Michele Katz - IR Bernard Charles - President and CEO Thibault de Tersant - Senior EVP and CFO

Jay Vleeschhouwer - Merrill Lynch Chris Glinberg - UBS Neil Steven - Redburns Rajesh Bala - Credit Suisse Marc Rode - MainFirst Bank Lawrence McLeo - Pictet

Thank you for standing by, and welcome to the Dassault Systemes Q3 2007 Results Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session. (Operator Instructions). I must advise you that this conference is being recorded today, Tuesday, 30th October 2007. I would now like to hand the conference over to your first speaker, Michele Katz, U.S. Investor Relations. Please, go ahead.

Thank you for joining us for a review and discussion of our third quarter and year-to-date financial performance. On the conference call are Bernard Charles, our President and Chief Executive Officer and Thibault de Tersant, Senior EVP and CFO. Our financial results are prepared in accordance with U.S. GAAP. In addition, we believe it is helpful to provide you with supplemental non-GAAP financial information. On this call we will discuss our revenue, operating income, operating margin and EPS on a non-GAAP basis before deferred revenue write-downs, amortization of acquired intangibles, stock-based compensation expense and one-time tax restructuring benefits. For reconciliations of the differences between these figures and our U.S. GAAP figures, please see the tables included in our earnings press release, which has been posted on our website www.3ds.com. You will also find in our quarterly presentation information explaining the impact of currency fluctuations, as well as data related to the reclassification of CosmosWorks to the Mainstream 3D business segment from our periodical statement. In addition, on our website is the webcast from this morning's London presentation. Some of the comments we will make on this call, either as part of the prepared remarks or in response to questions, will contain forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. Information about the principal factors that could cause actual results to differ materially from forward-looking statements can be found in today's earnings press release and in Item 3 of our 2006 20-F. And now I would like to turn the call over to Bernard Charles.

Thank you, Michele. Dassault Systemes had a satisfactory third quarter performance despite pronounced currency headwinds. We are above constant software revenue growth at 17% in constant currencies, demonstrating good underlying demand. All our sales channels are contributing to our third quarter and year-to-date results. We continue to make solid progress in our PLM Value Channel transformation and SolidWorks had a very good quarter. We're progressing on our 3DVIA strategic roadmap with two major initiatives this quarter. Recently, we acquired Seemage, an innovative start-up to further our vision of leveraging 3D data for product documentation and other applications. And, jointly with Microsoft we introduced Virtual Earth - 3DVIA Shape. Our growth drivers are in place and delivering results. I believe DS is positioned to further grow its market share in 2007, thanks to the investments in further strengthening its first class brands and go-to-market strategies. Now, let me turn the call over to Thibault.

