Good morning. So I'm very glad to present our second quarter results and a few highlights about them to start. I think that first and foremost, the signing of the agreement with Boeing is a very major milestone for Dassault Systèmes, and we'll come back to it in a few moments. The second quarter software revenue was at the top of our guidance, and EPS was also at the high end of the guidance. So it was very much a quarter which was in line. It was driven by good performance in Aerospace & Defense, and by the way, not fully related to Boeing yet. It will happen but not yet. And Diversification Industries were also very dynamic in second quarter, particularly Pascal, I think, who will present what we are doing in High Tech, in Life Science, in Architecture, Engineering & Construction, which for us is becoming a significant grower, and Consumer Packaged Goods & Retail. The cloud is getting traction, is becoming something where we see truly now a chance to sell cloud solutions indirectly, which is kind of unique. So associated with that, we decided to take a majority stake into the subsidiary which is providing our servers, our server farms, which is called Outscale. It's not bringing revenue because we are essentially the sole customer for it today, but we now can control it. And we are updating the guidance. In fact, it's unchanged, excluding currency and growth rates. But we have to take into account the strengthening of the euro, which was significant at the end of the second quarter as you know. So I cannot resist the temptation to speak a little bit about Boeing before handing the call to Pascal. Because in fact, I have been associated with this story for the last 30 years as an inter-office point for Boeing for commercial and legal topics Dassault Systèmes, and it's a customer I respect very much. It's a very significant transaction in the scope of it because it does include not only commercial aircraft but also Boeing Space and Defense divisions. So that's quite significant. They are adopting not just -- of course, they are still using our design solutions, but here, they are adopting manufacturing across the board. So Boeing is going to use our manufacturing solutions in all factories in order to improve production rates. And they are deploying the 3DEXPERIENCE Platform. The vision at Boeing is that they want to store actually all historical data, all newly created data, make sense of them and use them in order to improve all value streams. All value streams at Boeing for innovation, for manufacturing, for after sales, for customer experience, and this also including the supply chain. So it's a very significant decision in favor of our 3DEXPERIENCE platform. After a very thorough examination, we have been benchmarking for 18 months at Boeing, and they have been reviewing essentially all infrastructure, data and Big Data infrastructure available and selected the 3DEXPERIENCE platform. So the ramp-up of it is going to start in 2018. Simply to say that it's -- there is no change in 2017 because there is work, of course, in order to prepare the solutions. Let me do a quick reminder of Boeing. Boeing is a kind of pioneer actually in the worldwide industry because today, people speak a lot about Digital Twins. I'm sure you have seen that. In reality, Boeing did the first Digital Twin in -- well, they started in 1989, and they did the 777 digital -- full Digital Mock-Up in 1994 or 1995. So it's 25 years ago that Boeing did the first Digital Twin. And it was followed by the rest of the industry as you know. So today, when Boeing decides to adopt the 3DEXPERIENCE platform for manufacturing and PLM and also post sales, this is a very critical decision, very critical decision, which, I think, we can guess safely is going to be followed by others. And it's a nice validation. So there is a press release, which was issued this morning, and I'll go quick because I'm going to repeat otherwise what I just said. But you have to bear in mind is that it's probably -- it's certainly the largest scope of deployment of our solutions ever in all our history, which is going to happen with Boeing. It was a very competitive process, and the digital continuity and the analytics capabilities that are brought by our 3DEXPERIENCE platform made the difference. With that, I'm going to hand over to Pascal who is going to do a business review of our second quarter.

