Ladies and gentlemen, thank you for standing by, and welcome to the Fourth Quarter and Full Year Dassault Systèmes Earnings Presentation. [Operator Instructions]. I must advise you that this conference is being recorded today, Thursday, the 6th of February 2020. And now I would like to hand the conference over to your speaker today, the Vice Chairman and CEO, Bernard Charles. Please go ahead, sir. François-José Bordonado: Thank you very much, Priscilla. Thank you for joining us on our earnings conference call. Sorry for the delay. With Bernard Charles, Vice Chairman and CEO; and Pascal Daloz, Chief Operating Officer and CFO. Dassault Systèmes results are prepared in accordance with IFRS. Most of the financial figures on this conference call are presented on a non-IFRS basis, with revenue growth rates in constant currencies, unless otherwise noted. Some of our comments on this call will contain forward-looking statements that could differ materially from actual results. Please refer to today's press release and to the Risk Factors section of our 2018 document reference. All earnings materials are available on our website, and these prepared remarks will be available shortly after this call also. I would like now to introduce Bernard Charles.

Thank you, François-José. Thank you finding us on this call, on our earlier webcast. Summarizing 2019 in a few words, it was a year where we will achieve our 5-year plan, delivering on our 2019 financial objectives, setting -- set the stage for multi-decade expansion. First, 2019 represents the achievement of our 5-year plan, 2014 to 2019, to double EPS. We are delivering against our commitments, thanks to the sustainability of our key growth drivers. 3DEXPERIENCE now represents almost 1/3 of related software. We are reaching more industries on achieving further end market balance. Diversification Industries represented over 1/3 of our software revenue in 2019, with 3DEXPERIENCE enabling this. Second, looking at the year 2019. We met our annual financial objectives, with revenue up 13%; operating margin, up 32%; earnings per share, up 17% to €3.65. And as you have seen from our guidance, we envisaged 2020 to be a year with a solid financial performance. Third, we unveiled this morning that we are opening up new horizons in health, on life science with 3DEXPERIENCE for the virtual twin of human. To support our multi-decade ambition, we will focus on developing our leadership in life science and health care, continuing to extend our investment on leadership in manufacturing industries, on advancing forward in the promising infrastructure on cities sector. We also announced this morning the appointment of Pascal Daloz to the newly created position of Chief Operating Officer. In addition to continuing in his role as CFO, Pascal, a sample of top talented new generation of leaders on -- setup a new operational executive committee. We want to ensure excellence in operational decision-making on preparing the new leadership team that will carry forward our ambitions in the future in a seamless manner. Finally, we are introducing new product lines reporting beginning of 2020 to align our disclosure with these three sectors to ensure that you have a clear line of sight on our progress. We have learned a good deal since 2012 when we opened a new horizon, introducing our purpose on unveiled 3DEXPERIENCE on the 3DEXPERIENCE platform. At the time, I shared my belief that the 21st century would be a time of unprecedented invention and innovation by providing business and people with 3D experiences to imagine sustainable innovations, capable of harmonizing products nature on life. In 2012, we all saw dark imaging, the 3DEXPERIENCE platform would become the most powerful vehicle for sustainable innovation. I couldn't have imagined that the proof points over the last 7 years would be so real. At the time, we were largely focused on products in a world of things. But through our research and investment, Living Heart, Living Brain, 3DEXPERIENCity, our multiphysics multiscience capabilities or now the Medidata acquisition, we have discovered that we can go further. And so we are extending from things to life. We also realized that while social industry experience made good sense, it was not enough. Experiences are human, the power to create a better world whether as a worker, passion or citizen. So we are speaking about human industry experiences indeed. To do so, we see 3 sectors of the economy that have a significant impact on each on every one of us: Life science on health care, infrastructure on cities and, of course, manufacturing industries, on where we believe that Dassault Systèmes can become a global leader. Critical to this is virtual twin experiences for Dassault Systèmes. They have been part of our DNA for more than 35 years, and we believe they can be instrumental to our contribution to a sustainable world over the next 20 years. There was a before and after 1989, the year where we created the first virtual twin of a gigantic airplane, the Boeing 777. It was before and after February 9, 2012, when we shift the central cavity of the industry from product to experience. There will be a before and after the virtual twin experience of human body, which will have profound implications for the future of health care, life science discovery on the human experience. To ensure that all operational decisions are made in a very coherent manner according to our corporate strategy, we are extending the scope of responsibility of key executives on establishing a new leadership system, combining talents on multigenerations led by Pascal, Pascal Daloz as Chief Operating Officer. Underlying the construction of our new operations executive committee are 2 important themes. First, we want to ensure continuity as we move forward by taking steps in advance to prepare our leadership transitions. Second, a key characteristics of our long-term performance, on long-term value in Dassault Systèmes, has been the ability to ensure resiliency of our performance. In other words, to see and manage in a seamless fashion, key transitions in our business. In addition, we have strong leadership on that across 3 sectors and all across the organizations on strategy to operational excellence, research and development. Congratulations, Pascal. Let me turn over to you.