Thank you, Bernard. As my remarks will be based upon our non-GAAP financial information, let me begin with a brief review of our GAAP and non-GAAP reconciliation figures. For the 2007 third quarter, non-GAAP revenue excludes deferred revenue write-down of EUR2.2 million. Operating income, operating margin and earnings per share exclude the deferred revenue write-downs and before amortization expenses of acquired intangibles of EUR13.6 million and stock-based compensation expense of EUR5.1 million. Our third quarter performance was driven by a strong software revenue growth of 17% in constant currencies. Total revenue increased 12% in constant currencies. Services decreased about 11% in constant currencies, reflecting the strong base of comparison with the 2006 third quarter when services revenues increased 72% in constant currencies. Year-to-date software revenue is up 16% in constant currencies, services are up 12% in constant currencies and total revenue is up 15% in constant currencies. So, we are clearly tracking to our full year constant currency revenue growth objective. Operating margin for the quarter was 22.5% and year-to-date, it was 22.7%. Currency had a negative impact of about 50 basis points on our year-to-date operating margin. Regarding the evolution of our operating expenses, I would like to highlight that we do continue to invest in R&D. On the surface R&D expenses decreased by 3% in the third quarter in reported figures but increased in constant currencies. The reported amount, however, reflects a higher level of reserved tax credits in 2007 compared to 2006. I would also point out that in looking at our efforts in R&D, it is probably helpful to look at the combined cost of software and R&D expenses. Looking now at the R&D headcount, it was up 7% this quarter, confirming our continuing investments. Pre-tax earnings increased about 6%, generally tracking revenue growth on a reported basis. Our EPS growth comparison was impacted by the year ago one-time tax restructuring benefits which significantly lowered the 2006 third quarter effective tax rate compared to the 2007 period. The effective tax rate in the 2007 third quarter was 32.7% compared to 28% in the 2006 third quarter. As a result, EPS was EUR0.39 in line with our objectives for the 2007 third quarter but lower than the EUR0.40 in the year-ago period. Currency continues to have a strong impact on earnings, estimated at about 11 points of growth in the third quarter and about 10 points year-to-date. Looking by product line, PLM revenue growth was 10% in constant currencies in the third quarter, driven by solid CATIA and SIMULIA performance. PLM software revenue growth was 16% in constant currencies. ENOVIA's revenue increased 12% in constant currencies in the quarter, taking a breather from the torrid pace of the first half. ENOVIA is on track for achieving a strong fiscal year performance and has been a key contributor to the 15% constant currency year-to-date PLM growth. Looking in U.S. dollar, year-to-date we are growing about 16%. For the quarter, we are growing about 16% for ENOVIA so I believe we are continuing to gain market share in this space. As we indicated last quarter, commencing with the 2007 third quarter Mainstream 3D, now includes both SolidWorks and CosmosWorks. The purpose of the change was to recognize that the majority of CosmosWorks products are now sold into the Mainstream 3D market, and so we are realigning the segments accordingly. We had included in our quarterly presentation the historical effects of this change, which have really no effect on growth rate both sides. SolidWorks on the standalone basis with revenue growth of 20% in constant currencies drove strong Mainstream 3D results. In total, Mainstream 3D revenues increased 19% in constant currencies including now CosmosWorks. Looking at revenue by geographic region, we saw double-digit software revenue growth in constant currencies as applicable in all regions. Asia led the overall results, with total revenues up 27% in constant currencies this quarter, followed by the Americas with 10% growth in constant currencies and Europe with revenues higher by 5%. Year-to-date, Asia and Americas are tracking closely, with Asia up 24% in constant currencies and the Americas up 22%, also in constant currencies. Europe was up 6%. Turning to seats growth and pricing for the third quarter. Total CATIA and SolidWorks seats increased 12% to 19,054 seats compared to 16,975 last year. CATIA new seats increased 4% to 7,704 and SolidWorks new seats increased 19% to 11,350. Looking at pricing, CATIA V5 ASP was EUR11,730 versus EUR12,103 in second quarter, showing some minor reorder, which largely reflects the variations in transactions and channel mix from quarter-to-quarter. SolidWorks ASP was EUR4,619 in the third quarter compared to EUR4,702 in the second quarter. Similarly, SolidWorks ASP reflects geographic mixed variations, with pricing itself relatively stable. Turning now to our business outlook, let me remind you that our financial objectives are presented on a non-GAAP basis. Based upon our financial performance through the first nine months, and with our third quarter I believe, are in line with our expectations, we are reconfirming our 2007 constant currency, non-GAAP revenue objective for growth of about 14% to 15%. We are, however, adjusting our 2007 non-GAAP reported revenue range to about a EUR1.275 billion to EUR1.285 billion, and our non-GAAP earnings per share objective to about EUR1.96 to EUR2 to reflect an update of our U.S. dollar exchange rate assumption to $1.45 per Euro versus $1.35 per Euro previously. We are keeping our exchange rate assumption for the Yen unchanged at JPY1.65 per Euro. With respect to the fourth quarter, our objectives are for a non-GAAP revenue of EUR370 million to EUR380 million, representing an 11% to 14% growth on a constant currency basis. Non-GAAP EPS of our EUR0.76 to EUR0.80 with a non-GAAP operating margin of about 36%. Looking to 2008, our observation is that the current economic environment appears to be somewhat more complex. However, looking at our specific businesses, we continue to see a good dynamic for our software applications. We are introducing our initial constant currency non-GAAP software revenue growth objective of about 12%, and non-GAAP total revenue growth objective of about 10% in constant currencies for the full year 2008. Now, let me turn the call back to Bernard. Bernard?

