Bernard Charlès - President & CEO Thibault de Tersant - CFO Francois-Jose Bordonado - IR

Gerardus Vos - Citigroup Fred Grieb - Credit Suisse Richard Nguyen - Société Générale Michael Beucher - Cheuvreux Patrick Standaert - Morgan Stanley Knut Woller - UniCredit

I would like to welcome you to Dassault System Q4 and full year 2009 presentation which is also being webcasted. At the end of the formal presentation we will take questions from the audience and from participants on the webcasted call. Later today we will also hold the conference call. For those participating in the webcast, the presentation will include some video which you will not be able to see, but you will of course hear Bernard comment. Dassault System financial results are prepared in accordance with IFRS. In addition, we have provided supplemental non-IFRS financial information. For an understanding of the differences between the two, please see the reconciliation tables included in our earnings press release. Some of the comments we will make during today's webcasted presentation will contain forward-looking statements which could differ materially from actual results. Please refer to our risk factors in our fourth quarter press release in our 2008 document de reference. Finally, we will be holding our analyst event during the week of June 14 in the evening and 15 all day at our headquarter office outside Paris. We hope to see you there. Let me now introduce Bernard Charlès, President and Chief Executive Officer. Bernard Charlès: Thank you very much, Good morning everyone and I am very pleased to of course share this presentation with Thibault to talk to you about what we learned from 2009 and the lending and some perspective about 2010. I think I will say that before I give you some facts on data that 2009 is probably a very critical milestone for the system to prepare the future and we will tell you why. The second comment I would say is that we've been of course very focused on operational efficiency, but I would say we've been able to protect employment. In fact we've increased our R&D by almost 4% in 2009 and most of our competitors were significantly reducing dock capacity, and I believe that it was the right thing to do, while indeed we were able to reduce our cost structure significantly. We overall achieved that and Thibault will give you much more data because in our business, it's also about people and it's about knowledge and we increased our product portfolio quality, performance and scope. That's the tone. Now let's go to more detail. If you look at the 2009 achievement as compared to the objectives, I believe that we've delivered the objective from the operating margin that we stated, but we've been able to do that, thanks to the saving plan, more detail to come, while we were reducing the cost grouping structure around the world and optimizing the operation efficiency. As I said we have increased the R&D by 4%. All-in-all, the headcount will be at the end of 2009 similar to what was the headcount at the end of 2008, but there was a slight rebalancing. We have expanded the boundaries of PLM. We’ve got some six portfolios and I think I'll illustrate that also. I need to say that 20% of our revenue is now coming from the non-traditional Dassault System industries and it’s becoming visible, and I think it's becoming an important factor especially because when we attack and approach a new sector, the transactions are smaller at the beginning, it takes time to build a reference in a new industry and after we have what we call and hopefully the snowball effect to expand the installations around the globe. 250 new V6 customers which we are very pleased with that So I think V6 is now extremely stable, high quality and we have a scope which is bigger than the entire V5 portfolio. And of course what we have announced in terms of acquisition of the IBM PLM organization, we are well on track to integrate the 700 colleagues which probably will have an effect of increasing our large account resources to approximately 1000 people. So I believe with those factors, we are well positioned to take advantage of any slightly positive trends in the economy, but we have not made really too positive assumption on that, but we believe we can come back to growth. So first highlights on strategic achievement. The full-year revenue was at €1.253 million, down 6% on the full year, excluding exchange rate down 9%, operating margin at 25% improved in Q4 at 32.6%. The operating margin growth improved by 2.9 points on the Q4 and was slightly down by 0.6 point. The EPS at (inaudible) in the full year and as you noticed the EPS growth was positive at 3.3% for the Q4, basically what we have seen is kind of bottomed at Q3, a positive sign specially on the new license revenue with Q4. If we look at this in the overall software landscape, with the big players in this software industry, I think overall we have been able to mitigate or minimize the downside of the economical effect, of course still a negative evolution of the total revenue as well as EPS but as compared to many of the other players I think it is not too bad. From the new license standpoint, the new license revenue, on the full year it’s down 31% excluding exchange rate and as you could notice it was down 12% excluding exchange rate for the Q4. So there was a clear impact in 2009. Obviously, we have seen however Q4, an increase in deal size. Number one, sequentially from Q3 to Q4 significant improvement in the new license revenue at 66% up, which with larger transactions, which we feel is a kind of good sign for what we can prepare for 2010. On the recurring revenue as