Valerie Agathon - Head of IR Bernard Charlès - President and CEO Thibault de Tersant - Senior EVP and CFO

Jay Vleeschhouwer - Merrill Lynch

Thank you for standing-by, and welcome to the Dassault Systemes Q3 Results Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions]. I must advice you that this conference is being recorded today Wednesday, the 29th of October, 2008. I would now like to turn the conference over to your first speaker today, Valerie Agathon. Please go ahead, madam. Valerie Agathon - Head of Investor Relations: Thank you. Thank you for joining us to review our 2008 third quarter and year-to-date financial and business performance. On the conference call are Bernard Charlès, President and Chief Executive Officer; and Thibault de Tersant, Senior EVP and CFO. Our financial results are prepared in accordance with U.S. GAAP. In addition, we believe it is helpful to provide you with supplemental non-GAAP financial information. On this call, we will discuss our revenue, operating income, operating margin and EPS on a non-GAAP basis before deferred revenue write-downs, amortization of acquired intangibles, stock-based compensation expense, and other operating income and expense, net. For a reconciliation of the differences between these figures and our U.S. GAAP figures, please see the reconciliation tables included in our earnings press release, which has been posted on our website at 3ds.com. Some of the comments we will make on this call either as part of the prepared remarks or in response to questions will contain forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. Information about the principal factors that could cause actual results to differ materially from forward-looking statements can be found in today's earnings press release and in Item 3 of our 2007 20-F. If you have additional follow-up question after the conference call, please do not hesitate to contact Beatrix Martinez or myself in Paris or Michele Katz in New York. I would now like to turn the call over to Bernard. Bernard Charlès - President and Chief Executive Officer: Thank you, Valerie. Dassault Systemes had a solid third quarter with financial results well in line with our objectives. Our software growth was 12% in constant currency and would have been 18% if we reported in U.S. dollars. Our growth was all organic in this quarter. I believe our year-to-date results and the outlook reflects several key factors that we would like to review with you today. First, our focus on the value proposition of our brands to our customers' product design on product innovation processes. Second, our industry diversification, third, our diversification into higher growth countries and regions. Fourth, our focus on investments on strengthening our sales channels which could not have been better timed. We have invested in developing three major channels for reaching our markets. Importantly, we have invested in growing these channels so that we have a better coverage by industry due on customer size. We are seeing results from these changes in all channels and, in particular in the PLM Value channel where the most significant part of our reports have been concentrated. Fifth, our high level of recurring revenue now about 60% on an annual basis gives us good visibility on our core base of revenue generation. Last quarter, we told you that we saw a mixed macroeconomic environment. Being cautious, we were preparing ourselves for a potential tougher second half environment. Of course, we could not imagine what unfolded over the months of September on a global stage. Naturally, these events did have some effects on our business activities during the third quarter. Now, what does that means for the fourth quarter on a full year? Thibault and I with the entire management team and our extended sales organizations have looked closely at the environment and the needs of our customers. Based upon this analysis on our year-to-date performance, we are targeting a full year objective of 12% software revenue growth in constant currencies, within our previously announced branch of 12% to 13%. Furthermore, we are targeting an operating margin expansion of 50 to 100 basis points and we are increasing our earnings per share growth objective approaching 10% EPS growth. With this summary, let me turn the call over to Thibault now for his financial review. Thibault de Tersant - Senior Executive Vice President and Chief Financial Officer: Thank you, Bernard. Before going into a detailed financial review, let me first do a brief review of our GAAP and non-GAAP reconciliation figures. For the 2008 third quarter, we had deferred revenue write-downs of €1.4 million operating income, operating margin and earnings per share before amortization expenses for acquired intangibles of €11.4 million, stock-based compensation expense of €4 million and €6 million of other operating expense in connection with the re-location of our corporate headquarters and restructuring expenses. Turning to the third quarter review, we had very solid results, solidly meeting our revenue objective and exceeding our EPS objective. First, total revenue came in at €320 million. We ended up with less headwind from currency compared to our assumptions in developing our objectives. Therefore, we calculate that reported revenue would have been €313 million at our assumed currency rates or within the objective range of €305 million to €315 million that we shared with you last quarter. Second, our growth was all organic with softer revenue at 12% in constant currencies. In fact, while we have a small positive impact from the Engineous acquisition, our divestiture of DSF this year more offset this. Third, EPS increased 26%. It was $0.49 above the high end of our range of $0.41 to $0.44. These results reflected our inherent earnings leverage as well as the positive impact of currency on financial revenue. And fourth, our operating margin was 23.7% ahead of our objective of 22.5%. This represents a 120 basis points increase in our operating margin for the quarter and year-to-date, the improvements is the same. This demonstrates that our operating