linked to that with new deals and customers. Is there any increased reluctance to make commitments? I think we've heard other companies talk particularly about Eastern China. If you could just talk a little bit about what you're seeing there and link it back to SOLIDWORKS, that will be really helpful. And then maybe just secondly, on the services business, you talked about a mix of 3DEXCITE and 3DEXPERIENCE revenues driving that. Could you talk a little bit more about what you're doing particularly around 3DEXPERIENCE? Is this actual implementations that you're doing? Or is it also consultancy work that could lead to more projects coming through? Again, just a little bit more color on that would be great.

[Bernard S. Charlès, Vice Chairman & CEO]

Adam, thank you. Related to SOLIDWORKS, the dynamic -- there is still a vibrant community, very positive feedback about the products, the type -- Basically, the users loves it. However, it's clear that we are going through a transition with SOLIDWORKS. The transition is to make it platform-enabled. Our platform is game-changer, and we have what we call Power'By. It's basically a way for SOLIDWORKS users to take the cloud of the 3DEXPERIENCE platform, to do data sharing, PDM functions, collaborative innovation using the platform. The channel is learning how to do that, but we are not there yet. And I think that's swallowing, if I may, so consuming energy from the, what we call now, [ traditional ] channel. So if you add to -- the 2 things together, DELMIAWORKS indirect, platform go-to-market preparation for the channel, the channel is busy. I don't think there is any, Adam, there is any structural issues that you should be concerned with. SOLIDWORKS is really competitive. It's the best solution for design for what we call mainstream sector. It's clear that if we look at the next 20 years, not 5, next 20 years, the lever with platform on DELMIAWORKS, as well, by the way, how SIMULIA works are going to be significant, not add-ons, but digital transformation capabilities for mid-sized companies, and we want to play this properly. That's probably the explanation for the kind of slower, low one-digit growth as opposed to usually 2-digit growth. But I don't think there is anything outside those elements. And we need to go through that transformation when we can afford to go through the transformation as the dynamic of the 3DEXPERIENCE platform is very strong. So that's for SOLIDWORKS, so service -- on service, feel free to add anything.

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

Yes, if I want to complement and give you some high-level numbers. Again, Adam, remember that the dynamic is still very good for SOLIDWORKS in Asia, and especially in China. So SOLIDWORKS, being an early indicator of the macro, this is probably the region of the world where you could expect to have a slowdown, and we are not seeing it. So this is a reason why we came to the conclusion that the explanation is much more what Bernard is saying than the macro per se. Coming to the services, your services questions. It's a good questions. In fact, you have 2/3 of the services dedicated to the deployment of the project, and you have 1/3 dedicated to the high-end consulting we do to -- at the early stage of the project. So clearly -- and the dynamic is good on both.

[Operator]

The next question is coming from the line of Stacy Pollard.

[Stacy Elizabeth Pollard, Head of Software and IT Equity Research]

Just on the 3DEXPERIENCE platform. Now that's been a differentiator for you to win a number of large deals. Do you think any of your competitors have anything similar? Or who is the furthest along in terms of developing something like it? And then second question, kind of following on that. Given the many large deals that you had, plus that 3DEXPERIENCE platform adoption, do you think this has improved your longer-term visibility, obviously, in recurring, but any color you can give there? And then, may I ask a quick third one just to follow-up on China. Can you maybe talk about industry verticals that were sort of strong or weak, or relatively strong or weak?

[Bernard S. Charlès, Vice Chairman & CEO]