Thank you, Thibault. To understand our performance this quarter, it may be useful to review it by sales channels, as well as to look at our progress in emerging countries. Beginning with our large accounts channel, we see continued good momentum. Here we work with IBM as a preferred partner, with territory management of large accounts, complemented by the deficit at direct branch sales. We have been seeing three trends since the beginning of the year. First, we are broadening our relationship with current customers. We continue to grow in large accounts in the automotive and aerospace industries, including Airbus, Boeing, Ford, Honda, Scania, Sikorsky, for example. And we are growing the existing accounts through cross-selling of our brands. This was the case in the third quarter, for example, with Hydro-Québec's, a CATIA and ENOVIA customer, which has added SIMULIA. On Yantai Raffles, who is already using CATIA on DELMIA, and is adding ENOVIA MatrixOne. Second, we continue to win in new industries including consumer electronics, apparel, shipbuilding, yachting and motorcycles. In particular, I would like to highlight the win at LG Electronics, a leading electronics company, which has decided to consolidate all product related data inside ENOVIA MatrixOne in order to add one global instance of product data across all business units. Third, looking at emerging countries, we are making good progress in building revenues, and more importantly their currencies to help as catalyst of future growth. We were awarded some large wins in China and India this quarter in automotive and electronics and shipbuilding. Foxconn, a leading Chinese electronics company, has selected CATIA and ENOVIA SmarTeam to improve productivity on collaboration, with OEM vendors. Turning to India, Bharati Shipyard selected CATIA, ENOVIA and DELMIA over all the systems to increase design quality and productivity. We are also starting to see stronger interest of Dassault Systemes solutions in Russia. At the Dassault Systemes PLM user from in the third quarter, we had 15% more participants than the prior year. In our PLM Value Channel, the transition continues to advance well on our original timetable. At this juncture, we are more than half way down in setting up our worldwide business operations for the PLM Value Channel. We are very pleased to demonstrate reliable operation ramp-up, which creates significant potential for both, growth and efficiency improvements. With the new addition this past quarter, DS is directly responsible for 25 countries, with the remaining 10 countries to transition to the DS VAR model by early 2008. We have no countries transitioning this during the fourth quarter, as we prepare for the Q1 2008 switchovers in Japan and Germany, two of our largest markets. From an execution perspective we are seeing some good metrics. For example, the number of qualified leads is increasing. We are starting to identify and recruit additional new VARs successfully and we are pleased by the increasing level of interest on adoption of our PLM Express packages, thus creating noticeable the new dynamic with CATIA. We are seeing solid revenue performance in the PLM Value Channel, confirming our first half trend. We have good traction in the automotive and aerospace supply chains. We are making progress in diversifying into new industries and we are pleased by our success at winning new customer and displacing our competitors. Two companies, I would like to highlight, include Viking, a manufacturer of ultra-premium appliances into consumer goods industry, and Ochiai, a leading Japanese manufacturer of conveyors and assembling machines for the automotive industry. Viking, which was an ENOVIA's SmarTeam customer, decided to replace its existing 3D solution with CATIA to increase design quality and productivity. Ochiai, which has been using CATIA and ENOVIA SmarTeam, was able to achieve an 86% reduction in design-change man-hours. Turing to the SolidWorks channel becoming the professional channel for Dassault Systemes. We are seeing a good dynamic in Mainstream 3D, seat growth was up 19% in the third quarter and strong results in Europe and the America and in most part of Asia outside of Japan. In Japan, we have a new CEO on Board and he is moving ahead with a number of changes. Some interesting SolidWorks win in the third quarter were Union Metal in the U.S., Kulicke & Soffa in the U.S. and Asia-Pacific on Varian, repeat customer adding 200 seats. SolidWorks 2008 was introduced last quarter. This new SolidWorks release has intuitive workflow to allow users to focus on their design and not on the CAT functionalities. It also introduces new un-innovative ways to reuse both 2D and 3D designs. By reusing and leveraging portion of existing designs, significant time saving can be achieved in completing new designs. Further, SolidWorks 2008 provides many new tools to end users improve their design quality. In sum, SolidWorks continues to be on track for 2007. Last quarter, we introduced our newest brand 3DVIA where our strategy is all about revolutionizing the way companies can share the use 3D-based information related to the product development and product lifecycle management. Our vision is to, while companies leverage the product related data, wherever it may reside, on to reuse that data for product documentation, technical training, maintenance, customer services, as well as for marketing and sales as we highlighted in the second quarter with our alliance with Publicis Groupe. 3D is really the new universal language with 3DVIA, we can extend 3D to new users, businesses and consumers to create new communities with 3D as the common language. 3DVIA delivers authoring products that revolutionize 3D product publishing. Importantly, it enables high-performance distribution of content through an open web services-based architecture. Our acquisition of Seemage supports this vision. I would like to warmly welcome the talented team from Seemage. This past quarter, we made good progress in advancing with our 3DVIA strategic roadmap and continue to focus our research and development efforts on developing technologies for next generation online global collaboration. With Microsoft, we recently introduced Microsoft Virtual Earth - 3D Shape. While integrating inside Microsoft Virtual Earth, this online application enables consumers to create with easy realistic 3D models of awesome buildings and then share them with others in online communities. Thibault had discussed 2007 and introduced our 2008 revenues objectives. Next quarter, we'll share with you our 2008 financial objectives in greater detail including discussion on our earnings per share and operating margin outlook. As you have heard on the quarter-to-date, our growth drivers are in place and they are delivering results. These growth drivers have developed from understanding and delivering solutions that on some key needs of our customers. The demand to create more products and more innovative products continue to push companies to review and recreate the product development processes. At the time, they are being pressured to continue to shorten the cycle time of new products or missed revenue opportunity to competitors, quality continues to be increasingly important. And therefore optimizing manufacturing processes is of a critical concern. And finally, cost reduction always remains an important objective and is key in deciding what company will produce, how they will produce it, and what component they will ask their supplier or strategic partners to manufacture. So, in summary, by working closely with all our customers and partners, continuing to pursue our technology road map and expanding our market coverage with all our sales channels, I believe we are well aligned on our road map to 2010. At this point we would be happy to take any questions you may have.