margin performance was closely tracking the high-end of our targeted range of 80 to 130 basis points prior to today's update. Our results also continued to demonstrate improvement in net operating cash flow. In the quarter, net operating cash flow improved 7% and year-to-date, our net operating cash flow was up 9% to €262 million compared to €240 million in 2007. We finished the quarter with a strong net cash position totaling €630 million as of September 30th. Turning to growth by region, our revenue growth was strongest in the Americas with revenue up 16% in constant currencies. Growth in the Americas was led by ENOVIA and SIMULIA. Year-to-date the Americas are up 14% in constant currency. In new Europe revenue increased 11%, Europe was driven good performance in Germany and strong demand from Russia. Year-to-date revenue in Europe was also up 11%. Results in Asia were mixed this quarter we had strong demand in China and a number of other countries in the regions. However, this was more than offset by a lower level of new business activity in Japan. For the quarter Asia was flat and year-to-date it was up 6%. Both data points in constant currency. As Bernard will discuss in greater detail, we are benefiting from our sales and expansion into higher growth countries and regions with the revenue of above 25% in constant currencies this quarter for this group in total. Now, looking at the details of software growth, recurring software revenue drove the results increasing 18% in constant currencies. Recurring revenue accounted for 67% of total software revenue in the quarter. Our solid recurring revenue growth benefited from several of the key factors. First, we continued to grow our installed base of customers across the company. Second, growth is coming from higher Solidworks maintenance attachment and annual rate which reflects very steady customer dynamic. And third, our recurring revenue growth was also driven by SIMULIA's performance as customers continue to increase their use of virtual simulation in the product design and creation process. New licenses growth slowed in the quarter to 1% growth in constant currency as it was impacted by the economic slowdown. Japan was the major reason behind the lower level of new license growth. Looking at software growth by brands, let me share a few comments. CATIA delivered software revenue growth of 9% in constant currencies in the third quarter and excluding the DSF spin-off perimeter impact, underlying activity is delivering double-digit growth in constant currencies. CATIA growth rates during the 2008 second half also reflected very different first half, second half comparisons to 2007. CATIA software revenue growth grew 5% in the first half of 2007, while it increased 23% in the second half of 2007 reflecting the first visibly noticeable benefits of our PLM Value channel transformation as well as the acquisition of ICEM. CATIA Year-to-date growth in 2008 was an increase of 17%. ENOVIA had a good quarter, demonstrating the success of our diversification strategy into new industries. ENOVIA software revenue increased 19% in constant currencies. To some extent, we also benefited from a weak year-ago comparison. SIMULIA software revenue growth was in the double-digits in constant currencies and its growth was well diversified across a broad range of industries. In the Mainstream 3D market, we had good performance driven by recurring revenue and sales of Solidworks product data management and analysis software applications, both elements growing above 20% in constant currencies. New seat activity was healthy in both Europe and Asia, but was offset to a large extent by the Americas. We had good results in our consulting services this quarter, with solid double-digits revenue growth in constant currencies. In addition, we saw some nice improvement in the consulting services margin as well. Looking at our quarterly trends, we have seen progressive improvement each quarter this year. Overall, our services and other revenue line item reflect the perimeter effect of winding down historical channel management activities formerly rendered to IBM. And I would also remind you that a services margin comparison to the year-ago period reflected a much higher mix of CMP fees and the DSF spin-off and therefore is not so meaningful to measure our progress. Our non-GAAP operating income increased 12% in the third quarter. R&D headcount was up 6% that includes personnel in R&D and cost of software with R&D expenses increasing 5% excluding currencies and benefit income research tax credits. In total, operating expenses increased 9% excluding currency on headcount growth of 8%. We continue to improve our non-GAAP operating margin. For the quarter, we have an improvement of 120 basis points and year-to-date the results are same as I mentioned at the outset of my remarks. Financial revenue improved significantly in the quarter, following two quarters where currency negatively impacted results. Specifically, financial revenue increased to €9.9 million up from €1.7 million in the year ago period. It was comprised of net increased income of €3.4 million and net exchange gains of €6.3 million. Other operating income and expense net this quarter included non-recurring expenses related to our headquarters move. In addition, they also affect restructuring expenses related to improving efficiencies within the organization to reduce infrastructure cost including co-location of DS teams. These non-occurring expenses totaled about €6 million during the third quarter. As a reminder, in our fourth quarter we will recognize a sizeable gain of sale of real estate in our GAAP results. But the gain will be excluded from our non-GAAP results. Turning to our financial objectives, we have factored into our fourth quarter and fiscal year outlook signs of weakening results in September due to the economic crisis. And we have updated our currency assumptions of the result. As a result, we are targeting a 2008 software revenue growth objective of about 12% in constant currencies within operating range of 12% to 13%, thanks to our diversification