demonstrated to be extremely resilient which we believe also is an important factor forward in terms of effect plus 5% excluding exchange rate for the full-year, and minus 1% on the Q4 excluding exchange rate as you can see on the chart. If you look at from the product domain standpoint, the PLM Q4 was down 4%, CATIA down 7%, ENOVIA down 4%, mainstream down 9% for a total of 7% and on a full-year basis, you know that the numbers on the previous quarter end up to be the overall revenue down 9%. Improvement in performance of ENOVIA on Q4, and very interesting dynamic in terms of the justification will also come back on this. Now let's look at the brand approach by brand. I recall that we have six brands. Four of them are number one worldwide. One is number two on the service new babies, yes we will talk about it. CATIA, first of all, we've strengthened our number one position in the world with CATIA for virtual design. Many people still think CATIA is CAD, it’s much more than CAD, it's about virtual experience. What you see here is new ways to really design, engineer on simulative product. This is medical equipment as you can see. We create a virtual universe where the equipment is put in the context of its use in, this case for surgery, and you can see that the dialog to really design this equipment and simulate this equipment is done in such a way that the operator will be able to define what kind of user interface they want to have and how the product should operate in the context of the real life, not in the context of the product itself. It's a real paradigm in the way products are created. In short I will say we are moving from product life cycle attachment PLM to product in life where we want to simulate the aspect of the product in its context of its usage. And it has a lot of implication about how the software is evolving and that’s very critical for the future of CATIA System, you have seen here an illustration in this video of CATIA System, if you go on YouTube you can find some of those videos which shows that we can simulate the behavior of onboard software inside a physical equipment and this market is an expanding market. As you know quality of product, availability of product is not dependent on the geometry itself. It also dependant on the exact behavior of the product which integrate not only material simulation, but also onboard software electronics and systems. And this is going to be more and more important moving forward. You can also notice that the specialized application software will represent 40% of the new license revenue, specialized application like composite, electrical systems and many other new applications portfolio within the CATIA brand. And V6 is really changing the gameplan from that standpoint what we call the integration between system, mechanical and shapes. There is much more to say, but I will mention here only system engineering and collaborative tools. So the dynamic on the perspective is really excellent for the CATIA environment especially in terms of scope on broad usage. On the ENOVIA side, the Q4 was showing very good strong sign, we saw double digit new license revenue growth for 2010, so we really are counting on the diversification. It’s a unified PLM platform, it contains the capacity to be online and which provide of course lower cost of ownership. It’s easy to configure its caliber. We are probably the world's largest installation of PLM system with GE, with about 120,000 users. The business drivers are really new industries, business process in core industries and of course Software as a Service on being ready for online on the cloud. On the SIMULIA side it was double digit growth in 2009. We are moving from number three to number two in terms of software revenue. So the investment we did four years ago was worthwhile to do. It’s highly profitable relative to the overall business. It’s growing double digit and I think there is more and more need for stimulation not only about design, but about simulation that we want to take advantage of in new industries as well as in existing industries. You see here an illustration for Bayer MaterialScience, really for basic consumer products. On the DELMIA side, strong resilience in recurring revenue in 2009 and I think we have more to do, we are really now looking at new industries, industrial equipment, energy, maintenance, leveraging the V6 platform. In V5, DELMIA was connected, not fully integrated for complexity reasons in terms of the product on process model complexity. We have simplified that in V6 and we've simplified the offer to make it affordable for small medium size market. The return on investment are significant. This market is really an untapped markets so we need to continue to simplify and make it affordable for more industries. On the SolidWorks, we've reached last year if you look on the full-year basis. The one million user mark which I believe is a significant footprint and we believe we're number one in the CAD and 3D CAD market. We've the enhanced the leadership versus the competition. Last week, we had the SolidWorks user meeting of about 5000 people attended the user meeting and I think it's really, truly a vibrant community. It’s not really the relationship with companies, it’s relationship with the user community, some way similar to the other world and that's very different from the PLM world from that standpoint, and we see users who are promoting the product, they are helping each other, many users not companies. Even people who were unemployed, we've created stimulus last year, where we've provided free licenses. Also those people in America which have been extremely