We will now begin the question-and-answer session. (Operator Instructions) Your first question comes from Jay Vleeschhouwer at Merrill Lynch. Please ask your question. Jay Vleeschhouwer - Merrill Lynch: Hi, thanks. Good morning Bernard and good morning Thibault.

Good morning Jay. Jay Vleeschhouwer - Merrill Lynch: I would like to ask a few questions regarding the sales channel and products. First with respect to sales channel, you mentioned Bernard, some indications of good metrics across these channels. Could you be a little bit of specific in terms of describing whether or not the average reseller productivity, in terms of sales run rates, is now in fact materially better at the business partners, and partners such as INCAT and others , than was the case previously under IBM. Secondly, with respect to the IBM relationship, if you could clarify something. They retained responsibilities for a large number of major accounts. Is there however a provision in the contract that some number of those large accounts could be subject to your taking them on in lieu of IBM, if IBM for those accounts doesn't need any specified performance objectives?

Thank you Jay, for the questions. First one, related to the TLM value channel. Yes we do have -- I would like to comment briefly, our metrics for 2007 and 2008, and comeback on your question about sales productivity. We have basically three metrics for this year and next year. The first one which is shared with IBM; is ensure that we don’t have disruption in the transition, and I think the first three quarters show that this has been extremely well managed through this alliance. That was a critical part, but I think it's clear now that this metric not only will have the results, but was the right one to take. The second, we need to continue to keep it until we are over with the full transition. The second metric is related to the improved capacity for the existing recent quarters to invest in the sales capacity moving forward. And as we are preparing 2008, it's becoming obvious that, clearly all the key partners we have working with are convinced that they must invest moving forward to continue to expand our business, and that's a very good sign. The third metric we have is the acquisition of new partners and still to come under umbrella of the PLM value channel. We have been able to sign with several new partners to improve the coverage around the world, especially in South America, specially in emerging growth in China, in India, even in Korea, and that's a critical aspect of the coverage capability because, as you know Jay, we have in the past, suffered from not covering well in our the entire supply chain. So, we are making very good progress there, And when it comes to the sales productivity, my view is very simple, it has not been measured exactly that way. What we measure is the business partner satisfaction and the commitment to invest. And this is a really very visible now. It doesn't not produce results for the quarter. But it's going to really be a very good way to build a sustainable growth. Related to the second question about the alignment of our cooperation with IBM, the most important thing here is that, IBM has a full product portfolio. This was very critical, because in the past, some of the products like DELMIA were sold and the MatrixOne was sold through our complimentary sales force. The fact that there is a clear territory, that IBM has the mission to work out the total solution, helps to really improve the engagement process. Related to the provision, you explicitly refer to, I think this is more a question about how are we going to improve the coverage and optimize our skills on resources with the IBM engagement process. It's clear that IBM wants to be successful with those customers. It's clear that we will provide application knowledge whenever it's necessary. But it also clear that this market is growing and that we are expecting all our partners to continue to invest. And from that standpoint, we will continue to measure the investments of all partners, including IBM under capacity to grow that investment to really create the