strategy, sales channel expansion and recurring revenue model. Specifically, looking to the fourth quarter, we are assuming about €10 million impact from lower activities. Currency on the other hand has an estimated positive impact of about 30 million in comparison to the assumptions we previously used in preparing our objectives. Netting currency and activity leads to a net increase in our reported revenue range to between €1.34 billion to €1.35 billion from €1.32 billion to €1.33 billion, previously. Year-over year currency still has a negative effect based upon our assumed rates in comparison to 2007 average exchanges rates for both the U.S. dollar and Japanese yen. Secondly, based upon this level over revenue growths we are also targeting to improve our 2008 non-GAAP operating margin by 50 to 100 basis points in comparison to 2007. We have effectively shifted down around of range improvement by 50 basis points on our previous target of 80 to 100 basis points improvement. So we expect that for full year our non-GAAP operating margin will show steady improvements over 2007, but less than we have achieved year-to-date. And third we're increasing our 2008 non-GAAP EPS objective range to between €2.15 to €2.20 from €2.10 to €2.17 previously. Our outlook is based upon the foreign currency assumptions for the fourth quarter. The U.S. dollar to euro exchange rate of $1.45 up to a euro and the Japanese yen to euro exchange rate of 145 yen to a euro reflecting the fact that currencies continue to be very volatile at this point in time. Based upon our objectives for the full year, we have set the fourth quarter 2008 non-GAAP total revenue objective of about €385 million to €395 million and a non-GAAP EPS objective of about $0.79 to $0.84. As I indicated on the last quarter's call commencing with 2009, we will thoroughly report and communicate in IFRS. As we do each quarter, we will issue a press release reviewing our results under IFRS. In today's earnings press release, we have reconciled GAAP and IFRS financial data as well as non-GAAP and adjusted IFRS data. This table is going to be found on Page 13 of our release. As you saw, from the information, the non-GAAP and adjusted IFRS were identical. Now, let me turn the call back to Bernard. Bernard Charlès - President and Chief Executive Officer: Thank you, Thibault. I would like to spend the rest of my time doing discussing the key factors helping drive our market share gains. They are; focus on high brand value for customer, industry vertical diversification, high growth countries diversification and strengthened channels. Let's begin with our brands. Over the last 12 years the evolution of each new brand has been focused on answering the question how can we ensure that we maximize the benefits to our customers. To do that you have to invest so that each brand independently brings value to product design on product innovation and in combination our PLM brands offer a solution to support to the entire innovation spherule for each of our targeted industry verticals. As a result of this strategy each brand is the possible entry point to gain new customers and to serve us a reference bring in additional brands as appropriate for the customer. In addition each brands offers a large portfolio of specialized applications to help our customers accelerate deployment and maximize productivity gains. CATIA had a good performance this quarter with 9% software revenues growth in constant currencies, just as a reminder, 17% year-to-date. Our specialized application our important components driving CATIA growth on contributing to the stability of average fee prices. Some examples of the specialized applications CATIA offers to customers include analysis, composites, machining, electrical wiring, piping, and tubing, and reverse engineering. An illustration of a customer using our specialized CATIA application is ACT, a U.S. composite part supplier to leading OEMs in the U.S. Using CATIA Composite has enabled ACT to reduce the time required for detail design on prototyping by 90%. In addition that had been able to reduce their usage by 15%. ENOVIA had a dynamic quarter with a software revenue gross of 19% in constant currencies. This performance was driven by industry vertical diversification. Our specialized applications by industries, Industry Accelerators, have been important in securing and helping customers achieve faster deployments of our software. ENOVIA is also progressing with V6 adoptions with a recent win with Piaggio Aero, a leading aerospace company headquartered in Genoa, Italy. In a separate press release issued today, we were very pleased to announce that Procter & Gamble Company (P&G), the world's largest consumer goods company, has chosen to implement our ENOVIA V6 PLM solution as its enterprise-wide PLM back. P&G will leverage Dassault Systèmes portfolio to create a global platform to support realistic product definition and development. This was a very important win because it is enterprise-wide and it is very significant in terms of the potential of number of users at P&G. It is also an illustration of the benefits PLM brings to the new verticals. We would like to make one final comment related to ENOVIA. I would like to thanks Joel Lemke, CEO of ENOVIA for leading ENOVIA through its first stage. He has done an outstanding job. I have truly enjoyed working with him and the good news is that, I would still be able to do so, because Joel will be heading up a new independent business partner organization focused on the new industries. Joel has perfectly timed his move. With ENOVIA well positioned and at its strongest point initially. Our new CEO for ENOVIA is Michel Tellier. Mitch has been with DS since 1997 coming towards from the aerospace industry. He most recently headed our PLM Consulting Services organization where he had successfully led the DS transformation to optimize consulting and services by focusing on higher value-added engagements and programs for our customers. And he has also been instrument in developing specialized solution for accelerating ENOVIA's diversification in various industries. So, he