Thank you for the question. 3DEXPERIENCE platform itself is a very significant differentiator, and I don't notice any of the current players in the industry being even close to what we have. And I think the gap is not going to reduce. It's going to expand significantly. Our intent is very clear. The 3DEXPERIENCE platform is inclusive. That's been used by everyone that can use a Facebook or WhatsApp or a Slack will use the 3DEXPERIENCE platform. Believe it or not, and I can show it to you. We will show it to you, real version in February when we have a bit more time to do it. So its inclusiveness to connect with everyone in the company makes it so differentiating. On the mobile, I use it personally every day for everything. I don't really email anymore, except with people sending me email. Most of them are junk. But it's on the platform. All customer engagement that we are doing ourself are going to be all on the platform. So it's basically like Amazon. There is no CRM. We don't use Salesforce. We don't need Salesforce. We are going to have all customer and users connected to the platform, interacting directly with them, online. That's the game plan of the platform for us as a system of operation and for our clients. So this is really big for the next years, and we are there already. I can speak for hours to you about this and show you this, but it is something which is game-changer for companies and for even the supply chain. So it's a big differentiator. I don't see why there is need for Dropbox, Slack or WhatsApp for our clients. They don't need it. It's not secure. They can use directly the native IP-centric safe environment, and it's so cool to use. So clearly, the impact for the long-term is there. Related to China, the dynamic is very good in all sectors we concentrate in. I think that's more of our capacity to continue to develop the capability and knowledge.

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

Yes. And the sector that's driving the growth in China, definitively is the auto sector, the aerospace and the industry equipments as well as the home & lifestyle because with Centric PLM, we are penetrating more and more the Chinese markets, and it's a significant market per se. And the last question, which is the visibility provided by, I guess, on the business side, provided by the 3DEXPERIENCE platform. Yes. There is an impact because when people are buying and deploying the platform, it's because they want to connect all the different pieces together, and usually, the vast majority, they have CATIA, and it's an open avenue for us to expand in the simulation space and the manufacturing space. So we have this capability to do repeat business in a much easy manner when the platform is deployed.

[Operator]

The next question is coming from the line of John King.

[John Peter King, Research Analyst]

I have one focusing on SOLIDWORKS. Could you just explain a bit more in detail what the plan now is? I think you said that you're accelerating the plan there. Is that -- do we understand that's the prioritization of the cloud? Is that a migration from the historic parasolid kernel. Could you just explain that? And then I have a follow-up.

[Bernard S. Charlès, Vice Chairman & CEO]

Thank you, John. There are multiple questions here inside one. First of all, all the collaborative backbone for SOLIDWORKS for the Professional channel is cloud mobile-based, not on-Premise, except if the customer buy what we call, private cloud. But then most probably they will also use also software like CATIA, SIMULIA or DELMIA. So it's cloud mobile, and it's basically what we call Power'By. So you have a desktop, and you connect it to do cloud services for PLM of a collaborative innovation. It's very well received by the customers. The question is to train the salespeople to really engage well with clients on that side. Related to your side remark on the kernel, it's clear that we are also, step-by-step, delivering new categories of mobile-based, web-based, browser-based, SOLIDWORKS functionalities from any mobile phone or any device like this where the other browser, you can access to SOLIDWORKS capacity. It was called xDesign when we did SOLIDWORKS 2019. It's being -- it has gone through test -- customer test when it will be fully available on the market in the next coming weeks, it's going to be called 3D Creator. 3DCreator because we want everyone to be able to use web mobile services to create 3D content. And it's cloud, of course, by definition, web-based. And it does use the CATIA modeling technology natively. So it's fully compatible with the 3DEXPERIENCE platform from that standpoint. So those are the technical aspect of it. And customers are very excited with it. There is an amazing good feedback with [ student, ] fab labs, innovators. I think that should be -- this should be a good sequence of events to be back with a double-digit growth for this category of what we call mainstream solutions for the industry.

[John Peter King, Research Analyst]

That's helpful. And if I could ask another one related to the recurring revenue. Pascal, you talked about this, I think, a little bit, but obviously, there's effect Boeing, but is the maintenance revenue also stronger? Or are we are seeing it's really a -- this is really subscription growth? And if so, I guess, do you have some kind of metric you could maybe give us around order intake? So I guess, if that's the case, then perhaps just looking at licenses may not be the best way to evaluate your performance going forward.

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

The performance is going -- is coming from both, so the support and maintenance as well as the subscriptions. The maintenance and support is driven by the mix because you remember, when -- for 3DEXPERIENCE platform, the maintenance rate and support is at 20% -- 21%, though, in fact, it's higher. And on the subscriptions, Boeing is having an impact. I told you. Boeing, the full impact will be this year.