successful and then the people when they got the new job, they were our best marketers to promote it, so work inside the company they've been joining, so we do this kind of creative program. This channel is very strong, and I think we're not at the end of the journey with this entry system. If you look at the volume, of course it was down from almost 50,000 licenses to 36000 last year on a full year basis. But you see that the slowdown was less in Q4. We sold over most 10,000 license in Q4. If you look at the real numbers in terms of footprint, I think we are selling four times more licensees than the other players in the industry in terms of unit. The ASP was also quite stable flat on the full-year basis, plus 2% excluding actions late in the fourth quarter which shows that there is a recognition of the value of the product at something which was for Q4 at $4900. Improved condition in North America and Asia excluding Japan, I've mentioned about the volume as compared to the competitive landscape and consistent ASP that’s what I want to say. 3DVIA, we are doing not only pilot anymore but excellent showcases in many, many domains. We focused on three domains. Shopper experience, you see the demonstration here. This is a tough one. This is really because we’ve discovered that around the world, the distribution sector, retail and distribution is facing significant challenges in terms of optimizing consumer experience when it comes to the retail and on selling points. There is issues on branding identity, consumer experience, so 3DVIA shopper is a very critical part of the future of how to use 3D to do sales and marketing. The second aspect is 3DVIA mobile. I hope you all have 3DVIA mobile on your iPhone, if you do have an iPhone. If you don’t, don’t please go on the upper store, in 3DVIA you see it’s augmented reality and it’s very useful, it’s fun too. It’s not expensive, it’s less than $2, so €1.49. So don’t hesitate to install it because it’s very useful and there is a lot of buzz about it. And of course it is the beginning of a familiar product on mobility. At the SolidWorks world, we saw people doing design, storing the design on 3DVIA.com and being able to share it immediately on the mobile phone. It was really truly a discovery for them. I met with many, many small companies at SolidWorks World where they said, well now I know I can store my product there. I have a basically a cloud environment for free and I can use it and show the product I do or use my sales force being able to show the product catalogue so there is a lot of potential in terms of how companies are going to use mobility. And last but not least Composer which is part of 3DVIA which was doing well last year which is really about providing ways to create 3D based documents for maintenance service instead of having flat documents. So those are the three directions and there will be new things coming this year in the 3DVIA portfolio, not only shopping mobility and composer but really to create what you have seen in the previous demonstration, video of CATIA, create virtual world so easily that you can insert easily the new product you are creating. So there is an interesting dynamic there and a potential is also there and we are leveraging our channel on install base to really create online software on content what we call crowd sourcing. Relative to the industry verticals as you notice, of course automobile, industrial equipment and aerospace are still big part of our market. But now we've reached a point where we give justification represents 20% of the total revenue and I think we're going to expand and continue to exploit that opportunity. And for example, in the new industries like apparel, I think we've done significant progress last year and as you all know when we win those accounts, I think a registration for I guess here, you too see because it’s different from their premium cost. So I think the message is clear, its said that to visit those customers by the way, they are doing very good margin that is known for being one of the best most efficient company from that standpoint so it means we know what it means to our global online collaboration for such kind of market, I am pleased to say that we have announced a major win to biggest apparel company in world called VF and I will talk about that in a moment. Even in industries where there is a lot of many challenges like the automotive industry and we know [whether I'm single] as I said today, we have [targeted] dynamic the reason is there is a lot of electrical cost, new energy, new systems, product portfolio are being most on transform and this is what we do with them. So I think that despite the fact that of course in the many of those industries, the volume is lower than what they would like the confirmation of the industry is there for the long-term. In the context of the Renault-Nissan environment its about adopting V6 putting it as the global collaborative environment for compliance [fee quota] management simulation system engineering which is becoming so critical in those sectors where you have on global economics with systems refer the physical products. Aerospace same thing, so we believe that we can really take advantage of the V6 platform to really beat up growth, we're going to be back to growth in 2010 on the full work. You've seen some of those videos already about global collaboration. This can be done online now, you don't need to toss for the data from one site to another. People can have access from a global basis to a centralized server. Why this is important because I believe we're ready for cloud computing service. On the collaborative