Thank you, Thibault. Good morning to all of you. It's a real pleasure to join Thibault to make the presentation of the Q2 results. Today, I would like to cover 5 topics with you. And why we selected those 5 topics is because I think if you look at what is going on, on one hand, you have the significant contract we had with Boeing, which is demonstration of basically the fact that the strategy is being adopted by the market progressively, but it's a validation of what is going on. And on the other hand, I think we have a solid quarter based on the fundamental. So let's zoom onto Q2 performance first. If you look at basically the key highlights, the first one is the software growth, increased by 8% compared to the 7% and 8% target. I think we are basically in line with what we say to you guys. The new license increase, 8% versus to the 5%, 7% target we gave to you last quarter, and more important, it's a positive progression from 6% in Q1. So clearly, we are seeing an acceleration of the new license growth. The recurrence software revenue grew at 6% as planned. Our operating margin up at 30.1% compared to the 29.4%, 30.4% guidance we gave. So we are in the middle. And the reason is because we continue to invest in Research & Development, and as well as in marketing and sales, and Thibault will probably come back on this. The earning per share also came at the high end of the guidance with EUR 0.62 and up to 9%. So basically, if you look at all those financial objectives, we are delivering a quarter which is at the high end of the guidance we gave to you at the beginning of the year. Moving to the software revenue per brand, a few things to notice. The first one is CATIA grew 1%, which is overall reflecting the transition going on. But more important, if you zoom a little bit, it's a double-digit growth in Americas and Europe, which is a strong sign of basically adoption of the market by the new product line. This growth has been offset by Asia and mainly China. In fact, China is flat, and as you may know, it's a key area for CATIA. Moving to ENOVIA, I think there are 2 key messages for ENOVIA. The first one is one of the highest quarter in term of absolute number, even if the growth seems low, just 2%. But if you compare to last year, I mean, we had a terrific Q1 and Q2 with 32% growth in H1. And in fact, if you want to measure the performance of ENOVIA, given the sales cycle which is usually 12 months, I think it's much better to do it on a yearly basis. And moving forward, we think we had a good prospects with large transaction in H2. So clearly, we are confident on -- for ENOVIA. SOLIDWORKS, still a growth because 14% overall from the software, which is mainly triggered and driven by the new license growth. And if you remember last year, the growth was basically composed of a very good momentum in subscription. Here, it's really the new license driving the growth. It's true everywhere, so basically in all the regions of the world, we are seeing a good momentum with SOLIDWORKS. It's also as a result of the customer requirement asking much more, I will say, multi-applications requirements in OEM simulations, in PDM, in electrical, in the new domains to a certain extent, and last but not least, we have significant win back against the competitions. So I remember a few of you telling me few years ago that the new players coming in town could probably put SOLIDWORKS at risk. I think we are demonstrating that is not true at all. If you look at the Other Software, I think 2 key points. So growth is 9% for the quarter and 9% for the semester. It's mainly driven by 2 factors: one, the very strong momentum. It's also the result of the financial deployment in much more, you can say, multi-market is really requirements in all for example, to, however, is also some of you, because significant win back [Audio Gap] By double-digit growth in the new license in North America. So this is a key point because if you remember in Q1, we told you that we had [Audio Gap] I will say modest, and it's mainly driven by SOLIDWORKS by the Professional channel. So this is for the numbers. For this quarter, it's not because we announced Boeing, but I think it's probably important also to say few words on the core industry and especially to make a zoom on Aerospace & Defense. It's a domain which has been quite in term investment for the last few years. And in fact, the investment cycle started last year, and we are seeing some acceleration. So where are we? Sorry, so if you look out for the quarter, the total software growth is up plus 14%, excluding the currency effects. And it's mainly driven by several things. And again, it's not taking into account at all Boeing because the ramp-up will start next year, early next year. So those numbers are excluding the Boeing deal. So it's really driven by key wins in propulsions. This one is quite interesting. I think we will be able to communicate or probably later in the year why it's an interesting one because it's -- we win over the competition and in this account, the competition has a significant installed base, so which is a proof that we could remove installed base even if they are deployed massively on large PDM system. We are also expanding in Aerospace supply chains and in 2 key segments. The first one is avionics and the aero structure, mainly thanks to the collaboration capability of the 3DEXPERIENCE platform, as well as manufacturing capabilities, and then we'll come back on this. We are also diversifying at airline and airport, thanks to Quintiq mainly, because those 2 subsegment are key for Quintiq. And again, this dynamic is really not taking into account the agreement we signed with Boeing. And you have to keep in mind that the Boeing will also help us to not only show the way for the others, but also drive the acceleration of the adoption of our solutions by the supply chain. So the reasons behind this is very simple to understand. If you look at all the big airplanes company, all of them, they have good order book and the problem they are facing right now is to deliver the planes to the customers. So the key thing they have to manage is really to increase the productional rates and really to speed up the ramp-up for most of the programs. And at the same time, they need to do that by delivering on targets, which is delivering on cost and on quality, which is not easy things to do. And most of them, they are also preparing the next generation of airplanes. So they foster innovation with some new materials, new manufacturing capabilities such as 3D printing, for example. And I think right now, we have by far the largest and most comprehensive solution to address those key challenges of these markets. So few data points. Rockwell Collins, I mean, it's a well-known customer for us. They are developing avionics solutions. And here the most interesting thing, they have decided to adopt the 3DEXPERIENCE platform with -- what we call the Co-Design to Target Solution, which is very easy to understand. They -- you have to manage multiple disciplines together because it's mainly -- there are a lot of electronics and software, mechanics, of course. And at the same time, they -- you need to be sure that you will deliver on cost. So the way to do that, they are using the 3DEXPERIENCE platform with ENOVIA to seamless the collaborations between all the different disciplines. But they are also using the analytics part provided by EXALEAD to check at each step if we are on track compared to the plan, so which is something interesting because we see more and more the analytics being part of the value proposal. The second example is Latécoère. I'm sure you know this company. Why it's an interesting case? Because this constraint to accelerate the ramp-up and to increase the cadence and the production rates, it's also true for the supply chain. And if you look at what Latécoère is doing, to a certain extent, they are facing the same challenge is how to increase the production rates. And this is a reason why they had decided to adopt prior DELMIA suite, starting from the digital manufacturing all the engineering of the processes, going to DELMIA Apriso for the manufacturing management operations, as well as DELMIA Ortems, which is the advanced scheduling and planning systems to balance the productions across multiple line and sometime multiple plant. So this is really key because you could expect to see more those kind of deals coming in the rest of the year. Another key thing, which is much more related to how to foster innovation. So clearly, we extended our collaboration with Airbus around the additive manufacturing. And you know for this domain, for this sector is really strategic because this is changing a lot of things. It is changing basically the way to do maintenance by doing remote fabrications. This is a way also to change the way to do -- to integrate innovation doing rapid prototyping. And it's also the way digitally to completely change your structure of the airplane. So basically you have a lot of spending on these topics across the industry. And why Airbus has decided to standardize on our solution? It's very simple to understand because we are the only one being capable to bundle basically the material science; the engineering of the design, of course; the engineering of the processes, the manufacturing processes and as well as basically all the operation on the Shop Floor. And without having this coupling, I mean, you cannot do -- you cannot deliver the promise of the 3D printing. This is as simple as that. And last but not least, Dubai airport, which is the third largest airport worldwide and probably one of the most busiest, has decided to select Quintiq to simply increase the traffic without compromising the passenger experience. So basically what they are doing, they are using the capability of Quintiq to do the planning, as well as to do the real-time allocation of all the resources. So this is a quick snapshot on the Aerospace & Defense. Let's move to the Diversification Industry, very simple. In fact, we continue to have a good momentum. So basically, the numbers speak for themselves. So the Diversification Industry represents 33% of the Q2 software revenue. And more important, it's 2 points -- 2 percentage point compared to last year, and it's mainly driven by a few industries. And if you look at all of them, High Tech, Life Sciences, Architecture, Engineering, Construction and Consumer Packaged Goods Retail, in average, the software is growing more than 15%. So clearly, it's really a steady growth. And the reason is because I think we are reaching a point where all the solution we have delivered to those industries are mature. If you take basically the High Tech sector of the growth is really coming from the semiconductor with a solution called Silicon Thinking. In the Life Sciences, the growth is coming mainly from the biotech and the pharmaceutical company with a solution called Unified Lab Management is how you -- basically you can gather all the different discipline in the development of the drug. In Architecture, Engineering & Construction, the growth is driven mainly by the design for fabrications, how you optimize your design in order to simplify the constructions. And you have new players like Zahner are really taking the lead on this. And the Consumer Packaged Goods Retail, it's P&G and Unilever are adopting widely our perfect product solutions to manage entire portfolio of products they are developing right now. So clearly, the diversification is very strong, and we continue to deliver good performance. Before to turn the presentation back to Thibault, I really want to spend time to say few words on the cloud. It's still embryonic to a certain extent, but we are seeing a good adoption and a good momentum. And there are several reasons for that. The first one is because now we are seeing some basically use cases emerging, and the company who are adopting the cloud are usually the company being structured and basically organized by projects. And this is true for the architecture firm, it's also true for the EPU, basically all the company having to bid and to answer to big project in a very short period of time. The cloud is really the solution not only because it fits their business model, because it's also a way to do quick ramp-up. We are also seeing good adoptions of the cloud by all the new industries, and the reason is because they do not have the legacy. So for them, they want to start directly on the state-of-the-art architecture. And last but not least, we are also seeing the large companies, I would say, the core industries we serve like Transportation & Mobility, adopting the cloud for all their open innovations, projects, initiatives. So most of them, they are working with start-ups. There also are more and more willing to connect their car and basically collecting information. And the only way to do this kind of initiative is really through the cloud. So the adoption is really driven with this open innovations initiatives. One thing I would like to share with you, we organized, during the Design Week in Milano, a contest gathering all the -- probably the most seamless architects worldwide, and you have the list here. Why it was an interesting case for us, it's because we gave to them a challenge, which was very simple. They had less than 24 hours to come and design an innovative buildings in the free space inside Milan. And they had to do it using the 3DEXPERIENCE platform on the cloud and with the next generation of CATIA applications, which is putting the generative design at the core. More than the long explanation, let's see basically in action what has been done. [Presentation]