[John Peter King, Research Analyst]

Positive?

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

Positive impact. So the full positive impact will be next year, so it's not fully deployed. But also, the subscriptions coming from the simulation activities is also fulfilling the growth as well as the cloud. You remember, we announced early this year in Q1 that we won Schindler on the cloud, so it's a significant win. It's not only EUR 1 million. It's much more close to EUR 10 million, and it's a proof that we can sign big deals also on subscriptions with the cloud. This is the reasons behind this.

[François-José Bordonado]

Amit?

[Operator]

The next question is coming from the line of Amit.

[Amit B. Harchandani, Vice President and Analyst]

Amit Harchandani from Citi. Two, if I may. Firstly, I wanted to go back to the underlying margin improvement. If I remember from the Capital Markets Day last year, you talked about an assumption of 50 basis points per year going forward, and I think in 2018, you did around 70 and this year, now you're thinking about doing 100. So clearly, good execution there. And I was curious to understand, to what extent is this being driven by sales productivity? Is there better pricing part? Given that you're running ahead of your original assumptions, what does this mean in terms of how you are thinking about margins for the rest of the 5-year plan? And then I have a second question.

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

Okay. So the 50 basis points is really what we expect to achieve every year for the next 5 years, okay, compared to what you just stated today. Why I'm saying that? Because the vast majority of the improvements, you're right, is coming from the sales productivity. We did almost -- we are halfway. We did almost half of the job, but we still have some productivity to get. And the pricing power is still in place, if you look at many -- in many product lines.

[Bernard S. Charlès, Vice Chairman & CEO]

Value power. I don't like the pricing power.

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

This is why I want to cut. Let me stick to the pricing first. If you compare with the competitions, we are still higher than the competitions, but we believe it's not enough because given the value we are bringing to our customers, there is an avenue for us to change the equations. And you remember, during the Capital Market Day, Thibault started to share with you some ideas related to the outcome, through the performance-based pricing, having much more high-end consulting also. Those are the levers we are using in order to change the approach and to be much more value-based and less price-based by feature, I should say. And with this, you have the source of the organic improvement we expect to do for the next few years. I do not expect to do improvements on the research and development sides. We will continue to invest the same way we did in the past.

[Amit B. Harchandani, Vice President and Analyst]

And secondly, if I may. With regards to the penetration of 3DEXPERIENCE in terms of licenses, as you indicated earlier, up to almost 50% of licenses in the first half of this year or rather 44% but growing 50%. Do you think we can extrapolate this trend to continue going forward? Or do you think maybe Q2 was too strong a contribution of 3DEXPERIENCE and we should be a little more moderate in terms of our expectations for the second half and going forward?

[Bernard S. Charlès, Vice Chairman & CEO]

So if you come back to the Capital Market Day last year, I stated clearly that if we want to fulfill the plan, the penetrations of the 3DEXPERIENCE platform inside the installed base will go from 1/3 to 2/3 in the next 5 years. If you do the math, it means that the 3DEXPERIENCE contributions to the new license should be more than 50%, and it implied a growth which is definitely higher than 30% to 40%. So to answer to your questions. Yes, you could expect us to continue to fulfill the trend maybe with some volatility from one quarter to another one because it's sometimes relate to the last transaction we do, but this is the dynamic and the trend.

[François-José Bordonado]

One question from the call. Julian?

[Julian Alexander Serafini, Equity Analyst]

I want to circle back a bit on one point earlier. So on the subscription revenue. Can you discuss what are customers current preferring -- in your experience right now, do customers prefer the subscription option or they're opting more for more of the traditional license plus maintenance model? And just any data points you could share, it would be really helpful. And then, I guess associated with that, do you think the end state for the market is that everybody goes to subscription at the end of the day too? Or do you think it ends up with a mix or a balance of the 2 models at the end of the day?

[Bernard S. Charlès, Vice Chairman & CEO]

There is a lot of piracy with our software. Gigantic piracy. So you can -- one can say, it's a lot of revenue that we should -- over time. The reality is, there is a lot of piracy around the globe. We should not only point the same countries each time. The reality is it's around the globe, and it's for all categories of software. Strategically, my intent is very clear. Everything will become subscription.