revenue growth we need add. That's a normal process. There is nothing specific that should be mentioned regarding IBM. It's a normal process with any partners when a company decides to [instrument measure] its channel which frankly speaking was not the case for us before on the PLM space. Jay Vleeschhouwer - Merrill Lynch: Okay. And additional question on the channel, and just finished up on product. What's the status of the plan to use the SolidWorks channel more for other DS products? And then finally, on the product side, could you be a little bit more specific as to the contribution thus far from CATIA PLM Express, that's been available for about a year, is it becoming a meaningful part of the overall CATIA units? And with respect to metrics, before you bought them, their largest selling module of the several that they have was Engineering Central and the reason I mentioned that is that they were very closely tied therefore to CAD data management. And I am wondering if since the acquisition there has been a more diverse mix of their sales, of their modules to suggest that they are penetrating different kinds of applications and verticals?

Regarding the SolidWorks channel, as you may have noticed, it's now going to become the Dassault Systemes professional channel, Jeff had this proposal in mind. Clearly, the SolidWorks channel is demonstrating its capacity to ramp up and sale additional product, keep in mind, what Thibault mentioned about CosmosWorks. One can say, it's an application, so it works, yes, but in some ways it's an extra application. Looking at the PDMWorks, also we're very successful there. When we look at what we want to do with Seemage which basically is going to become a 3DVIA product. It's going to be also sold through the professional channel. So, yes, the answer is more and more of the easy-to-use, easy-to-deploy wide coverage of the -- wide large market coverage type of products will go through the professional channel, which is a way to increase the value in our resellers [high]. Resellers are looking to continue to grow. They want to have increased capabilities and they are doing it well. And clearly, SolidWorks team has been putting in place an outstanding channel management system, which performs well, and which can scale extremely well. So, yes, the answer, we will continue and I have given you examples of when it's going to happen. Seemage 3DVIA composer by the way which is going to be the name of the product is going to be sold through SolidWorks channel. Regarding the CATIA PLM Express where it has been launched successfully, it might represent as high as 40% of the new sales. It's extremely successful in the countries where it has been introduced. It has not been introduced in all countries around the world because the solution ramp-up and the maturity of the management system in all countries were not the same to go from the product centric environment to a collaborative centric environment, but this is moving extremely well we believe and your comment is very, very true. It simplifies the acquisition. It simplifies the deployment and increased the total value. So, we are going to continue to expand that approach. It has been announced for DELMIA, PLM Express and it's probably going to be soon expanded to the SIMULIA, PLM Express environment. Related to the evolution of the profiling of certain customers and modules we sell from the ENOVIA MatrixOne environment, yes, Engineering Central was very focused on that data management. As you know, we have focused the expansion of ENOVIA MatrixOne in new sectors, very successfully. We have several wins in high-tech electronics apparel, several significant wins in the last 12 months. And I think the win rate when we are competing now with some of the older players, in those sectors is 8 win out 10. It's a very successful win rate. So the highest priority for ENOVIA MatrixOne is to PLM is the sectors where I am not because I believe, you know, our existing sector, the further integration with the ENOVIA product portfolio will automatically create the adoption. Jay Vleeschhouwer - Merrill Lynch: Thank you, Bernard.