Thank you, Bernard. Hello, and thanks for joining us today. I would like to share a summary of our view, followed by more detailed financial and business review and finishing up with our new revenue reporting and 2020 financial objectives. So let's start with the year 2019 performance. With respect to our full year financial results, both total revenue and software revenue increased 13%. We had a broad-based organic growth, with total revenue and software revenue, up 7%; recurring software, up 8%; and services, up 9%. EPS increased 17%, with our operating margin at 32%, led by 100% -- sorry, 100 basis points underlying improvements. Our cash flow from operations increased 32% to €1.19 billion. Zooming in our fourth quarter, financial results were in line with our guidance. This was the case for the revenue and the operating margin. EPS came in ahead on a lower effective tax rate, reflecting final year-end estimates refinements. SOLIDWORKS, SIMULIA and Centric PLM delivered good growth. Results from Medidata are including as of October 29 when we completed the acquisition. And as we outlined our Life Science Day on November 30, we see a significant growth opportunity, and we are off to a good start. Looking in our 3DEXPERIENCE performance. From a growth perspective, 3DEXPERIENCE software revenue increased 22% in 2019, following the 24% growth in 2018. From a penetration rate or mix perspective, 3DEXPERIENCE increased to 29%, up 400 basis points over 2018 and 800 basis points over 2017. From a license revenue perspective, 3DEXPERIENCE licenses revenue grew 12% in 2019. And as you know, we had significant growth on the subscription side, added to the total 22 software growth I'll mention. 3DEXPERIENCE has been an important driver of our diversifications. EDF, with whom we entered into a long-term partnership in June 2018, has expanded the adoption of the 3DEXPERIENCE platform. EDF will deploy our capital facility information excellence industry solution experience to access real-time project data and to create the digital twins of nuclear plants whether they are at a design, construction or operational phase. This will enable EDF to have single source of tools for every stage of the planned life cycle, from early design and engineering to constructions, operations and decommissionings. With these deployments, EDF expects to increase by 30% its operational efficiency and well support the partnership growth of strengthening plant performance and the overall competitiveness of nuclear core. Moving to industry highlights. Following double-digit growth for our 3 largest industry in 2018, we had some mixed performance during 2019. Aerospace & Defense software revenue was up high double digits on a broad-based trend. Transportation & Mobility grew mid-single digit, with a number of automotive OEMs making significant new investments, while we saw a slowing of the automotive supply chain. Industrial Equipment also had a mid-single-digit software revenue growth in 2019. However, we saw some improvement in H2 compared to earlier in the year, and this is visible in part in certainly more stronger second half results. With respect to our Diversification Industries, they would have represented about 50% of our software revenue on a like-for-like basis, assuming Medidata were consolidated with DS for all of 2019. In Home & Lifestyle, Centric PLM is leading the way, working with more than 12,000 well-known brands around the world, helping them increasing comp sales, improve inventory management, reduce logistic costs, translating into more new products, increased efficiency, faster time to market and improved sustainability, thanks to less waste. Centric PLM leadership is evident with a strong growth in bookings, new client acquisitions and revenue during 2019. In Consumer Packaged Goods, we are seeing a strong appetite for sciences. Creating the right formula is more complex than ever. Consumers are demanding more quality, transparency and global and local regulatory bodies are creating more stringent guidelines for raw materials and product claims. CPG brands and contract manufacturers need system in place to manage the product innovations. Regulatory, quality and cost constraints are a key driver for the business success. Last quarter, I mentioned our perfect formulation solution well-structured to address these issues. In Life Sciences, we are consolidating our position in med devices segments. For example, a leading manufacturer in this sector, B. Braun, are selecting the 3DEXPERIENCE platform and the life -- and the License to Cure for Medical Device industry solutions to accelerate the delivery of innovative, safe and truly compliant medical devices. These solutions will allow them to eliminate scattered processes and data and to embed regulation as an assets, optimizing quality and compliance and reducing cost and time to