platform, we see the justification for ENOVIA. ENOVIA V6 is going to attract adoption many, many Matrix customers have migrated to ENOVIA V6 in a very easy way and we believe that having this backbone in place opens the way to expand on the portfolio. You see a reference in automotive and aerospace and ship, high-tech, energy, construction, consumer goods, CPG, life Science on the aid and services we've even compliance with TUV which was announced already. This morning we've announced that DF, they own brands, (inaudible) Lee, Wrangler, many of the biggest company in the apparel sector. And they have selected ENOVIA V6 for all their global collaboration on the work for all those brands. Of course, there is not much revenue in 2009. Revenue forward because its about putting this installation in older brands there on the global basis for developments, collaboration, sourcing, costing analysis, on similar to what you've seen in the guest video. AB industry, new energy with Samsung as a industry, selection of ENOVIA V6 on to take advantage of the online environment on some product result because it was only for product result repository for all product development it's a very different approach than adopting CAD just to do the design drawings in 3D. It's really about the online full definition of the product. GE with GE Energy selected V6 post CATIA, ENOVIA and SIMULIA so we are expanding GE we've a global framework or contract to really expand in each of the divisions. NXP semiconductor selecting also ENOVIA it’s confirm our opposition we're the world leader in semiconductor today with our ENOVIA V6. We've talked a lot about P&G but this moment we announced that we have expanded the footprint. Last year we talked about ENOVIA being used for material selection so what it means is that any product developer or any product marketing at P&G when they want to acquire some materials for new products they have to go through some of our database for ENOVIA V6 material management compliancy. So we ought to do compliancy, we save, other than save $100 million every year just on material saving on compliancy. Now we are expanding to what we call packaging and labeling on our artwork which is basically all these box on packaging that you see here on the picture. And its really the adoption of CATIA so why use is it, the CATIA is used to make square box, because it's integrated. We are using so it works that decided to move to a fully integrated environment. Integration on scale was a parameter, even if the products are significantly simpler than an applicant. So it shows that they are very interesting phenomenon we see right now whether it's about styling whether its about packaging, labeling, compliancy we even do for P&G what we call eye tracking for customers. So you would have in certain household in America, earthquake with black bar that we are talking in the screen and we will be able to do a kind of WebEx session but instead of being WebEx's it will be shorter experience presenting this year on competitor's product including our product and then we will be able to track the consumer eye on the screen to see exactly where they are looking for us. which level are they looking for us on the [equity] about customers study and they find money in the marketing aspect all this is part of a very integrated approach end-to-end from consumer to production systems and there will be more to come. If you look at now how we are reaching the market there are three channels which have been really well established and strengthened last year and direct PLM channel it represent 55% of the Dassault System revenue, the indirect PLM value having 24% on the professional channel 21%. Of course with the scope of it we have got the acquisition of IBM PLM we are strengthening the direct sales force to other simplify the interaction with customers because we are filling some products, IBM were filling those, we are simplifying the contract and we are well on track to make these integration happen every first good second, if you don’t feel scared about it first which I am not. So the position is on track to be integrated, the grip alliance is progressing a very well those who work on cloud computing, work on hardware, work on (inaudible) consulting service and including financing. We've signed an agreement with IBM for our financing which we're the only third-party company to have signed an agreement right in for financing which we think those they are very useful for many customers. We have very positive feedback. I don't think I've heard any negative remark from the customers. They all are expecting this to happen as quickly as possible. So I think 2009 summary, is a milestone for Dassault System. You can put they were saying and saying yes, it was a very strong economical slowdown, but the bottom line is we've not missed the opportunity to reshape the company in terms of efficiency, reach we would not have been able to sign the transaction to acquire the IBM P alignment I would say in shiny days because probably new addition would have been far to high as compared to what would we would have been able to offer. So on that there was one day last year when I was happy with the exchange rate, this was October 24 of last year when we announced the PLM acquisition. So I think we've optimize, simplify the company, simplify the integration on expanding the portfolio, strengthen the R&D at a time where our many competitors are doing the opposite and created a track record for V6, (inaudible). So with that I'll lead the call to Thibault for additional comments on the financial highlights before we take on with your questions.