has all the qualifications to adapt the brand. With his deep implementation expertise, assuming the CEO position at the beginning V6 deployment is perfect timing. Turning to Solidworks, it delivered good software growth up 13% in constant currencies and up 19%, if we were...if we reported in U.S. dollars. Driving these results were strong growth in subscription revenue, which was up about 20% in constant currencies. Unit growth was more subdued at 2% on lower and new license activities in Americas offsetting the...to a large extent, growth in Europe and Asia. Year-to-date unit growth was up 9%, ESP was stable. Our Solidworks brand is also an example of the value of specialized applications in broadening revenues sources on driving revenue growth. Solidworks analysis on product that are management specialized applications, posted revenue growths above 20% in constant currencies during this quarter. I have the pleasure of sharing in the launch of Solidworks 2009 at the press event in Barcelona with Jeff Ray, Solidworks CEO. The new release really expands the gap between Solidworks and its competitors in the States. Driving significant measure of our increasing performance was a key component of the R&D behind this new release. Solidworks wings in the quarter included L-3 Communications in high-tech in the U.S. and Star-I [ph] in Brazil in industrial machinery among many others. Last quarter, we devoted significant time to SIMULIA, so my remarks today are short. Let me just remind you that SIMULIA delivers strong software revenue growth in the third quarter, is well diversified by divested curve and as software revenue stream that is more than 90% recurring. SIMULIA completed the acquisition of Engineous last quarter and has already released an integrated product, I-SITE for Abacus, which provides design exploration and optimization technology enabling designers and engineers to perform rapid trade-off studies of real work behavior and accelerate product development. Delmia made some nice progress with win for its Delmia Automation Application. Sanyo Machine Works, a leading provider of manufacturing line for automotive on high-tech selected Delmia for automation in order to validate the code for products and control system before the integration of the actual equipment on the shop pro [ph]. Turing to our 3DVIA brand, I want to highlight a growing community we are seeing developing. From its West side, as measured by the member of the 3D models and number of registered users, we are seeing initial sales of our new product, 3DVIA Composer, in both our PLM and mainstream markets. So, we watch customer Aqualux, a leading manufacturer in mid shower enclosures, headquartered in the UK selected 3DVIA Composer and saved 25% to 40% time on producing documentation. Importantly, thanks to the associated of design with downstream documentation occurring. All changes are made in real time helping ensure the accuracy of the documentation. Turning to geographical industry diversification, two areas are key drivers of our progress in two new industries. First, we offer industry base solutions for business processes on collaboration. And second, we offer solutions for stimulation lifelike experience on manufacturing. P&G is an important customer for us and demonstrates the appeal of our solutions to a broad branch of industries. And those are examples this quarter of vertical diversification is TUV Rheinland, a leading provider of certification services headquartered in Germany. They selected ENOVIA to launch the TUV Compliance platform to evaluate materials on the regulatory compliance early in the product development lifecycle. Over the last year, we have reinforced all our channels paid channel to ensure efficient go-to-market for all our brands. With respect to our PLM value channel we have effectively completed the transition during the third quarter and now are responsible for all countries, 69 in total. Importantly, we are seeing good performance on growth well balanced across our three major geographic regions. In addition, we are seeing the benefits from the transformation of all these channels. Our channels are becoming more knowledgeable about the brands they sell, as well as, specialized products they are able to bring greater value to clients. And we are benefiting from the capacity increases that we made and continue to make where needed. The work we have done to expand our sales channels has enabled us to increase our sales coverage in high gross countries and regions, where we at limited presence just a few years ago. This include Asia, Eastern Europe, China, India, Latin America, Russia and CIS. During the third quarter, non-GAAP revenue grew about 25% in constant currencies among this group and they have became an increasing portion of revenue approaching 10% at present. Before wrapping up let me make one final point. Since construction we have developed the recurring software revenue model, it continues to expand and become even more meaningful contributor to our growth and visibility. Looking at the sub quarter revenue... recurring software revenue represented 67% of our total software revenue. In PLM that figure is even the higher at 71%, I mean the mainstream city it is very strong 54%. Fusing back to my early comments on each brands bringing value then the strong dynamic of subscription renewals is a clear confirmation of customer's satisfaction. Given the macro economic backdrop, I believe the strengthening of our hazards underlined the strategic importance of our software on core consulting offerings for our customers. Further more our focus as a company is to ensure that we are a close partner to all our customers, in order to help them enhance their products and product innovation processes. This has been a key distinguishing feature of Dassault Systemes since our inception and has been at the core of our success on market leadership. I know in this current difficult micro economic environment our offerings have never been more important than they are right now. At this point, Thibault and I will stop to take your questions. Question And Answer