market. These solutions will be deployed among 13,000 users. Looking at our software results. License and other software revenue increased 6% for 2019 and 2% in Q4. On an organic basis, license and other software revenue increased 3% for the year with growth flat in Q4. As you may recall, we began 2019 with a license revenue growth target of 10% to 11% in constant currencies. And we ended the year, as I say, with 6% growth with the 2 major areas of change being weakness in the automotive supply chain, decisions time line shift by clients due to internal customers factors. And license and software revenue totaled €1 billion for 2019. As we have maintained our revenue growth objective unchanged since the beginning of 2019 before having Medidata, recurring software and services compensated for the software license growth. Moving to our recurring software, it represented 72% for 2019 total software. For the full year and on an organic basis, recurring software increased 8%, at the high end of our growth objectives. This represents an improvement of growth rate of about 200 basis points over 2018 compared to a target organic increase of 100 to 200 basis points we shared with you at the start of 2019. In comparison to 2017, our organic recurring software growth is up 300 basis points, and both 2018 and 2017 growth rate were on an IAS 18 basis. For the fourth quarter, the organic recurring software revenue growth was 5%, reflecting continued strong support dynamics globally, offset in part by the IFRS 15 accounting treatment, which affect not only the quarter-to-quarter variations for subscriptions, but also the year-over-year. In fact, in Q4 '18, under the IAS 18, subscription revenue growth was up sharply in part related to catch-up on renewals. As a reminder, revenue recognition rules are different under IFRS 15, and we have been in 2019, vigilant to renew subscriptions at each quarter end. Hence, the amount of catch-up was much lower in Q4 '19. Moving to our software performance by regions. The Americas had a solid fourth quarter and year, led by strong growth in subscription revenue and the contribution from acquisitions. In Europe, we continue to have a contrasting view. Northern and Southern of Europe had a good growth all along the year, and Germany continued to reflect macro weakness that we have seen most of the year. Finally, also record Q4 2018, where we had a very strong 3DEXPERIENCE activity, notably France. Asia software revenue increased 7% in 2019, led by China, up 16%. In the fourth quarter, Korea saw some improvements, and China grew 11%, slowing from earlier in the year. Zooming in on our software performance by brands. CATIA had a contrasted H1 and H2 performance, with software revenue up 8% in the first half and weaker results in H2, bringing its growth for the year to 6%. Keep in mind that last year, CATIA was growing at 4%. What was very clear, however, was the traction with 3DEXPERIENCE, with CATIA which is posting 3DEXPERIENCE software revenue growth up just over 30% for 2019. Following double-digit growth in 2018, ENOVIA software revenue increased 5% in 2019, reflecting the combination of a high comparison base, particularly in Q4 as well as the extended decision-making time frame. ENOVIA continued to maintain a high mean rates over its key competitors. SOLIDWORKS' software revenues saw better result in H2, with fourth quarter growth of 9% on the improving license performance and a very solid support revenue growth around the globe. Just as a reminder, in Q4 2018, SOLIDWORKS grew 12% so it was not an easy comparisons. Moving to other software. DELMIA had a very strong, good fourth quarter and year, with a strong offer in manufacturing. SIMULIA is benefiting from its broader multiphysics portfolio, and we are seeing an improving performance for BIOVIA. DELMIA Quintiq had a more difficult year with many opportunities, but some operational issues that slow its ability to convert this to sales. I believe they are now largely resolved and behind them. During 2019, Centric PLM expanded its industry-leading position, as highlighted earlier. Turning to Medidata. Its revenue growth was driven by Rave.co, Well Plan and strong growth in Rave-attached products as well as professional services, a large proportion of which is recurring services. From our Life Science Day, we shared that these 3 categories are expected to drive the large majority of its growth between now and 2023. Medidata's data and analytics business, which includes Acorn AI launched in early 2019 and its commercial analytics from 2018 acquisitions are the early stage and part of our longer-term business plan. For 2020, we are estimating Medidata revenue growth at about 13% in constant currency, within the target range of 13% to 15% growth we see over the '20 to '23 time frame, embedding revenue synergy in the later part. One final pump