Again, it's not the core industry for us. But the reveal was very highlighting to a certain extent, because not only they have been able to do fantastic things in less than 24 hours, but the fact that they didn't spend time to start. The fact that they have been able to adopt the solution in less than 24 hours and do something with it is a proof that the solutions we are developing is much with us to start to envision to tackle this market seriously. And also well-known and famous architects are helping us basically to promote the solutions across the industry. Speaking about the cloud, few example also just for you to grab where we are. I mean, for all the city projects going on, the cloud is a de-facto standard because there is only -- there is -- this is the only way to deliver the 3DEXPERIENCity solutions to them. Here's an example. It's Rennes Métropole in France. In fact, we have a long-standing relationship with them because they are doing the mediation with the citizens using the 3D for almost a decade, and they started with us. Now they took the decision to adopt the 3DEXPERIENCE platform on the cloud and specifically the 3DEXPERIENCity solutions, because they want to do 2 things: they want to be able to basically structure the collaborations across all the city departments, all the utilities, including transportation or recycling and so on; all the urban planner and architects and all the authorities. So basically, this 3DEXPERIENCity is becoming for the city what the Digital Mock-Up is for Boeing, for example. The second reason is because it's also the way for them to collect all the data, the real-time data and extract the metadata in order to take decision or to provide additional services. So clearly, if you look at all the city initiative we have worldwide, all of them are based on the cloud. Another good example of the adoption of the cloud is with this Marine & Offshore Group. They are developing wind farm, offshore wind farm, in fact, it's a German company, and they decided to adopt the cloud for 2 reasons: one is, again, it's a project-based company. So each time they have to bid, they need to connect with the customers in order to define the requirements and also check all the specifications rapidly, and the cloud is really the easiest way to do that. And also, they need to ramp-up very rapidly the projects. So they need to connect all the different stakeholders, including all the suppliers, and this is definitively an efficient way to do it. If you look at the portfolio, and I know it's a question usually asked, with the 17x, we are covering 2/3 of the solutions. So basically, 2/3 of what we have in-house is available on the cloud. And with 18x, which is a release coming at the end of the year, November, we will cover more than 85% of the portfolio. So basically, from an equidistant point, most investment is behind us. If you look at the coverage where -- because it's on the cloud so the question is how we -- it's not because the solution is really for the cloud that we are able to deliver the software as a services everywhere. So we have 10 data centers, and with those 10 data centers, we are covering more than 90% of the installed base in the market. So basically, the infrastructure is in place to serve the market. And this is a reason why we completed the acquisition of Outscale by acquiring the majority stake. Thibault will say few words about it, but let me remind you the reason why we set up this company in year 2010. Because at that time, when we started, so 7 years ago, at that time, when we started the cloud investigations, you had only on the market 2 different technological stacks: one was dedicated to manage basically the large storage, and it was built around EMC. And the other one was basically dedicated to manage latency of the networks. And as you may know, enabling the collaborations, we need to have a very low latency in order to smooth basically the connections between the different people. And we were not able at that time to find a stack, the technology combining both strength. So it was point number one. Point number two, we made also a bet which was the application with provisioned resources. So which basically means through the EPI, automatically CATIA, DELMIA, SIMULIA, will provision the bandwidth, the application need, the storage, the application need, as well as the digital computing power, which is something key, because if you want to have the full benefit of the cloud, this is really the way to go. And last but not least, at that time, we had only few players and knowing basically the cost structure, or the technology, tuning the technology in order to deliver the performance was not given. So this is a reason why we have created this company with an entrepreneur in year 2010. Now basically, this company has more than 100 employees dedicated to the cloud and data centers around the world. And more important, they are managing all the operation for us, whatever the data center we are using. Because sometimes, we are using all the data center like Amazon when it's needed. So it's key. And it's becoming very key for us because we are integrating those solutions, those cloud solutions as part of the 3DEXPERIENCE platform. Let me frame to you why. Because one of the requirements most of the customer are asking us is to comply with national regulations. And this is -- and especially when you manage sensitive data like the Defense and Space or the Life Science data. There is no way you could escape from this constraint. So the way to do that is to be able to build, what we call, Soren Kel. She is nothing more than basically the cloud being based on the given country, but operate globally. And more and more, we have customers asking us to install the cloud on their premise, which basically mean it's a real cloud because we operate in a seamless way. But for security reasons, it's on their facilities. So for those few reasons, it's becoming strategic for us to integrate Outscale as part of the solutions, especially to bundle it with 3DEXPERIENCE platform. And this is a reason why we acquired a majority stake. We let some, I would say, lever for the entrepreneur to continue to develop this company. As Thibault say, we are not envisioning this acquisitions to bring additional revenue because we are already -- I mean, Outscale is already is a cloud provider for us. But it's much more a way to secure the company and being able to bundle it with our solutions. That's it for me. Thibault, I give you the floor for the numbers.