We will now begin the question and answer session. [Operator Instructions]. Your first question comes from Jay Vleeschhouwer of Merrill Lynch. Pease ask your question. Jay Vleeschhouwer - Merrill Lynch: Thanks, good morning. And I have a new last name for the conference call. The first question Bernard, concerns of vertical markets you refer to industry solutions and the vertical orientation of the company, could you be a little bit more specific as to how the vertical mix looks today, how it's changed and specifically if you are concerned at all about your... still have the exposure to auto? Bernard Charlès - President and Chief Executive Officer: Good morning, Jay. The... to give you a data point 2007, the new sector we're presenting about 30%. So, it gives an idea that we are not at beginning of the process; we really launched it two years ago that I think it has created some very good results. So, that's an dynamic to really adopt PLM processes in new sectors. And the P&G announcement today is significant, not for the transaction itself, but for what it means for me, what we announced today with P&G is equivalent to what we did with Boeing 15 years ago when we announced that we would be doing a Boeing Super-7 with digital makeup, without physical prototype. It's a strong signal that this industry will adopt new processes. But that's why we took this... and the announcement is very precise and I encourage all of you to read it because it contains very precise degree with the customer about the fundamental transformation. So, that's for the first part of your question, Jay. They are really the dynamic to PLM in many new sectors with the success of ENOVIA, ENOVIA's accelerators and also of course SIMULIA especially in the energy sector for example. But even in the life science is very critical on that standpoint. So, the 30% I talked about in terms of customer based on 2007 and we continue to grow this year or next year. Related to the auto sector, I think two points, we have demonstrated in the down term previously 2002, 2003 for example, or even before in the '90s and when some heavy industries like this are going through down term, we are less sensitive to the production value and more sensitive to the product pipeline, the product tax, what is in planned for the next three, five years in terms of product rollout. I should notice that if I look at carefully... if we look at carefully about the product plans for all those companies while they are reducing and I would even say the same for contribution... for either space by the way, while they are reducing production value the product trend have never been as rich as they are. I am sure that every executive in those sectors, I am thinking about survival and thinking about growth in the future are spending most of that... of their time thinking about what should be the new product portfolio. And that's what we do. So, my belief is that especially for the Auto sector, I think we can continue to progress provided to size of the portfolio we have and when I say size, coverage of the product portfolio we have. There is a lot of work we can do to compliment existing instillations. On the... I think as IT budgets will be probably reduced. What will happen is I think there will be cost reduction, but there will be also higher selections. And I believe at many companies will unified environment remove multi-CAD go to single CAD, remove multiple-PDM, concentrate on core PLM backbone on simplified operating environment and we will leverage all those factors. Jay Vleeschhouwer - Merrill Lynch: Next question is with respect to the new business. In the third quarter, the new license revenue that you reported was down 2% year-over-year, which I think you attributed largely to Japan. On the other hand if you look at the magnitude of the capacity editions by IBM itself by yourselves through the value channels in the last couple of years shouldn't the net effect or that capacity in the last couple of years are more than compensated for the weakness in Japan recently allowing you nevertheless to have grown new business in the third quarter? Bernard Charlès - President and Chief Executive Officer: Well, I think before we go in more detail here, I want to make one simple comment. I think that when there are tough time the resilience is a key factor. And I think the capacity increase, which is a fact based on the last comments we made Jay, related to the PLM value channel on what you refer including IBM and so on. This is the reality. The fact that we were able to deliver despite the worsening of the economical conditions basically just to deliver on the aim of our objectives is already approved that this capacity can be away to overcome the different challenges. And the system will have to continue to adopt because what we are going to do is make sure we have a flexible way to reallocate opportunities in a good way. Sometimes it's better to sign two mid-size transactions and miss a big size transaction, just as an illustration of what I am trying to do. And with that Thibault, you want to make some more specific comments. Thibault de Tersant - Senior Executive Vice President and Chief Financial Officer: Well, I think that was good. Simply mention that because of the capacity increases, we stepped into Q4 with a better type of business than what it was one year ago. Soeven if our new license revenue growth was soft in Q3, certainly this better coverage of the market helps us continue to drive diversification, sales of applications and a better price that will close at its rhythm. Also in our Q4 objective we have an increase in new license revenues that is forecasted. Jay Vleeschhouwer - Merrill Lynch: Okay. Finally a question about competition, about a year and a half ago, when UG was sold to Siemens, I think you took a somewhat conservative view as to what that would mean competitively. I think you assumed that there would be an integration period to that perhaps the UG's business would decelerate and that you would perhaps be able to take some advantage of that. From what we understand, it has not being that badly, obviously at the first half of the year both in their CAD and PLM business, they seem to have done reasonably well with apparently some acceleration. And so do you think perhaps that there has not been as uncompetitive as you might have initially assumed post the Siemens deal, although I recognize that it will be... and that's going around P&G is interesting because that was dominantly a theme center shop. So that's the first question about competition? And then finally Solidworks did have a fairly large sequential drop in units from second to third quarter. So second quarter in a row that's been down, on the other hand, Proe was up sequentially from June to September, maybe that was seasonal for PPC but it was nevertheless a dichotomy, so perhaps you could talk about some plans for Solidworks to reinvigorate its growth? Bernard Charlès - President and Chief Executive Officer: Well on the first question about the German competitor, I don't think you can justify what you just said in your question refer data, Jay. And I don't believe that what you said is true. Simply said, I think what we observe is that they are loosing market share on which they would be publishing data, you probably would be very surprised with the results. So, I think there is a big difference between publishing data and giving impression and my view today and I feel is that we win and we gain market share at the instance. So, the impression is not substantiated with facts in my view. And the second aspect of the Solidworks trends, Thibault, do you want to make some comments on the revenue, I think we have been clear on what was done, do you want to make some comments there? Thibault de Tersant - Senior Executive Vice President and Chief Financial Officer: Well on Solidworks, I think that the revenue in Q3 was satisfactory and at the high-end of our objective naturally for Solidworks. In terms of unit trend, we saw the impact from the economic environment in Q3 for Solidworks as well that's different and the need is it is the revenue that we make with small companies in general which are indeed affected by the current downturn. But the growth prospect for Solidworks are absolutely clear in there and the competitive situation of Solidworks compared to its key competitors in our view is completely unchanged. The revenue... the year-to-date growth in unit is 9% and the total volume is significant almost 40,000. So we are speaking about a strong dynamic. And, I think we will be... the Solidworks team will be meeting its objective for this year. So, we are confident about the dynamic there. Jay Vleeschhouwer - Merrill Lynch: Thank you.