is the high retention rate Medidata ended the year with, on par with 2018, so a strong endorsement from its client base. Turning briefly to services. Revenue increased 9% for the full year on an organic basis. This was principally driven by 3DEXPERIENCE services engagements up double digits. In Q4, on an organic basis, service fees revenue was lower by 1%. This reflects a large capture for Quintiq in the year ago Q4, as we noted at the time as well as a high base of comparisons of 3DEXPERIENCE services growth with the volume ramp-up. For 2019, our operating profit increased 17% to €1.3 billion. Our operating margin was up slightly at 32%, thanks to an organic improvement of 100 basis points, largely offsetting 120 basis points of acquisition dilutions. Currently -- sorry, currency had a positive impact of 30 basis points. Moving to the earnings per share. EPS increased 17% to €3.65 in 2019 with a €0.06 contribution from Medidata. Our effective tax rate decreased by 1.8 percentage points to 26.5% related principally to the favorable patents and software treatments in France. Our operating cash flow was €1.2 billion in 2019, up 32%. The principal contributors were growth in the net income and noncash items, accounts receivable and the lower tax down payment in 2019 related to the 2018 U.S. tax change on a foreign-driven intangible assets CD. Contract liability were up 8% in constant currency and perimeters. And finally, following the acquisition of Medidata, our adjusted net debt, including leases, to be compliant with IFRS 16. So to EBITDAO ratio for 2019 was 2.5x, right in line with our expectations. Before moving to our financial outlook, let me share changes we plan to make to product line reporting to reflect our new mission and also as a consequence of integrating Medidata. Our first grouping will be industrial innovation software revenue, where we will give a total software figures and then break out CATIA and ENOVIA. In addition to those -- these 2 brands, the first group will include SIMULIA, DELMIA, GEOVIA, led by EXALEAD and 3DEXCITE. The second grouping will be Life Sciences software revenue. And here, we are -- we will combine Medidata and BIOVIA. And the third product line will be mainstream innovation software revenue, and this will include SOLIDWORKS, Centric Software, 3DEXPERIENCE.WORKS and 3DVIA. In this category, we will also break out SOLIDWORKS. In the Q4 presentation on our website, we have provided historical information for this grouping. Now let's move to our 2020 financial objectives. For total revenue, we are targeting growth in the range of 21% to 23% in constant currency. Based upon our currency assumptions, this will lead to a reported revenue range of €4.84 billion to €4.89 billion. For software, our growth target is 22% to 23%. Recurring revenue will be at the biggest -- will be the biggest contributor to this growth, increasing in the range of 28%. Assuming Medidata has been part of Dassault Systèmes for all 2019, our recurring software revenue growth target on a like-for-like basis would be about 9.5%. Our operating margin range is about 31% to 31.5%, representing a decrease of about 0.5 to 1 point. On an organic basis, the operating margin improvement we are targeting is between 80 to 130 basis points, excluding currency. Our EPS range for 2020 is €4.15 to €4.20, growing 14% to 15% based upon an effective tax rate of about 26%. Q1 EPS growth will be in the range of 3% to 9%. For Medidata, we are targeting 2020 revenue growth of about 13% in constant currency, and they are entering the year with a coverage around 93% of the total revenue growth targets. From an operational perspective, the goal is about -- of 200 basis point improvement in its operating margins. Now to give you some further color from a structural perspective value as well as a pipeline timing. The growth in license revenue is weighted to the second half of 2020. More specifically, we would expect license growth in the range of 5% to 10% for 2020. And Q1 assumed a decrease of about 5% to stable on a high comparison basis, and reflecting macro and end markets as we see them presently. We are not able to fully factor the potential impact of health emergency, especially in China, where the temporary absence of freedom movement can keep sales. To sum up, as Bernard indicated, we are beginning a new horizon, setting the stage for the coming decades while advancing towards our 2023 financial goals. We also want to share with you that our success will not be possible without the intelligent dedication and pride of all the Dassault Systèmes employees, energized by a purpose, giving strong meaning to our daily expenses as employees, citizens and human beings. We hope you will put a save the date on your calendars for our Capital Market Day in Paris on June 12. And Bernard and I will now be happy to take your questions.