Thank you, Jay.

Your next question comes from [Chris Glinberg] at UBS. Please ask your question. Chris Glinberg - UBS: Hi, yeah, thank you. Just a quick one to start with, I wondered if you could breakout the ISM contribution in the quarter, and any split between licenses, maintenance and any services?

I think Thibault, this is question for you. I think its marginal, but I'll let to you comment.

Yeah, I think, ISM is too small an acquisition for us to split it every quarter. In the third quarter, I can say that the contribution of ISM to total revenue was in the ballpark of 1%. Chris Glinberg - UBS: Thank you, that's great.

It was essentially in software. Chris Glinberg - UBS: Okay, second question. On the Japanese rate for the Q4, I just wondered what the impact would be if you actually lowered your Q4 rate to the average rates that we saw in Q3 of JPY162. I mean could you give any color around that?

Thibault, you think the question is about the exchange rate, I suspect, about Yen to Euro?

Our guidance is developed at EUR165, as you know. So is your question, the impact between EUR165 and JPY162 for Q3? Chris Glinberg - UBS: No, sorry for Q4. I wonder what the impact would be if you had lowered your guidance to 162?

Well, I would like to believe that it can be lowered to 162, but I'm afraid our assumption remains 165. Nonetheless, EUR0.03 from the Yen contribution is something that could be relatively marginal up about EUR1.2 million. Chris Glinberg - UBS: Okay. really last question, I just wanted to get something clear. Your overall margin guidance for Q4 was 36%. Am I right in thinking that that then implies for the full year, the guided margin is now 26.6%, at the low end range of your guidance of around 27%. Is that a fair assumption?

Well, it's quite normal actually, that would be range for operating margin like there is a range for revenue, and relatively our fixed costs at this point of the year. So, we are still targeting 27% with the range opened between 26.6% and 27%. This is the reason why we are saying about 27%. Chris Glinberg - UBS: Okay. Thank you very much for that.

Thank you, Chris.

Your next question comes from the [Neil Steven at Redburns]. Please ask your question. Neil Steven - Redburns: Good afternoon. Just a quick piece of clarification; can you just give us a -- remind us of the guidance for tax rate on a non-GAAP basis for this year and next year if you could give it to us please?

Thibault?

Yes. Our guidance of tax rate for this year is about 32%. It's somewhere between 32% and 32.5%. Neil Steven - Redburns: Okay. And for next year, if you've give it?

And for next year we have not given it yet. Neil Steven - Redburns: Is there any reasons the prices can be materially greater than?

No, there is no reason for it to increase. Neil Steven - Redburns: Thank you very much.

Thank you.

Your next question comes from [Rajesh Bala] at Credit Suisse. Please ask your question. Rajesh Bala - Credit Suisse: Hi, Rajesh here. Just a quick question on FY'08 operating margins. Given the plantation to your own channel should be complete more or less by '08, there should be a margin pick-up because of flow through revenues. Current estimates of 120 basis points of improvement. Any reason why it should not be more than this?

I think we've initiated, thank you for the question Rajesh. We've initiated and Thibault you can add any comments you want, but we've initiated our guidance early in the process as we do in a year. And I think we're really very cautious and we did because we believe we have a very good visibility for 2008 related to what we think we can achieve in terms of revenue growth. We have not communicated anything on operating margin improvement, and I think it's too early to talk about that right now, but Thibault, you want to add something?