The next question comes from Bruce Tibo [ph] of [indiscernible]. Please ask your question.

Good after noon. Could you... SAP yes they said that Russia was down, you talk about the breaks and said that you had a very good dynamic in... you maybe comment about Q4 and maybe later unless. Second question, could you give us an idea of what would be the impact and the negative impact on the margin for '09 of the change in the ForEx and I've got further question? Bernard Charlès - President and Chief Executive Officer: Thank you and good afternoon. On the Russia the dynamic has been good. And overall on the breaks it has been also very good with a good pipeline. Of course, as Thibault mentioned this morning in the Analyst Call, we have factored in the new risk factors quality to Q4. However, we still consider that breaks at large, why we call breaks at large is on the way for strong growth for us. Thibault do you want to provide more inputs. C: Thibault de Tersant: No, no. Clearly, we are seeing a good fight in breaks and concrete and the dynamic that is still there even if they are not competing from the crisis of cost. Concerning the margin, it's very hard to make an assumption for ForEx for 2009 at this point. But what I can share with you is that if ForEx were to stay, what it is today, today as an example, this would in fact have a positive impact on our margins, because there would be a slight negative impact from the dollar strengthening, but a very positive impact from the yen strengthening and the net of both would be in fact to gain in margin. For Q4, with the assumptions we have taken which are conservative I hope of $1.45 per euro and ¥145 per euro, there is a very slight positive margin impact of less than 10 basis points.

Okay, great. And maybe two question. You got very important amount of cash in your balance sheet, what would you plan to do with it? And secondly, do you have an idea of the percentage of your customers who use bank loans to buy your software and may be do you provide them some help or some financing help or some financing help in buying the software? Thibault de Tersant - Senior Executive Vice President and Chief Financial Officer: Well, on the cash we are sitting on the suitcase and we don't plan to open it. So, the cash is keying those days and obviously of course we are... we will continue to be very cautious. So my comment is a very serious comment, it's a company philosophy and we have been in good school for that. The... clearly of course, if they're very selective technology of staff reps that could bring value in our portfolio, we will... like in the past, fairly create, do potential acquisitions, but nothing has changed from that... from that policy we have been implementing in the past years. So related to the use of the cash we have free policy when it comes to dividends. Basically now more than 15 years almost 20 years we have been very constant. We take a sole of the profit in a year we give it back to the shareholders even at that time when the financial community were telling us not to do it, we are doing it and we will continue to do so. And we're keen to serve for our investment in the development of the company I want to recall everyone that we control 52% of our shares. So family and management so I think that's a good situation to us but because we are not subject to takeover and we are here for the long-term. On the use of their cash, we have been very cautious not to dilute shareholders with stock option plans so of approved shares. So we have a policy to at least compensate to do a share buyback and we have an approval for that when ever it's appropriate to at least compensate on that and not create any dilution for current shareholders. So the policy we've been putting in place we want to keep it, that is a clear stability on that, no surprises and people know what they can... what they get on their financial bond, on their financial.