[Operator Instructions]. And the first question comes from the line of Jay Vleeschhouwer from Griffin Securities.

I have three subjects I'd like to ask about, starting with SOLIDWORKS, then Medidata and then finishing up on cloud. For SOLIDWORKS first, Bernard, I'd like your thoughts on the very long list of objectives that SOLIDWORKS seems to have over the next year or more, including accelerating its unit volume growth. It looks to me like in 2019, units were up just about 2% to maybe 81,000 or so. So perhaps you could comment on that and your expectations for driving better unit growth, additional objectives that SOLIDWORKS seems to have include doing more large transactions than has historically been the case. 3DEX platform, DELMIAWORKS, [indiscernible] SOLIDWORKS and marketplace and so forth. So it's a pretty long list of objectives. And perhaps you could just give us your prognosis for that and how you're thinking about the SOLIDWORKS growth over time. And then I'll finish up with my Medidata and cloud questions.

Good to talk you again. I will let Pascal make whatever remarks he wants to do about SOLIDWORKS, but let me just take this opportunity to say that the main objective for SOLIDWORKS is the platform game-changer approach that we will be introducing, so at 3DEXPERIENCE World next week in Nashville. And this is about having SOLIDWORKS users enjoying the power of a platform to expand the use of what they love the most, the SOLIDWORKS capabilities with mobility, native cloud, web-based SOLIDWORKS experiences for one. The second aspect of it because today, SOLIDWORKS is only mainly available on a workstation on the PC, so the mobility of SOLIDWORKS. The second big thing is being powered by the platform is to be able to move from 3D design and assembly to basically real virtual twin experience using all the type of SOLIDWORKS-like roles on the platform. That will be revealed next week with very concrete availability plan. And that's, I think, going to create the next 20 years of growth for SOLIDWORKS. To be noticed that the growth accelerated in revenue, Pascal, I will let you comment on that. And also, we -- while the unit might be seen as growth as modest, the number of new clients are significant. Pascal?

Yes. Just to echo what Bernard was saying, we are talking about 25,000 new customers. This is the order of magnitude. And in terms of units, we are close to 80,000. So I'm sure, Jay, you will appreciate that those numbers are big one and not so easy for the competition to replicate, right. Now if you look at the track record for SOLIDWORKS for the year, as Bernard mentioned, yes, you're right. We started with a growth between 4% to 5% for H1. And you have seen that we land by 9% for the Q4, knowing that last year, Q4 2018, was growing at 12%. So I think we are seeing a significant improvement of the situation, especially in Europe and Asia. We see the growth in the U.S. is probably more modest compared to what we have seen in the other parts of the world.

And to complete to be -- to add what I said this morning, Pascal, I might mention something which is important. There is a lot of piracy around SOLIDWORKS. I would say, giant piracy. We don't want to be bolder on that topic. We continue to improve the compliancy processes. But clearly, those clients are using it, without paying, to be simpler. They -- I think they will progressively pay and we are going without being bolder. We are going to progressively introduce the idea that subscription will be mandatory. And that shift is going to be progressive and will be converging because with cloud, that's the case. So you can imagine that we have clearly high promise both on value, footprint, platform phenomenon on the evolution for the years to come, both for partners and clients.