I will be short because you already know them, right? So total revenue was up by 6% in second quarter, 7% for the first half. You will see that our first half is actually the half of the 7%. New licenses were up by 8% in second quarter, some acceleration. And first half was up 7%, as I said. Recurring revenue was up by 6% as forecasted. Here, we are all in the high end of our guidance, and the first half was up by 7% in recurring revenue. And services was more muted growth, 3% only in second quarter. And the first half was, guess what, up 7% growth. I think what's important here is to see that the gross margin in services, in spite of the more muted growth in services, which, by the way, is linked to our strategy of using more system integrators, was significantly up at about 11% compared to 7.6%, 1 year ago. So in spite of the light revenue growth in services, I think you can see here that our actions are producing results in improving profitability of services. EPS was up by 9% in the second quarter, and it's the exception. If you look at the first half, it was up by 6 -- between 6% and 7% in reality. And -- but if you exclude the tax reserve reversal that we did in the first quarter of 2016, actually which was a onetime reversal, in reality, first half EPS was up by 12%. Now this is my favorite chart, second favorite after the Boeing announcement, to be honest. You cannot -- I mean, not be a finance person after so many years being it. And for me, cash flow is a good indicator of the total strength of the business and the business model. And here, you can see that our operating cash flow in first half was EUR 592 million, up 32% compared to last year. So I think a quite good performance in terms of operating cash flow. If you dig into it, you can see that, of course, net income was a contributor, but also the good work of our finance department on receivables with a 6-day reduction in DSO, which produced a nice decrease in trade accounts receivable. The unearned revenue was up by 4%. Here, maybe you would expect 6% instead of 4%, and there are 2 tiny explanations. For the 4%, one is that we did our homework. And for the few customers that -- where we don't see there is any chance to recover the payment of their due -- overdue receivables, we exited them from the balance sheet. So this had an impact. And also, Quintiq is a solution that was requiring a lot of customization when we did the acquisition and the solution is maturing. And so there is no the ability to recognize upfront more revenue because of less customization needed in order to deploy these optimization solutions. So want to assure you that the reason at which we are taking the deferred revenue into the P&L has not varied. But we simply had these 2 impacts. Finally, the objectives. Essentially, what we are doing with the objectives for the year is that we are confirming our growth rates, excluding currency impact. And we are confirming them for total software, for new licenses. We are also reconfirming our operating margin objective. But we are taking into account the significant strengthening of the euro at the end of the second quarter. And we were -- we had developed our objective, if you remember with the euro at $1.1. We -- by the way, we are very right by doing so for second quarter. If you look at the consensus, you may see that the consensus was higher than our guidance for second quarter. If you rectify the consensus with actual rates for currencies in the second quarter, you will see that it was, in fact, very well-aligned with the high-end of our guidance. So what we are doing now is going to $1.15, I know it's at $1.16, but I believe $1.15 is reasonable. The yen, we are changing from JPY 117 to JPY 130 as well. And in reality, the impact we are facing is that the euro strengthened by about 7% to 8% compared to all major currencies in which we are doing business. That's the situation. And it's the situation for the sterling, for the Chinese yuan, for the Korean won, for the Indian rupee, it's even more the situation for the Russian ruble. There's a long list. So here is the bridge, and you can see the impact on the dollar, EUR 28 million, the yen is EUR 13 million and then EUR 9 million relief for other currencies. So it's a EUR 50 million reduction in reported revenue in euros for the year that we are doing. Growth rates ex FX is unchanged, 6% to 7%, and there is an impact on EPS, which is an impact of 2%, EUR 0.06 of EPS. So we are now announcing an objective of EUR 2.62 to EUR 2.66 in EPS, 5% to 7% growth. And of course, if you take into account one time, the growth is better. But that's truly the reduction, 2% of EPS, due to the strengthening of the euro. In spite of it, I'd like to highlight the fact that we are maintaining our margin. We are targeting 31.5% operating margin for 2017, and we are keeping it unchanged. And the reason is because we are generally hedging the net exposure of the different currencies we have. So the difference between revenue and expenses in these major currencies. So we are able to protect the margin in spite of this euro strengthening. So what are we updating in terms of objectives? Really, we are forecasting the same growth rate for the year. We are forecasting the same growth rate for new licenses, 8% to 10% for the year. This is calling for double-digit growth in new licenses for the second half. Recurring, still unchanged at 6%. Same increase in organic operating margin. And the tax rate of 33.5%, which is in fact slightly higher than in the original objectives where it was at 33.2%. So that's it. And third quarter, 6% to 8% growth in topline for third quarter and EUR 0.62 to EUR 0.65 in EPS for third quarter that's essentially what we're doing with our guidance, in fact, unchanged with the exception of the euro strengthening. So thank you for your attention, and now with Pascal, we are ready to answer your questions. François-José Bordonado: We start first with question -- with 2 question from the room and after we take question from the call. Shall we begin.