Financing? Thibault de Tersant - Senior Executive Vice President and Chief Financial Officer: Financing, sorry for the customers. Bernard Charlès - President and Chief Executive Officer: Well, we don't have plans to start becoming a bank for our customers and but we have available worldwide rental conditions for our licenses. And we are very happy when customer FedEx to choose them and in the current times we've see in fact the growing interest for all this rental terms for licensing. So to some extent, I think the percentage of new licenses that will be rented is going to increase in the coming quarters.

Okay. And maybe could you give, you talk about the leasing of the software I guess? Bernard Charlès - President and Chief Executive Officer: Yes. That's right. Yes.

Okay. Thibault de Tersant - Senior Executive Vice President and Chief Financial Officer: This model is a very if I may sorry for interrupting. This mobile is very, very efficient for us because and for the customer it's of real value because some customers now might be worried about the future of the workload. And the fact that we can provide this smaller is a very flexible way for them to start to deploy and adapt installations based on the workload. And they really appreciate that very much. And as you we have been promoting that model for years and we think it's a very good one. Now please notice that even in SIMULIA, for SIMULIA it's about 90% of the revenue model it's securing revenue, 90. So I think that's a good model and a stable one.

Okay. I think two other question if I may. As the first, it's about, have you changed any assumption in your closing rate for your guidance in Q4 and for the full year? And second question, previously talked this morning about rigorous and high inevitable PLM benchmark. They won against PLM... main PLM players at EDS. Have you any comment to do about this? Bernard Charlès - President and Chief Executive Officer: Well, on the closing rate, I think what we have factored as people well explained, it is a risk factor, but not the closing rate per set. It's all about integrating all of risk factors and the visibility and why we came out with confirmation of the objective we have confirmed this morning. On the second topic, the EADS topic, I think this is old news, very old news. If I recall, it's the same decision that has been renewed and renewed over for the last five years. What I will say is, I will make two comments. The first one is old digital more cup processes and digital manufacturing for not only EADS, but Airbus that launch is based on our software. On the second thing, I will say is this kind of the confirmation of the decision requires that you have programs to deploy the software because with that programs, you cannot get much and for the time being, as so I know old programs really extensively using our solution and deploying our solution. So it's old new news.

Okay, great. Thank you.

Your next question comes from Gerard Osbos [ph] of Citigroup. Please as your questions.

Alright. Thank you for taking my question, this is Houilan [ph] [indiscernible]. I just have two questions. One is on the FX game in the financial income of $6.3 million in Q3. What do you expect and what do you see there for Q4 and going forward? Bernard Charlès - President and Chief Executive Officer: The DNE is very on the receivables, so it depend completely on the counts you rate which is the closing rate. The last rate of the quarter with the current volatility its extremely hard to predict what it can be. Because its not being an average rate but just the closing rate for the movements that we have seen in currency rate, I think I would be a fool to try to predict it. Okay. But so far the Q4, what I have taken right now in the objectives is business as usual meaning no exception on currency or gain at all.

Okay. And just a follow-up if they do receivable with the basic, maybe as same proportion say directly, in terms of currency. Thibault de Tersant - Senior Executive Vice President and Chief Financial Officer: Yes. Absolutely. Completely, that's right.

Okay. And also if I look at Solidworks and if I back how basically did the license grow, that seems to be at around 20% increase in recurring revenue growth in the lines of the mainstream 3D product line. And how was that being driven by the increased attached rate for the maintenance and for subscription program? Bernard Charlès - President and Chief Executive Officer: Well, first of all, your remark is, of course a very critical one. For many years now we've been putting a lot of attention on driving the growth of the revenue, recurring revenue in basically a market segment where recurring revenue has never been considered as key. I think, we have demonstrated with the development policy with the packaging and with the sales policy with the resellers that we could build this snowball. I think, it's representing about 54% of the total sale U.S. revenue. So, we put a lot of attention as you implied in your question on the attached rate. And it's quite high and I think the resellers are discovering that it's a real value even for them and also, of course, we put the same attention for the add-on products that we are putting on top of Solidworks for the application sector. You want to add anything Thibault? Thibault de Tersant - Senior Executive Vice President and Chief Financial Officer: Yes, maybe because there are two components really in the increase in subscription revenue for Solidworks. The first one is the increase in the customer base, the total customer base which is about 15%, so it's a significant increase in customer base. So to reach... to bridge between 16% and 20% is where the improvement in attach rate and renewal rates and the improvement in product mix are playing. And so, there are about between 2% and 3% improvement in attached rate of Solidworks are in fact bridging this gap between 15 and 20%.

Thank you very much. Bernard Charlès - President and Chief Executive Officer: Thank you, sir.

[Operator Instructions]. Your next question comes from Sebastian Tuvu [ph] of ODO [ph]. Please ask your question.

