MCAD/MCAE Industry View – A November 2010 Update

The total DS headcount at the end of Q3 2010 was 8892 vs. a headcount of 7812 one year ago.

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

DASTY.PK    11/24/10 CLOSE = $ 71.93       MKT CAP = $8.38 B

NASDAQ   11/24/10 CLOSE = $2543.12


Dassault Systèmes self description

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

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

On September 29, 2010 ESI GROUP (Compartment C of NYSE Euronext Paris) reported financial results for the first half of its 2010/2011 fiscal year, the period ending July 31, 2010. The following chart comes directly from the ESI Group news release:

Since we knew the nominal Q2 2010 sales for the period ending April 30, 2010 from the last MCAD/MCAE Commentary in August 2010, we can deduce the ESI sales for nominal Q3 2010 (the quarter ending July 31, 2010). The nominal Q3 2010 sales are first half 33.3 million Euros minus Q2 2010 15.9 million Euros = 17.4 million Euros. Using the calculated average exchange rate for the period in question, 17.4 million Euros is $22.24 million.

Likewise nominal Q3 2009 sales are 31.2 million Euros minus 16.4 million = 14.8 million Euros. Using the calculated average exchange rate for the period in question, 14.8 million Euros is $20.67 million.

Because ESI Group profitability or loss is reported only by half year increments, and because to date the numbers have been small, the practice of omitting ESI quarterly earnings/losses in G5 totals (e.g. Table 2) will continue.

Alain de Rouvray
, ESI Group's Chairman and CEO, comments: “The substantial interest shown by our key accounts in our Virtual Prototyping strategic innovations is resulting in the growing success of our solutions, particularly visible on the second quarter. Simultaneously, keeping our cost structure under control, which is at the heart of our concerns, has resulted in an improvement in the gross margin and has curbed our operating costs excluding one-offs and currency effects. These trends confirm our expectations that business and results will continue to improve this financial year.”

Commenting on the ESI Group half-year results through July 31, 2010, Rouvray painted a picture of gradual improvement, “As announced on 14th September 2010, first-half sales totaled 33.3 million euros, giving a purely organic growth of +6.8% in actual terms and +2.2% by volume. This improvement is a result of the acceleration in the growth of Licenses (+10.5% in real terms over the half, +23.3% over the second quarter). Subsequently, the product mix has evolved in favor of this activity, as Licenses accounted for 69% of first-half sales compared to 66% for the first half of 2009/10.

The gross margin came to 64.9% of sales, versus 61.6% over the first half of 2009/10. This substantial increase was due to the change in the product mix and the improvement in the profitability of Licenses activity, which benefited from the optimization of distribution and support costs. Services activity remained stable, impacted by the downturn in the situation in the Americas.

Mirroring the improvement in the Group's economic performance, the EBITDA margin was up by +1.6 percentage points, at -6.8% over the first half of this year versus -8.4% over the first half of 2009/10.

The Company's financial situation remains sound. The Group had available cash of 10.6 million euros at 31st July 2010.

License activity improved significantly, in terms of sales growth and gross margin. A more favorable market context has led to a higher level of repeat business from the installed base (86%), with key clients increasingly willing to choose ESI's integrated solutions.

New License Business was up sharply over the first two quarters of the year, increasing by a total of +32.7% over the first half. This reflects the intensification of our sales efforts, with new clients coming onboard and existing clients purchasing new products. New Business is also feeding (our) business sectors' diversification, with clients from the Transportation, Aerospace, Machinery and Education sectors for example.

Providing technical support to ESI's French and German subsidiaries, our new Tunisian nearshore production center has been strengthened via the creation of a new division dedicated to Automotive Powertrain technology. This new division reflects the convergence of the expertise and know-how of ESI's Tunisian teams and the high demands of the Group's clients in terms of technicality, quality and costs.”

ESI.PA   11/24/10 CLOSE =  10.31 EURO       MKT CAP = N/A

NASDAQ   11/24/10 CLOSE = $2543.12


ESI self description

ESI is a pioneer and world-leading player in virtual prototyping that take into account the physics of materials. ESI has developed an extensive suite of coherent, industry-oriented applications to realistically simulate a product's behavior during testing, to fine-tune manufacturing processes in accordance with desired product performance, and to evaluate the environment's impact on product performance. This offer represents a unique collaborative and open environment for Simulation-Based Design, enabling virtual prototypes to be improved in a continuous and collaborative manner while eliminating the need for physical prototypes during product development. Present in over 30 countries, ESI employs over 750 high-level specialists throughout its worldwide network. ESI Group is listed on compartment C of NYSE Euronext Paris. For further information, go to


On October 26, 2010 PTC (NASDAQ: PMTC) reported results for its fiscal year end and for its fourth fiscal quarter (equivalent to calendar Q3 2010), both ending September 30, 2010.

Revenue for calendar Q3 2010 was $268 million, up 10.3% compared to sequential calendar Q2 2010 revenue of $243 million, but up only 8.8% year over year compared to calendar Q3 2009 revenue of $246 million.

GAAP net income for calendar Q3 2010 was minus $13.21 million for an EPS of ($0.11). This compares to plus $15.9 million net income in calendar Q3 2009 for an EPS of $0.13. GAAP net income was plus $10.72 million in the just prior calendar Q2 2010.

Highlights for Calendar Q3 2010

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