Its Laurent from Kepler Cheuvreux. I just have one question it is on the Boeing announcement this morning. I think there were some numbers, it was given by the French press, about EUR 1 billion. So talking about the 30 years agreement. So if we could have a little bit more color on that? And especially the kind of ramp up you're expecting as of '18 in order to try to stop putting that into a model for '18 and '19. That would be useful.

To the figure which was shared was just to give you the illustration that it's a significant agreement, which is more in the EUR 1 billion range than the hundreds of million. But we cannot share the exact amount of the agreement because the customer does not want us to do it. It's -- again, the scope of it is very large. It's all divisions. It's manufacturing. It's infrastructure with the 3DEXPERIENCE platform, it's all the design. So I don't think we ever had such an extended scope for an agreement. The size of Boeing is obviously very large. So it's a significant increment compared to what we were doing before we were actually more in the commercial division of Boeing and doing essentially the design for the planes and the management of the configuration with ENOVIA. But we were not doing the complete infrastructure nor the complete manufacturing solution. Now the ramp-up is going to take starting early next year between 4 and 5 years. So it's going to bring incremental growth for us during these 5 years. And of course, this is just Boeing and the supply chain is also going to be involved, as Pascal pointed out. So it's very exciting every month.

Can I try a bit more? On the medium-term outlook, I think you were looking for high single-digit organic growth for the years to come, 8% or 9%. Today, you are on 5%, 6%. So is it going to close the large part of the gap?

It is potentially closing a significant part of the gap. It is true -- no, I mean, it is true after the ramp-up happened. I should also mention that it's a rental agreement. So it's not going to show up in new license growth. So we maintain, by the way, our goal of going to double digit new license growth. But Boeing is bringing rental fees. So it's going to show in recurring, which we like as well. But I think it's not just Boeing. Boeing is a pioneer. And so a decision taken by Boeing has an influence on the rest of the industry. And I think it's going to be helpful also in showing what's possible with 3DEXPERIENCE and I -- we also count on it to drive future growth. But it's the beginning of a cycle. 3DEXPERIENCE was well-adopted in diversification industries. Here, we have the first big decision for 3DEXPERIENCE in our core industries, and this is really, in my view, a turning point.