Hi, again everyone. Interestingly enough, the last time Dassault Systemes share price was trading on such low key as of today that is between 12 and 13. It was six years ago and a few weeks. And at the time, if I remember well you launched very aggressive share buyback buying like 3% of the capital of with few months. And I was wondering if there is anything specifically today which would hamper you to do so and is there any possibility that you could accelerate the share buybacks over the next few weeks or months if the share price remains at such a level, please? Bernard Charlès - President and Chief Executive Officer: Well, thank you for the question. The... well before we have the approval to do share buyback, this has been at the shareholder meeting approved to a certain limit of course, but we have the approval for that. And we will see what we have to do provided our all this is revolving and we don't want to mention all of them but right now I think I shared at the beginning of this call the general policy, but clearly there are limits to everything including the fact that at some point in time the leveraging factor is so strong that we might decide to do more than what we were initially planning. But there is no nothing we can communicate today aside of this generic statement I just made here.

Fair enough. Bernard Charlès - President and Chief Executive Officer: Thank you, Sebastian.

[Operator Instructions]. Your next question comes from [indiscernible] Capital Management. Please ask your question.

Yes, hi. I just want to come back to the effects, particularly the yen and the low impact. I saw your slide presentation at the last page at appendix which gave the mismatch or basically roughly speaking 12% in the yen in the revenue and the yen cost. So I was very surprised when you commented before and you said you didn't expect much of a... because if it take maybe I was wrong in my conclusion you just help me, if I take the current spot of yen it always is 126 and not 145 which are the one that you're using for fully often time. The... I get 20 million plus in term of a bit contribution just because of this, and I remember you didn't hedge in the bad days, I know you should benefit in the good days. Did I make a mistake in my calculation? Bernard Charlès - President and Chief Executive Officer: Thibault? Thibault de Tersant - Senior Executive Vice President and Chief Financial Officer: No, no, you are not, you are not. The only point is that I am still reluctant to use the current spot rate for the yen because of the current volatility. So I don't want to create expectations that we would not be able to fulfill at the end of the day. But I am correct, you have not hedged, because you have not done it before and you're still not doing it today, the yen against the euro. So if I take the slide, the last slide and I look at the basically more or less the 6% mismatch, that should go straight through in the in my EBIT? Bernard Charlès - President and Chief Executive Officer: It goes into the EBIT, but long, you maybe you will be pleased to know that we are starting to hedge at the current levels.

Okay, now that's good news, yes, yes, but at current level 26? Bernard Charlès - President and Chief Executive Officer: Yes, at current level, and I... absolutely.

Okay. And the other thing I wanted to make sure, because a lot of people were... are concerned obviously of the visibility in your industry and because of the nature of your clients. I remember once you told me roughly speaking you had six months visibility on your order book. I don't know I should call it an order book, but as it stand now compared with the third quarter where license on a like-for-like basis were up 1%, what will it be if I look what you have currently in the pipeline? Do you understand what --? Bernard Charlès - President and Chief Executive Officer: What will it be for what...?

For the six months you have more or less usually in your pipeline, which I think is the number that you told me, you think you base your guidance on top. If I went [indiscernible] once you told me roughly speaking we have six times visibility on the other flow. Thibault de Tersant - Senior Executive Vice President and Chief Financial Officer: First of all, overall, our due sense to the confirmation of [indiscernible] machine, I think our overall visibility has increased compared to the past. Why? Because first of all, we have the direct management of indirect channel for PLM, and we do manage the worldwide opportunities in extremely precise way. All uncertain because our partnership with IBM has evolved significantly and they are doing a great job and they are really implementing the plan that they have said that they would do. We have also now have defined that clearly, I have main list of accounts so we can really do account reviews. So, the visibility has increased all in all. That being said, and I think that's an important point when it comes to the management of the risk, the risk management. But there is nothing more I want you to conclude from that. Because of course, between having the visibility and being able to close the business, there is some work to be done. So, I don't want us to start to attach anything to the pipeline. All I did to adjust for us to away to really understand plan do the proper execution that we need to do to really achieve our objectives. I would say however that it's way to mitigate risk for us.

Yes. But and my constraint was correct, I understand it's a way to... exactly, that's good, because you know when it can increase or decrease your costs. But, the six months was with the integration of some of the sales force from IBM is a good approximation or not? Bernard Charlès - President and Chief Executive Officer: It's not bad.

So two quarter ahead. Okay, thank you. Bernard Charlès - President and Chief Executive Officer: Thank you, sir. With that, I think it's the last question. We are really passed the time here. Thank you, everyone, for participating to the call and thank you for your attention, support. And of course, you are always welcome to call Valerie and the team to get additional information. Have a good day.

That does conclude our conference for today. For those of you wishing to review this conference, a replay can be accessed by dialing within the UK on 10845-245-5205 or alternatively on country code +44-1452-550-000. The reservation number is 666-479-22#. Thank you for participating. You may all disconnect. .