Well, I need to say that we prefer to have completed our 2008 planning to size before we give a date on some operating margin. Concerning the channel transition, there will be a progressive improvement coming from the fact that more and more revenue is going to be driven in this channel, and that we will not have to grow proportionately the marketing and sales structure. Rajesh Bala - Credit Suisse: Thank you. So we should expect some leverage from the model, from '08 onwards? But you are just not ready to quantify that. Am I right on that?

That's right. We are not ready to quantify it at this point, yes. Rajesh Bala - Credit Suisse: Thank you. And just one more question on the services revenue. Services revenue in Q3 declined sequentially by about 15%, any reason specifically for this, is it capacity utilization driven or pricing driven?

Not, understood well the question. Thibault, have you got the question?

Yeah, I think so.

Okay.

I think the question is about a sequential decline in services revenue? And in fact there is a pattern for us of declining services revenues in third quarter which is very much associated to the fact that there are vacations in the U.S. in July and in Europe in July and August which are impacting the level of man days that can be produced in services in third quarter. So, it's a very general pattern which was not addressing last year because we had a very big increase [related to we have this] last year. We have some catch-up of services revenue, but if you look at our normal pattern of services across the different quarters, we are in fact more or less back to a relatively normal pattern for us. Rajesh Bala - Credit Suisse: Thank you. So, there has been no perceptible softening in prices in market?

No. Rajesh Bala - Credit Suisse: Thank you.

Thank you, Raj.

Your next question comes from Marc Rode of MainFirst Bank. Please ask your question. Marc Rode - MainFirst Bank: Yeah, thanks very much. A couple of things, one on your guidance 10% plus and 12% plus for fiscal '08 respectively, can you say to what extent if any there is external acquisition related percentage points coming in? And then secondly, as far as you can say, just on the deferred revenue line say anything we should already factor in anything, that's just from the model as already given. I am looking inside out that would be helpful if you could share it? And then, two final things, one on the availability ENOVIA/MatrixOne the full integration, when do you think this will impact revenues more significantly when it becomes generally available? And then lastly, whether you have any updates at least in terms of expectations vis-à-vis the Toyota, ENOVIA deal next year? Thanks very much.

Thibault, on the guidance first. Thank you Marc for the question. Yes?

Well, on the guidance, we have not factored any new acquisition, you know versus which is already known, which is Seemage, which is again a start-up with couple of million euros revenues base and some sudden impacts coming from [ISAM] which is going to be relatively modest and should not exceed one point? Marc Rode - MainFirst Bank: Okay.

All together.

On the deferred revenue, Thibault, you want to, I don't know, if you..

On the deferred revenue, I think, in 2008, it's going to be very small because it is going to be a Seemage related. So, I think, it's really below any -- but our level. Marc Rode - MainFirst Bank: Okay. That was my expectation. I just wanted to double check whether I missed anything.

All right.

Okay. And Marc related to the ENOVIA portfolio, two things, first of all, we have already customers taking advantage of the MatrixOne capabilities to expand the current ENOVIA VPM environment and this has been very, very positive for us this year. Year-to-date, we are 40% above in growth for ENOVIA, so we are really increasing our footprint. Your question is more specific related to the full integration of the product portfolio. It's well known now and visible to some customers that it's going to be available in 2008. And as you can imagine some of the customers, which our last customers, they have multi-year plans. And some of them are already planning of product introductions we have asked. But I cannot say more at this point in time a side of the fact that when we beat the roadmap with customer such as the name you mentioned, it's a multi-year roadmap and it creates a very, very interesting dynamic for us moving forward to provide global collaborative environment. So, enough said for the time being, good progress and more to be seen next year. Marc Rode - MainFirst Bank: Okay. That's understood. If I may, just slightly rephrase the ENOVIA question. I appreciate the time-specific mismatch well understood, but let me say that way, would it be over interpreting things if they still respectable but lower growth rate is may be a reflection of people waiting to some extent for the fully integrated version, too much interpreted into quarterly numbers?