Maybe I should add Susan to speak on this. Its 18 months -- I mean, this project, this evaluation phase has been running for 18 months and you could expect even the scope of this contract, you have to -- basically we have to compete against all the players, not only the traditional one you are basically seeing in front of us, but all the key players on the manufacturing space, on the ERP space, on the Big Data analytics space. So it's also a significant proof point on the fact that what we have is unique on the market because if you know the Boeing company, they are not taking such a commitment for the next 30 years without making their homework and without having benchmarked basically all the players in town. So we could expect this announcement to have very positive effects on the rest of our install base.

Derric Marcon, Societe Generale. Thibault, can you share with us what was the organic margin increase in Q3, and how do you reconcile the full year target EBIT margin with what you have done in H1, and what you guide for Q3 because if my math are correct, Q3 will be again -- will show again a margin decrease, most significant than what we have seen in H1. And so despite your -- instead for the year, you have a margin increase of plus 30 basis points. So can you help us to reconcile that?

Sure, it's the -- in our business, Q4 is always by far the largest. It's very bad for my blood pressure, but it has been like that for a while already. So we are investing and have been investing. We started investing truly in third quarter of last year. The operating -- organic operating margin variation in second quarter was actually a decrease of 30 basis points. Why? Very simple, I mean, sales and marketing went up by 11%, excluding currency impact, R&D went up by 10%. So we are preparing truly this deployment. We are preparing more success in China. We are preparing all of that. And we are counting on meeting the guidance, which calls for a strong fourth quarter with a good margin, leading us to, for the full year, a 50 basis points improvement in operating margin from an organic standpoint. We also have some dilution coming from acquisitions, roughly between 20 and 30 basis points dilution, yes. So the net of it is in reported operating margin, we are targeting a 30 basis points improvement, which in fact from an organic standpoint is 50 basis points improvement. Is it clear enough? François-José Bordonado: We'll take one question from the call. Operator?

We will now take our first question from Stacy Pollard from JPMorgan.

Can you talk about what really gives you the confidence to talk about H2 double-digit license growth, so maybe discuss the pipeline, is China coming back, things like that? And then secondly, you said cloud was gaining traction, and I know you did discuss this quite a bit, but can you talk about how much, what percentage of revenues is that now would you say or maybe percentage of orders or pipeline, something that we can, sort of, put our hands around? And then, is that mainly SOLIDWORKS or certain industries as the architecture industry which you mentioned, or is it quite widespread?

Thank you, Stacy. The confidence, that's always a difficult question. But I can give you a hint. After all, if you look at our second quarter, you see very decent results in Americas and in Europe. I think Pascal mentioned that, for example, new licenses for CATIA were up double-digit in both regions, in Americas and in Europe. So it shows the dynamic of the business. Second quarter was one of these quarters where China was not at the meeting point. And for sure, I mean, we continue to have consistent decent business with mid-sized companies in China. But we also are targeting large transactions in China with state-owned companies where it's a little more unpredictable. But for the year, we are counting on good growth in China. It is a very important market. It is growing. It's volatile, but we are counting on good growth in China for the full year. And that story -- the whole story, if we -- if China had delivered decent results in the second quarter, we would already have seen double-digit new license growth in second quarter. So that's not too much of a stretch, I think, in betting on second half double-digit new license growth. It just means that China will deliver 1 or 2 good quarters in the second half. Just 1 would be enough to tell you the truth. I'll let Pascal maybe answer on the cloud.

So on the cloud, we are not disclosing the number.

Pollard not to be the only one to say so, so I wanted Pascal to do it.

So a couple of times we'll do it. Nevertheless, what could we say? There is 1 indicator I could share with you is basically the growth quarter-over-quarter is more than 30%. So basically, it's really a strong sign on that dynamic. Coming back to your question, the growth is really coming from the new industries for sure. Mainly the one I just mentioned Life Sciences, CPG, retail, as well as architecture and construction. And also, in all the mid-sized company being services providers, like the design offices, like the architect firms, and the reason is because the business model is really suitable for them. I mean, it has been done for them specifically. So this is where we are. Education is -- obviously was clearly the early adopters because most of the universities right now are willing to move massively to the cloud. It's much more easy for them. And last but not least, if you come back to the point I described to you, maybe it was too long, but anyway, it's a very important topic. When I told you that we are -- we have developed a solution called Cloud On-Premise, I think this is probably the answer for the core industry to adopt the cloud because, again, managing the data is so sensitive for them that -- and the regulation is so, basically, strong, that the only way is to have those kind of capability on their premises but have the affordability, the easiness, the fact that basically to do the upgrade of the versions we are managing the operation for them. So basically you have plenty of benefits to adopt this solution, and we believe this will start in year 2018 because the solution will be available with the 18x. François-José Bordonado: Next question from the call, Stacy, have you finished?

Yes.

We will now take our next question from Amit Harchandani from Citigroup.

Amit Harchandani from Citigroup. I just really wanted to come back on the Boeing contract. You've clearly talked quite positively about its implications. Could you give us maybe a sense of how does this position you competitively at Boeing? And how would you say does this reflect on the competitiveness of your solution vis-a-vis the others? What do you think has clearly enabled you to secure this win? And could you give us a sense for what are the other initiatives you're taking to further widen the gap versus competition? And then I have an unrelated follow-up.