On Medidata, could you comment on any product integration or cost synergies that you've accomplished thus far? And what you're thinking of, is for one or both of those for 2020 in terms of further integration, perhaps with BIOVIA and cost synergies? And for Pascal, guiding to a 20% operating margin for Medidata for this year. However, given the magnitude of the amortization of intangibles for that acquisition, would it be fair to say that the IFRS operating margin for Medidata would be closer to the mid-single digits?

Well, the first thing, before I leave the answer to Pascal, is we are thrilled to have Tarek Sherif and Glen de Vries with us. They are top leaders. They are part of the family. We feel part of their family. They have built the start-up to be almost €1 billion company. On the other -- significant ambition to lead us together in this new sector of the economy, which is really life science and health care. And above all, this is a big thing. And I think we are in a position to realize our mutual groups coming from different perspectives, and I think the setup done with Pascal is a great one. So, Pascal, you can comment on the short-term steps.

So if I start by the third part of your questions, the vast majority of the operating margin improvement is coming from the growth. Because now our data have been reversed. We have the infrastructure in many countries, and there is no need for them to invest as much as they used to do to develop some presence in some countries. So clearly, for -- and I've been very excited during the Capital Markets Day, that the synergy will come later in the plan because the primary objective is to continue to fulfill the growth. That's the point. Now coming back to the first part of your questions, we already have seen some synergy between BIOVIA and Medidata, especially with ONE Lab solutions. As you may know, ONE Lab is used both for the preclinical. And we have a company and especially, for example, the CROs, so significant partners and also customers, Medidata, and they are more and more interested by also endorsing and adopting the solution of ONE Lab. So clearly, it's mainly on the commercial side. For 2020, we do not want to mix the two success because we want this to be structured. So the way we do it, we have selected the number of customers we want to approach jointly with a very well-done set of solutions and combined value proposal. And Tarek and Glen are guiding this approach across the board.

Okay. And then finally, on cloud. At the 2016 Capital Markets Day, the company gave some very explicit forecast for your cloud contribution in terms of user growth, for example. And I know that's a few years ago already, but we've not really heard from the company in terms of explicit contribution of your cloud business, although you've certainly talked about your products deliverable on the cloud. Would you, as part of your new disclosures, consider giving more regular updates on the contribution from maybe the cloud business? And -- well, that's the question. Would you be willing to provide more like that?

So Jay, I love you for one reason , it's because -- you're right. I mean we -- as part of the new revenue reporting we disclosed this morning, and I briefly spoke about, there is one thing I didn't touch, is the willingness on our size to certain extent to report the different business model we have. One, we call it software as a license, and the other one is software as a services, which is nothing more than what you are calling the cloud. So to answer precisely to your questions, we want to make our own experience within this year before to start to disclose the number in such a way. Because we need to learn how to do it. We need also to learn how to guide you guys because those are two different business world, and we do not want to mix up. So clearly, I have set up the team. I have set up the framework, all the reporting line internally to make it happen. And if it's -- I mean, if we conclude this is the right way to do, in 2021, you will have the visibility on both line.

And the next question comes from the line of Stacy Pollard from JPMorgan.

Looking at your guidance for 2020, when I subtract out Medidata, it looks like the revenue growth is underlying maybe around 4% to 7% or maybe that was 6% to 9% in constant currency. Does that sound about right? And then you used to talk about licenses accelerating into the double digits. Obviously, tough comps and macro today. So we know where we stand today. But is that still possible in the midterm? And then the third component, is there any impact from sort of a conversion to subscription, perhaps in SOLIDWORKS or something over that midterm?

So on, again on Medidata, I gave you almost all the numbers is -- because it's in the guidance, we took 13% growth, excluding the currency effect, okay? I told you that the like-for-like growth is 9.5%. And if you -- to some extent, you do the reverse engineering and you look at -- it should be the organic growth as a consequence of the rest, you will land to much more close to 8% than 6%. So at least this is the way the guidance has been built.

So it was around 8% organic. And then mid-term opportunity to get license into double digits? Still...