[Julian Alexander Serafini, Equity Analyst]

Okay. That makes sense. So I guess, one more question if I may. Just on the cash flow. You discussed earlier the strength in working capital right now. Does that reverse later this year? Or does that strength in working capital carry through for the remainder of the year?

[Bernard S. Charlès, Vice Chairman & CEO]

Pascal, it's a good cash flow. You should love the question.

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

Yes. Again, if you look at the subscriptions, does not mean you are penalizing significantly your cash flow because I just want to remind you that half of the performance of the cash flow is coming from the net income and the other one, the other half, is coming from the operating working capital improvement. So I think we have demonstrated good disciplines to do this. And it's not on the -- it's not because it's on subscriptions that people cannot pay some upfront if you want to book the services for multiple years. This is something we know how to do. Large -- usually, the large customers, this is what they do with us, and we know how to do it. So I'm expecting this to be neutral on the cash flow because we already have a large part of the revenue, which is already recurrent, as you may know. So the model is dependent at -- between 25% to 30% on the new license. So I think I know how to manage it over the time.

[François-José Bordonado]

We'll take one last question from the call. And then we'll take one question from the room.

[Operator]

Mohammed, your line is now open.

[Mohammed Essaji Moawalla, Equity Analyst]

Bernard and Pascal, I'm wondering if you could just sort of elaborate a little bit more around the comment that you're seeing, there's sort of strong dynamic in aerospace. Where are we in terms of supply chain adoption at Airbus and Boeing? And how do you expect that to kind of develop? Are Boeing's kind of current issues around the 737 MAX likely to have a potential impact on supply chain ramp up? And then secondly, as we see more and more evidence of these standardization deals, I noticed the PSA announcement and then I also noticed some of your sort of competitive stats you gave. Can you give us a sense of the level of kind of footprint replacement that you're doing in here and the sort of uplift you are getting in terms of some revenue in some of what are already sizable existing customers?

[Bernard S. Charlès, Vice Chairman & CEO]

Thank you for the question on those 2 sectors. On the aerospace, yes, indeed, the traction is very strong. How to explain it. I think there are 2 phenomenon. One are really the visible decisions to move to the 3DEXPERIENCE platform itself, so the platform effect of it, but it does not happen over the weekend. We do extend existing installations like CATIA V5 on VPN or -- for specialists. We expand that with new scope of capacity with the 3DEXPERIENCE. I gave you a concrete example. We have extremely good success with 3DEXPERIENCE, both Big Data and AI applications related to cost analysis. We do index ERP systems, supply chain data on -- for aerospace companies. We provide them a completely new visibility in terms of how to simplify their cost, their part sourcing as well as part reuse. In fact, it's called OnePart and part reuse, and it's extremely successful. That's the EXALEAD technology. So don't be -- don't think that this is done with Palantir. It's not. It's done with our data-centric system. So that -- those are the expansion. Second expansion, in aerospace, is related to edge computing with DELMIA for manufacturing go-to rate where the platform is also used, both for logistic within the plant as well as the connection of suppliers, so -- because those are the current challenge. For new programs, 3DEXPERIENCE is going to be deployed across-the-board for the customers you have named. It has already been announced. But today, it's expansion of the footprint more than replacement. On the supply chain, it's following slowly. For the supply chain, they need to realize that they can save a lot and that the investment in Dassault Systèmes solution, it's not a cost. It's a massive possibility to save and increase the performance. It will come because the players in all sector have decided that the integration of supply chain is #1 priority after production on Big Data analytics for improvement. On the T&M, same phenomenon is happening, we call it Power'By. So basically, power V5 installations with the 3DEXPERIENCE platform, so it's happening progressively. That's why Pascal mentioned that it's really a visibility for double-digit growth over many years. And the last point related to Boeing challenges. I think we had a discussion with them a few months ago, and I can reassure you that this will have no impact on our projects.