Okay, let me try. I'm not going to say any nasty things about our competition. But I think that it's fair to say that, first of all, in terms of designing planes, we have the best solution on the market. So the real question was twofold in terms of selection. On one side, what is the solution for manufacturing execution system, which was going to bring the benefits that Boeing was seeking. And here, we won the evaluation. So you know the players. But -- and yes, you should know that with DELMIA, and the combination of DELMIA and Quintiq in reality, we have a very, very strong solution. And the other question was the infrastructure. And here, what was key was twofold. On 1 side, what is infrastructure that is able to manage real Big Data. And when you are speaking about all data accumulated by Boeing in the past 50 years, which is really what we're speaking about here, we're speaking about Big Data. And I think it's already seen and known that we have with the 3DEXPERIENCE Platform a real Big Data infrastructure. And the second question was digital continuity. How to provide digital continuity across all value streams for customer like Boeing. And here, too, if there is 1 strength on what we do with 3DEXPERIENCE, it is digital continuity. So I think these were the main factors that helped us win this big decision. And Pascal, maybe you want to add something.

Yes, maybe I could add. Basically the domain you did not cover is the design space, which maybe even for you but there is a revolution going on which is really how to use, as you clearly said, Thibault, the massive set of data you have accumulated over the time to regenerate new design. So this is so-called generative design. And to do that, you need to put a simulation of the core of your design space. And I think we have developed over the time unique capability and it's not by accident if Airbus has selected our solutions to do 3D printing. And I guess, 3D printing, the revolution is not too much on the Sephora. It is -- but the reality is you have to completely change your design processes because the algorithms is providing to you the solution. You define basically the set of constraint, the objective you want to achieve and automatically, the algorithms is calculating all the different options and they are basically giving the choice to select the one you prefer. So it's unique capabilities. And again, I think people were expecting us to win on this front. They were probably be much more skeptical on the fact that we could manage and handle the entire manufacturing space. What is really new is the proof of the point that the 3DEXPERIENCE platform is a business platform because we have been able to demonstrate in a clear manner that the Big Data capabilities, the analytics capabilities, the algorithms, the deep learning, all those technology we have put into the platform is -- are breakthrough and basically is the foundation for the next 30 years for Boeing.

And as an unrelated follow-up, could I maybe get your latest thoughts on the topic of capital allocation? I remember with respect to the Capital Markets Day, there was this talk about certain scenarios in terms of contribution from M&A between now and 2019. I get the impression that you're running a bit below, if I could call it the trend towards the higher end of the M&A scenario. So just wanted to understand has the valuations or have the valuations in the market have caused you to take a bit more measured approach to M&A? And if so, could we expect more in terms of capital returns? So any thoughts on capital allocation would be helpful.

Certainly. Our priority in capital allocation remains in M&A. And yes, you're right, we were expecting to do more transactions. But I think we have a very disciplined way of looking at valuation and selecting the assets that really we want to acquire. So we still certainly have a pipe, and we have ambitions in terms of acquisition. And which would make a lot of sense, I think. But we keep this disciplined approach. There was a little bit of, how to say it, enthusiasm around valuations for a few targets. And so we are paying attention to paying the right price for them. But you can be -- you can quote on us to do the moves that we believe are needed to support our strategy and we clearly see a few of them that would be very helpful. François-José Bordonado: Question from the room?

Just to be clear, you will replace all the windshield installation at Boeing and in the years to come?

Again, we cannot say any nasty things about our competitor. But by the way, I'm not aware of many windshield seats at Boeing it's not truly what we are replacing. It's very minor installation. But they have a Boeing infrastructure, which is based on multiple legacy software from our good old competitors. The usual suspects are there. And will be replaced. The decision is truly -- the deployment of the 3DEXPERIENCE platform as the Big Data infrastructure for Boeing. So it means that yes, current solutions are going to be decommissioned during this ramp-up period I mentioned. François-José Bordonado: We're back to the poll if there is no question from the room.

We will now take our question from John King from Merrill Lynch.

Just a question on the margin, please, Thibault. The trajectory of the margin seems to be very key for EBITDA. Obviously, there is some that's understandable given you have started to ramp up in terms of expanding Q3 last year. But maybe the -- just as we look out into '18 and beyond, this year is being fairly muted in terms of margin acceleration. Can we take that as a sign that your potentially back to more of 100 basis points improvement next year organically, or maybe just the effects that you're absorbing from hedging this year somewhat offset that?

Right. So -- and now be careful and I'm trying to -- when I give objectives on the margin side, I'm being objective at -- for organic margin improvement. So to keep this flexibility to do acquisitions, as we mentioned before, generally they don't come with the kind of operating margin that we have. So after this caveat, we will release our objectives early February with the fourth quarter results. So I'm trying not to give you a hint on these objectives. However, we believe that yes, we will be able, thanks to a better topline growth, to accelerate margin accretion in the years to come. We have been keeping it for 2 years at 50 basis points, but we had a track record of increasing it at 100 basis points before. And we are at a key moment of investments for all the reasons we discussed today, but once these investments are done, we -- with the topline that we see for the future, certainly, we should be able to improve again the margin accretion. François-José Bordonado: We'll take the last question from the call.