So lets move to the 2D part of the presentation. We have done already represented had a 31% decrease in new license revenue in 2009. this was reduced to 12% decrease in the fourth quarter after this sequential increase in new license revenue of 66% that we experienced in the fourth quarter but the good part was really the recurring revenue with 5% increase relatively a flat recurring revenue in fourth quarter we are in fact coming back to a more normal situation with our (inaudible) renewal rates which are normalizing in this fourth quarter. So I think the resilience of this recurring revenue is a very good sign of our how we are headed on our product (inaudible) for our guesstimate. They are representing 73% of our software revenue for 2009 and for the full year and for the total Dassault Systemes revenue recurring is 64% of the total. From a June standpoint, we have an 11% decrease in America if we look at the full year 2009 this decrease was lower to 3% in Q4 showing that most of the improvement in Q4 has happened in America not only U.S. but also Latin America that’s a smaller base of course but Canada U.S. and Brazil have been strong contributor in Q4. In Europe there is no real change. The 9% seems a little bit worse than minus 6 for the full year but this is coming from the dynamic of the recurring revenue growing less but the new license revenue is relatively stable in Europe Actually when you look at Europe for the full year 2009 we have flat revenues in France and Germany combined so the decrease is coming from the rest of Europe. And in Asia, is Asia we have decrease of 14% for the full year I think the situation is well known institution in Japan has been prompting this decrease, we noticed some improvement in Q4 as you can see or hear but coming mainly at this point from the countries like Korea or China. Also this business has been impacted by the decrease in new license revenue, there is some lack time of course but then our receives are in fact mainly done in order to deploy licenses of our customer side. So we are in Q4 at 24% decrease in revenue in services, 19% for the full year and so that is a consequence of the new licenses sale but the only good thing I can highlight for services is that after a difficult first quarter we have been able to standardize the gross margin of this activity between 10% and 11%. Thanks to the cost savings initiative we have been able to maintain an operating margin in line with our objective at 25% for the full year and in Q4 and that’s the second sequential quarter we were able to improve operating margin to a 32.6% which is a three point improvement, 290 basic points as I should say. An EPS was up 3% in Q4 and a decrease of 8% for the full-year. So the cost saving program was really about compared to 2008. It was to decrease expenses by 8% in Q4 excluding currency effect we decreased them by 11%, so a good performance knowing that the setting was stable and even increased in R&D as Bernard had pointed out. I think that in what we did in terms of savings, a good portion of the savings are going to be produced in 2010 because a good portion of them, we're done through a collocation of people, deployment of share services, and addition of course in IT and facilities because of it. So a lot has been done at infrastructure level and of course we were so been a little bit cheaper at enabling people to travel and particularly travel in business class. So our travel cost have decreased quite a lot. We've been monitoring also the use of sub contractors and consultants and have been able to shrink it quite a lot. So we've been working on many aspects. The aspects that we nearly produced are the fact that we host services in 2009 and that of course there is a link between commissions and sales activity. So if we compare with the savings challenge that we imposed on ourselves in two waves if you remember. First wave was in January of last year, $35 million and then a second wave of $80 million to $90 million announced with the first quarter. We did $145 million because these two waves were measured compared to what our expense would have become in 2009. We told them to not compare to 2008, but to our budget for 2009 in reality. So compared to this $120 million savings target we did EUR145 million and maintained the staffing. This is ENOVIA chart, I apologize for that. We need to improve it, but in fact to the ones who are sensitive to the music of figure, it’s a nice chart for a finance person and because what it shows is that our cash flow from operations was $298 million in 2009 compared to $309 million in 2008. So it's just $11 million below 2008 level and I think that’s a good indicator of health if I may. Turning to 2010 now. First of all, we are not crazy about 2010 and we don’t want to have too much optimism for what we believe is going to be a slow recovery than I would say quite (inaudible). In addition to that, we believe the integration of the IBM PLM organization is almost done. It’s still a lot of work and how this will impact in terms of focus in the first quarter here and there. So we took a conservative approach to first quarter and a few weeks following the integration, but inspite of that and without adding them into our figures, what we have seen is for the full year, a double-digit growth in new license revenue and when we include the acquisition, with the assumption that we will close it early April, hopefully end of March not to close it first of April and what we see is a revenue growth of 15% to 17% and a margin improvement of 1 point and 100 basis points and EPS rose 12% to 18% So you have the chart in your package and you can see here for first quarter, $280 million to $300 million in revenues and $1.410 to $1.414 billion in revenues for the full year, what you see below this frame is for your information the figures of the IBM share of the revenue made with the (inaudible) that we have been buying from them in the second, third and fourth quarters of 2009. So these are the figures you can add to our results in 2009 if you want to test again what is our growth without the positive impact of the acquisition on 2010. I'm not going to highlight in the future, what is our core growth, because this IBM organization is going to be so merged with our own operations that frankly, I don't know how to do that type of segregation. So I think the best way is to offer you what is this IBM share of the revenue in 2009 such that you can always state and compare, but I don't want to try to subtract IBM from our 2010 results because I don't think this will have a lot of meaning in 2010. So with this I think Bernard and I'll answer your questions.