I was speaking about the recurrent part, right, Stacy. Now for the digital license, where we are coming from is the following. First of all, the pipeline is backloaded, and especially on H2. Okay. No surprise. It happens, but almost every year now since the last 5 years. Two, the base comparison is, to some extent, helping us on the second half. And three, with -- as I was very specific this morning, I took some cautiousness for Q1 because the Chinese situation is providing some uncertainty, and we believe the license is probably the one going to be impacted if the situation is stay and they waited for a certain time. So combining all these effects, we are relatively confident that we could come back to high double digit -- high single digit, maybe a double-digit growth on this 1/2 on the license. To a certain extent, this is what happened for SOLIDWORKS. Stacy, you remember, we started at 4%, and we are landing at 9%, and all the indicators we have are giving some confidence about it.

And the next question comes from the line of Michael Briest from UBS.

And I forgot to say, Pascal, congratulations on the new role. You've got a lot of paths to juggle.

Thank you, Mike.

Just a couple from me. Just in terms of SOLIDWORKS. Bernard, you talked about an improved compliancy process there and mandatory subscription. I take it you mean sort of mandatory support. Was that a driver in Q4, the strong growth? Are you being more forthright on auditing your clients? And what proportion of clients today actually take support, if you like, on SOLIDWORKS? And then I've got a couple more for Pascal.

Well, Michael, I don't call this support. Let's be clear. When we deliver such kind of incredible, functional deliveries on new roles every year, it's not support anymore. It's really true subscription on expanded scope. So we are changing really the approach because this is not support anymore. This is subscribing to significant evolution on capabilities that we deliver. And that is a big difference because, in some way, this can easily justify the fact that it becomes mandatory. It's too easy for too many clients to pay once and get all the update for free forever. And we are going to change that rule.

But I mean, how -- are you introducing a program of, I don't know, going around and checking on license compliance? How would you actually enforce this unless you had cloud-based delivery and sort of keys to access the products?

That will be presented to the partners and customers first.

Okay. Understood. And then, Pascal, I think you said on your comments on the 3DEXPERIENCE that licenses were up 12% for the year. I think at the 9-month stage, they were up 40%. So we saw quite a big slowdown in Q4. And can you talk to the causes of that?

Oh, Michael, when the license growth is flat for 2 quarters, whenever the mix is representing by 3DEXPERIENCE platform, automatically, you have the consequence. So 40% and flat on the second half, even if we are increasing the mix to a certain extent, you land with almost what I provided to you. What is missing is maybe last year, we had 1 or 2 very large deals at the end of the quarter. Those 2 large deals are missing. But on the other hand, I told you this morning, we had more than 140 opportunity exceeding €1 million with 3DEXPERIENCE platform for the full year. So I think less big contract to a certain extent, but much more sizable opportunity. This is the way the pipe is now.

And then just finally, I appreciate you've got Medidata on board and it's at least historically been more CapEx-heavy. What guidance you're giving for CapEx and interest expense this year?

The vast majority of the CapEx for Medidata was coming from the cloud. And just because we have some of our capacity being available, the extra CapEx you could expect from Medidata would be primarily redirect to the usage of our whole capacity. So I'm not expecting significant changes compared to what you have seen previously.

And on interest?

Sorry, Michael?

Your finance charges or interest expense.

Not sure to answer.

Well, how much was the interest on the Medidata on going to chunk cost every quarter?

Well, Michael, I do not have the information in front of me. So if you don't mind, could send to you by e-mail. Okay? Thanks.

And the next question comes from the line of Jason Celino from KeyBanc.

As it relates to SOLIDWORKS and the move to more cloud subscription and more user compliance, what type of -- what do you anticipate customer and channel feedback to be?

Very good because that's the platform phenomenon. I think when you apply such rule for the same scope, meaning a license on PC, it's very different from moving to subscription of service and capabilities with the platform power. So as the scope of the offer is evolving, it's very easy in my mind to articulate why this is the way to go. And we know ultimately that most at a certain horizon, most of, if not all, in the mainstream market will be one way or another cloud-based, which, by the way, is the converging point. So we didn't change the rules on the desktop only. But as you go platform, it becomes a logical value for everyone. So we have tested already with partners. And I think they see the rationale and they see the value. So we -- but we've said we want to be doing it with good value for everyone, including the [indiscernible].