We will now take our next question from Mohammed Moawalla from Goldman Sachs.

Two questions. One, just coming back to Boeing, perhaps you can give us a sense of the size and the scope of the increase and kind of the deployment while you may not want to go into specific figures on the size of the contract, but can you give us a sense of the footprint expansion in terms of number of users or seats that this will imply? And secondly, just maybe talk us through the competitive process a bit more, what sort of competitive -- what's the scope of the competitive displacement, not just your traditional competitors but in-house and any other kind of niche players or traditional new competitors you may envisage that you replaced, so if you -- that will be great. And then related to Boeing, sort of, as we think of the implications in other industries, it sounds like for your more classical industries, there could be more profound implications. So what -- how do you think this could change the game in other areas like automotive and industrial equipment in your view as using this Boeing reference? And then, my second question was more on the sales execution side. It sounds like this was a bit better this quarter. But as you look out, we've been about a good year and a half into some of these transitions to selling more enterprise-wide more platform. And where are we in this process? Do you feel that we are kind of now reaching that tail end and you have a lot more control around, kind of, the quarterly close and closure of the pipeline?

So Mo, the size of the deployment at Boeing, I cannot give you a precise number of users of what is projected. But what I can say is that the scope is all factories. So it's a good start. And the 3DEXPERIENCE platform across all value streams. So today, ENOVIA is only there to manage the aircraft configuration and the commercial planes configuration. So it's in the engineering department. The 3DEXPERIENCE Platform is going to be deployed to all interested users, all people having a need to understand value streams and data inside Boeing. So it's a very significant deployment compared to the current one.

But Thibault, could we that we are more than doubling the scope?

At least it's a safe comment, okay? And in terms of competitive process, again, all players were there. And certainly, there is already an infrastructure at Boeing to manage bill of material, to manage manufacturing data. And this will be essentially replaced by the 3DEXPERIENCE Platform. Pascal, do you want to answer on sales execution?

Or maybe I could add one thing on the competition.

Okay.

That what's new is to a certain extent it was one of the first real confrontation with all the capital goods company moving in our space. I'm sure you can put names behind. And I think it's -- again, it's a validation of the strategy being a pure play because being a pure play means we stay focused on the software piece. We basically put all the technology needed into it, is something, I think, making the difference on the market right now. On the sales execution, I think, as you say, we are making progress. But you notice that in some region of the world, we are still basically trying to control the sales cycle for the closing. China is a good example of that, the U.S. as well because we had basically difficulty in Q1 and Q2 is going much better, and we have good visibility for the rest of the year. So maybe, Thibault, you could complement, but as far as I'm concerned, I think we are not yet here.

It's fair to say we made progress. It's visible in North America, it's visible in Central Europe, which was also a good region. And what is clear, too, is that we are now in a process of continuous improvement, I think, in sales execution. So it will never stop.

Can I just clarify quickly just this deal is including the entire Boeing supply chain or part-inclusive?

No, it's not. It's only Boeing, which is included in the transaction. But when you want to monitor value streams, it's very clear that you want to monitor them also on the supply chain side. So there will be an impact on the supply chain in aerospace. I think that's very clear.

So that would be additional scope?

Yes.

Add one comment. It's a good sign because as you can imagine, the conditions are all the same. François-José Bordonado: One very last question.

We will now take our next question from Charles Brennan from...

Are you already able to quantify -- will you be able to quantify the client benefit from the deployment of your solutions with Boeing?

Well, maybe not yet with Boeing because it's better to quantify when the implementation is done. But we have good ideas of what we are able to do inside customers. And frankly, I think that so far, and so -- before big deployments of the silicon platform even, what we are able to demonstrate is very clearly again, in productivity and design, which is very substantial because when designs have to be modified, the fact that we're able to capture the methodology and to generate automatically the modification and design, is generally bringing an 80% productivity gain at design modification compared to other solutions. So overall, in design, I think we can claim that we -- customers can gain 30% in productivity. In production, it varies a little bit, but we are safely between 10% and 15% reduction in manufacturing cost, thanks to our solution. In logistics, likewise, we are in optimization of logistics between 10% and 15% improvement, speaking of the employment of trucks, for example, for delivery or on optimization of a workforce. This is the kind of improvement that we are able to do. And then in reduction of defects, it's extremely substantial. If we look at customer's cases, here are the percentages in reduction of defect in design. They approximate the 75% reduction. So it's the reason why my boss is never happy with me because he believes that I have -- which is true a contribution in doing the pricing of our software and that the value we capture with the pricing of our software is frankly appalling, so.

And there is also 1 indicator we could have is basically the time to market. If you take the aerospace business, the industry is measuring what they call the cost of avoidance, which is nothing more than a penalty if you pay it on time. And the cost per plane is a range between EUR 10 million and EUR 100 million, and we have demonstrated that we could reduce this number by 3. So just to facilitate the ramp-up and basically do a better planning with all the resource allocations. The question is not too much the value we are bringing, as you say, Thibault, it's basically our ability to capture piece of this value which is becoming the key topic. François-José Bordonado: Okay. Thank you very much for your attention today, and we will be back with the results of our third quarter.