The EDA and MCAD/MCAE Almanac -Nominal Q3 2011

First-half sales up +10%

As announced on September 15, 2011, first-half revenue totaled 36.6 million euros, an increase of +10.0% over the same period last year in real terms and +11.0% at constant currency.

Key indicators were positive over the most recent half:

  • License revenue was up +9.1%, at 24.9 million euros.
  • The License installed base grew by +4.2%.
  • License repeat business remained at a high level, at 82%.
  • License New Business recorded an increase of +26.4%.
  • Services activity increased by +12.0%, totaling 11.7 million euros.

Improvement in Gross Margin

Gross Margin came to 65.3% of revenue, versus 64.9% over the first half of 2010/11 and 61.6% over the first half of 2009/2010.

Operating Cost Structure

Research and Development costs were lower by 11.8% and totaled 6.5 million euros over the first half. This visible trend masks the stable high level of software investments (33% of Licenses revenues). It can be explained by a combination of factors: a decrease in net investments using resources in co-financed projects, positive currency effects, higher capitalization of Research & Development costs and some increase in Research Tax Credit.

Sales & Marketing costs totaled 13.5 million euros, up 12.2% on the previous year, and represented 36.9% of revenue compared to 36.1% over the same period last year. This evolution reflects reclassification and seasonal effects.

General and Administrative costs totaled 5.7 million euros, versus 5.0 million euros over the first half of 2010/11(base and seasonal effects).

In summary, operating costs remained contained and increased only 5.2% over the half, compared to a 10% increase in revenue.

Improvement in EBITDA in Operational Results (EBIT)

Mirroring the small but definite improvement in the Group’s economic performance, the EBITDA margin was up by +2.2 percentage points at -4.6%, compared to -6.8% over the first half of the previous year and -8.4% over the first half of 2009/2010.

The EBIT was -1.8 million euros, an improvement of +1.0 million euros, or an increase of 36.6% compared to the first half of last year.

Improvement in Net Profitability

The half-year's net profit, despite some currency losses, was -0.8 million euros over the half, compared to -0.7 million euros the previous year.

Once this financial result, an income tax credit of 0.9 million euros, and the EBIT improvement are taken into account, the Group’s attributable net loss was -1.6 million euros over the half, compared to -2.6 million euros over the first half of last year, i.e. an improvement of 36.5%.

Financial Structure

The Group had 12.5 million euros in available cash at July 31, 2011, versus 10.6 million euros at July 31, 2010 and 6.8 million euros at January 31, 2011. After reimbursement of various debts (1.8 million € over the half), the Group’s financial position strengthened, with a low debt ratio (long-term debt divided by shareholders’ equity) of 4.6% at July 31, 2011, compared to 11.5% at July 31, 2010 and 6.5% at January 31, 2011.

Validation of Growth and Profitability Leverage

License activity recorded a reasonably good performance over the first half of the year, traditionally not as robust a period as the second half.

Licensing saw a high level of repeat business from the installed base, reflecting clients’ increasing desire to apply ESI’s virtual prototyping solutions which can spur industrial innovation during a period of economic mutations.

New Business also recorded gains as forecast by ESI Group’s business model. Often ESI solutions are initially adopted by the sector’s key accounts, and then are gradually adopted by the main suppliers and sub-contractors. This increase in New Business also contributes to industry sector diversification, with the first half seeing a much-improved performance in terms of orders taken for the Aeronautical (+43%), Energy (+29%) and Education (+42%) sectors, which are particularly affected (1) by the need to innovate and (2) by international competitive pressures.

Services activity also recorded good growth in terms of both revenue (+12%) and gross margin (+27%), reinforcing the notion of offering services both upstream and downstream of software solutions.

Because of its continuous focus on innovation over the last 30 years, its technological knowhow, its global sales network and partnerships, its recurrent business model with high gross margin, and its development in near-shore and offshore zones, the ESI Group arguably offers substantial profitability leverage.

Edited ESI description

ESI is a pioneer in virtual prototyping that takes into account the physics of materials. ESI has developed a suite of coherent, industry-oriented applications that, used properly, can simulate a product’s behavior during testing, fine-tune manufacturing processes in accordance with desired product performance, and evaluate the environment’s impact on product performance. By offering Simulation-Based Design, virtual prototypes can be improved in a continuous and collaborative manner while minimizing and in some cases eliminating the need for physical prototypes during product development. Present in over 30 countries, ESI employs some 850 specialists throughout its worldwide network. ESI Group is listed on compartment C of NYSE Euronext Paris. For further information, go to

On October 26, 2011 PTC (NASDAQ: PMTC), sporting the tag line "The Product Development Company(R), reported results for its fourth fiscal quarter, which corresponds to our nominal Q3 2011.


  • Nominal Q3 2011 Results:
    • GAAP revenue of $339.425 million, GAAP net income $37.621 million and GAAP EPS of $0.31; vs. last year Q3 2010 $268.066 million, (13.215 million), and ($0.11); and vs. sequential Q2 2011 $291.783 million, $15.526 million, and $0.13.
    • Nominal Q3 Guidance three months ago was GAAP revenue of $318 to $328 million and GAAP EPS of $0.25 to $0.29
    • Q3 2011 Revenue contribution from MKS, which PTC acquired in May 2011 and 4CS Solutions, which PTC acquired on September 2011, was $20.8 million on a GAAP basis
    • Q3 2011 GAAP operating margin of 15.1%
  • PTC FY'11 Results (year ending September 30, 2011):
    • GAAP revenue of $1,167 million and GAAP EPS of $0.71
    • GAAP operating margin of 10.0%
  • Nominal Q4 2011 Guidance:
    • GAAP revenue of $303 to $318 million and GAAP EPS of $0.14 to $0.18
    • Assumes $1.40 USD / EURO, down from previous assumption of $1.45
    • Revenue guidance assumes approximately $20 million contribution from MKS and 4CS
    • GAAP revenue of $1,327 to $1,337 million and GAAP EPS of $0.94 to $0.98; GAAP operating margin of approximately 11.5%
    • Revenue guidance assumes approximately $90 to $100 million contribution from MKS and 4CS.
    • Assumes $1.40 USD / EURO, down from previous rate of $1.45 - negatively impacting annual revenue guidance by $15 million

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