Great. And one question for Pascal. Looks like Asia was up 6% growth for the quarter, and you mentioned Korea and China were double digits. Can you just reconcile maybe some of the other areas that weren't as strong as China and Korea?

Well, the Japan is almost flat. India is growing mid-single digits for the full year as well as AP South.

Got it. And is Japan mostly flat just on automotive?

No, it's not on the overall software. And again, the pressure is coming from the auto supply chain. Same situation that we are facing in Germany. Having said that, you remember that we are making good progress in Japan as well. We signed a big contract with Toyota. So it's not because, to a certain extent, you are not seeing the momentum in the numbers that, however, the 3DEXPERIENCE adoption by the Japanese market is not half. So certainly new.

And the next question comes from the line of Neil Steer from Redburn.

I just have a couple of quick ones, if I may. And firstly, Pascal, many congratulations for your new role. Just backing out the commentary on the services growth. It looks, obviously, if we include the contribution from the Medidata business this year, looks to say on an organic basis, services are likely to be flat or minimal growth. Is that the case? And can you just explain that dynamic over 2020?

For the services at large or for Medidata as well?

No. Just take Medidata out of the equation. Just the non-Medidata services in 2020. What's the sort of revenue trajectory there?

Okay. So we, again, for -- we see a good momentum for all the 3DEXPERIENCE-related engagements. So I think we will continue to grow at high single digits on this. The question mark is, as I was stated clearly this morning, we had some issues with Quintiq. And Quintiq, it's a large services revenue in this business, not only offering software, but for one, you spend in software, you almost have 1.5 in 13 and this is where the gap is coming from. And on Boeing, I have been explicit this morning. We would expect some reduction on the services bill around 20%. And if you combine those numbers with Medidata, you land to the 19% growth I put in the guidance.

Okay. So if you -- so ex Medidata, it looks as though they will be sort of flat to sort of just a little bit of a change in the services growth. A separate question, on SOLIDWORKS, you've mentioned a couple of times this morning and also on the call now that you believe there's quite significant piracy there. Can you just explain the situation that has occurred whereby customers in the past have been able to buy a license? And it seems to be that you're describing year in, year out they are getting updates and support for licenses they are not entitled to. Is there no audit process? Or how do the sort of management information systems that exists that, that has actually taken place?

Yes, of course. We have a compliancy team on processes for that. But piracy is piracy. It's a significant piracy. So we are evolving with the systems to reduce that factor on the -- the one who want to have piracy are very smart. But we think that with evolution of the platform on mobility, on connectivity, this is changing. The profile of usage is not anymore 1 client on 1 PC. When you go platform, it change the landscape about how the profiling of usage, even the affordability, the entry price for, let's say -- what we call 3D Creator, which is mainly SOLIDWORKS native on the web, on the phone or on a tablet, is providing a wide range of solution that will contribute to use piracy.

But to complement what Bernard is saying, we have the rights to do what is -- in every contract we signed, we have it. But when you are targeting the mainstream market, if you want to do it in the 200,000 customers we have, you need an army. So we need to find a technical way, a technological way to do it. That's the reason why combining the cloud approach with a subscription base is really the way to handle this.

Okay. Without wishing to go into too much detail, is this more of a channel issue than it is a selling issue? Or is there -- and does that have implications for the management there?

Well, I think it's also making sure that every users will see the value of being in a more regular environment on -- that's why I mentioned the mobility, the collaborative cloud online and all those services that are making this, even for those who have been doing piracy, at the end of the day, a good deal to pay. And that's what we want to do. This is why we want to be constructive looking forward because they, on the other hand, they do love our software. We want them to continue to use it, but to really solve that issue. Okay. So thank you very much all of you for participating to this call. Thank you for your interest. As you know, we are setting up a very wide horizon. It's very exciting despite the uncertainty for the 2020. And we hope to see you soon on, as Pascal said, save the date for the June--

Conference.

12 information, and we will talk to you, of course, in April for the first quarter results. Have a good day.

Thank you so much. That does conclude our conference for today. Thank you for participating. You may all disconnect.