[Derric Marcon, Equity Analyst]

Derric Marcon from Societe Generale. I've got 2, if I may. The first one is given the strong performance of the 3DEXPERIENCE in Q2 and in Q1, but mainly Q2, how do we reconcile the fact that, that is growing less than CATIA because I would expect the opposite, thanks to the uptake of -- taking the 3DEXPERIENCE? And my second question is around the catch up that you were mentioning in terms of investment. If I look to the Q2 outcome, you were just at the midpoint of your guidance in terms of cost base. So do you refer to the seepage that you had in Q1, that you want to catch up in Q2 -- or in H2, sorry, or anything new compared to the plan that you had at the beginning of the year?

[Bernard S. Charlès, Vice Chairman & CEO]

Thank you for your question. Related to the CATIA ENOVIA and as related to the experience platform, we have been mentioning and explaining that the ENOVIA of the 3DEXPERIENCE platform is not at all the ENOVIA of the V5 architecture. The platform has integrated everything. And basically, to make it simple, most of our competitors are providing PDM function. You connect 5 system data together in a PDM product, data management approach. We have put upside down, things upside down. We have created a platform, and we have reengineered all ENOVIA application so they become business application. An example of business application, cost management, quality management, pricing management with suppliers, marketplace connectivity and those are example. We are project management, program management, which are functions, which are business applications now as opposed to data collection because the data collection and the AI and Big Data management is done by a platform itself. So that's the upside down. It took 3 years to reengineer all the ENOVIA portfolio, but that makes our offer completely different from any of what is available from the competitors. And that is the simple, in some way, explanation of why the adoption of those new business experiences are slower because it's really a transition for clients. But I think it's expanding the footprint for our clients in a -- for our users in a big way.

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

To complement what Bernard said is you have to remember that for the last few quarters, ENOVIA was outperforming significantly, and now it's time for the same persons to consider CATIA 3DEXPERIENCE platform because -- and especially in the auto sectors, people are discovering that if they want to develop the EV car, the autonomous car, this is the right road for them to follow. So that's the reason why you have such a catch up. And the last point, which is also could explain for this quarter, you know ENOVIA is heavily dependent on the large transactions. We had some, but it was not a quarter characterized by many large transactions, I should say. Coming back to your questions related to the catch up of the investment. No, I still expect to catch up what we didn't do in Q1 and Q2. That's it.

[François-José Bordonado]

We'll take one last question from Gregory.

[Gregory K. Ramirez, Analyst]

Gregory Ramirez from Bryan Garnier. Two questions from my side. First, I want to come back on the SIMULIA and the strong growth you had in the quarter. I was just wondering if it was sustainable, or is it related to specific timing of term licenses, for instance. And my second question is to come back on the marketplace strategy you had announced early this year. Just to get an update on that and especially on the Make marketplace on 3D printing.

[Bernard S. Charlès, Vice Chairman & CEO]

Pascal, any color on SIMULIA?

[Pascal Daloz, Executive VP, CFO & Corporate Strategy Officer]

Yes. SIMULIA, you remember it's a token-based model. So it's already -- it's not a traditional license, and the model is really working the way we want. To a certain extent, our frustration is coming from what Bernard said is given the value we bring to our customer, our ability to capture the value is quite limited at this stage, I should say. So the token-based approach, it's a good model to sustain the growth. But to capture the value, it may be not the perfect one. But we'll fix that.

[Bernard S. Charlès, Vice Chairman & CEO]

The marketplace is -- we are putting a lot of attention on the marketplace for supply management and also asset management. So that's why it's more the B2B than in some way even for fab labs or the C side of having people, innovators connecting on the platform. We want to continue to develop that. We are having a marginal attention on it as we speak now because we think that the SOLIDWORKS product portfolio, the mainstream, needs to be completed on the platform to make this more pervasive. I talked to you about 3DCreator because then they are -- the social dimension of having anyone being able to produce something with the supplier from anywhere around the world will accelerate. So B2B is going well with the platform. The C side is slow because there are a few conditions we need to fulfill before.With that, thank you very much for your participation this morning. We always appreciate your questions and, of course, we are always there to try to give you the best possible answers. It's an exciting moment for Dassault Systèmes, and we are committed to do the next 5 years the way we announced it last year. Thank you very much.