Well, it would be far too much interpretation I think the current dynamic is a very good one. The third quarter is always special. We have always special situations, but there is nothing along these lines. The PLM Express configurations create a dynamic way where basically our offering for PLM is really much more integrated now and when we go through the sales cycle, we don't , less and less we sell card, and then later to [IBM] our collaborative environment customer, the trend in the market today is to buy the integrated solution. I only see an acceleration of that trend moving forward, and it's more a question of building up the roadmap than anything else. Marc Rode - MainFirst Bank: All right. Thanks very much.

Thank you very much, Marc.

(Operator Instructions) Your next question comes from [Lawrence McLeo at Pictet]. Please ask your question. Lawrence McLeo - Pictet: Yes. Thank you to all for your views at the asset management. I saw under one of the slide you reiterated, you get on for 2010, utility, I want to make sure the -- obviously, on the current exchange rate, I have to readjust to the 2000 basis, basically as of today's exchange rate or the one you are using in the fourth quarter, that's question number one. And number two, am I going to assume that ultimately most of this additional wealth which you expect. Are you roughly speaking $600 million is coming from the new license and what it means for maintenance and therefore, if could you quantify what you think the distribution would bring, i.e. integrations of the IBM onto your own sales force? Please, thank you.

Thibault, the first part on the exchange rate. Thank you Lawrence. I think overall, when we had issued it that time, we have not taken those parameters into account, and it would be difficult to predict what they will be by 2009 or 2010. It seems to me that [independent] of exchange rate, we are on a business operation trend to make this happen, taking a five years plan as opposed to one quarter exchange rate. Lawrence McLeo - Pictet: No, fair enough, so basically you base your assumptions on 150 to the Euro Dollar and 146 to the Yen, that's what I want to know. The starting point was the basis for the business plan; I just want to assume that's correct?

You're right. We consider that it would be constant currency. Lawrence McLeo - Pictet: Okay.

And that currency would in fact take care of itself because of the five year timeframe, but momentary it was a constant currency objective. Lawrence McLeo - Pictet: Okay. And on the -- obviously, my understanding, but please readjust, my understanding is you think it needs to be readjusting was on the bulk of the goals was coming from new licenses, vastly because of the success of your new product as you described on many occasions, but also because of the reintegration on the IBM, i.e. entering into a smaller or medium size company, which you didn't do as successfully as you -- am I correct in assuming this, because ultimately in the third it's true that you had new licenses, as such, I know it's bulkier, its not the regular number or it can be bulky, that was not particularly great?

Well, one comment before you make it, keep in mind that the Dassault Systemes long-term focus is to create a revenue stream, which is a recurring revenue stream, I guess you mentioned that. And keep in mind the recurring revenue stream for us is not coming only from previous sales, it's coming from the fact that we do license, we do lease software and the case of SIMULIA, for example, has been very successful, where I think above 80% of the SIMULIA license fees is recurring revenue. Lawrence McLeo - Pictet: I see. So, it doesn't go for new license, it goes straight into your recurring, is that you mean?

But indeed it's new license. It should be counted as new license. So, why are we doing that to make it sure, we are doing it because moving forward we need to be ready for subscription model because I think we are going to do more and more of online applications. It will be a subscription model and I think with the current revenue structure, we are extremely well positioned to do that. Thibault, any further comments for that?

No, I think that's the comment you make. Other than that, we certainly don't expect to grow services faster than software. So, it's very true that the bulk of the growth to double, to do the double, plan has to come from software, and has to be distributed across recurring, which includes new license sales as well and new license platforms revenue. Lawrence McLeo - Pictet: Okay, thank you.

Thank you, Lawrence.

(Operator Instructions) There are no further questions at this time.

Okay. Thank you very much all of you for keeping the dialogue with us and we appreciate your support and we will talk to you soon at least for the next quarter. Thank you very much and have a good day.

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