Bernard, can you elaborate a little bit on state of the pipeline and what you saw in Q4, particularly the Americas was quite strong. Is that something that you feel that at a level that you can extrapolate on? And secondly, Thibault I know last year when you made the cost savings, you didn't let go of any sales headcount, so do you foresee or in your margins trends, just an reacceleration in discretionary expense or are you building any plans for hiring again this year? Bernard Charlès: Under this pipeline visibility, we've seen an improvement in Q4, and we see a much better visibility for 2010. It’s not only coming from the small sign of the economical environment, but I think we have learnt a lot through the difficulties about how to better manage and build our pipeline. In easy time you have an easy process, in tough time you learn and I think all along the last year I have noticed that we have learned a lot through these difficulties, but I will say that we have created a new process to have much higher quality on the targets. I know competitors are listening to this. So I will not make some more comments, but clearly it’s not only from the pure signs of economical improvement as we have significantly transformed our process to increase the way we manage the pipelines. So I feel very positive for this year. I think it's consistent with what Thibault said about what we expect to do. On the second aspect of the saving plan, Thibault?

In 2010, we have some staffing increases in our plan. We have sales operations people and G&A people and lawyers to support the integration of the IBM-PLM which is coming without the G&A infrastructure and so we will need more transaction lawyers and sales admin people and prices in order to integrate it and we also have planned for further increase in R&D staffing in 2010, but in terms of quota-carrying sales people, we have kept completely the capacity, so clearly there is lot of room for them to go back to normal transaction level in 2010 before we increase again the staffing.

SolidWorks’ pricing , we had in Q3 a product mix effect and what’s the improvement in ASPs in Q4, was it a normalization of that effect and could you maybe talk a little bit about the outlook for pricing in the current year?

SolidWorks was really a stable pricing across 2009 in reality excluding the currency impact and when looking at the different brands that we have namely CATIA, SIMULIA, DELMIA, we have seen also a pretty stable pricing across Europe in 2009. So in 2010, I don’t expect that which trend is going to change.

And then on the service revenues, when do you think service revenues bottoming? Bernard Charlès: Well, the service revenue will continue to struggle in first and second quarters of 2010 and what we are expecting is that more dynamic licenses sales that we're accounting on starting in the second quarter of 2010 really. We will bring benefits for little bit Q3 and more importantly Q4, 2010.

I have a question on what's happening in Japan in the automotive industry. I would like to know, could you give a comment on what's happening at Toyota and Honda, is it a risk for Dassault Systemes or is it maybe an opportunity given the fact that maybe the subcontractors are not equipped by software from Dassault Systemes, so what is your comment on this? Bernard Charlès: First of all, those customers are very large customers to us and they are using a lot of our solutions. I don't want to comment about what we're doing with them related to the specific problem for the cars, but what I can say is they are not design related. I think that's one point. The second point is it's more opportunity than risk. I think the feeling that it might be a problem with the design is absolutely out of the scope of any thought process in any of those companies. In fact it's the opposite. Why? For a simple reason, most agree now that the reason why we are building almost the industry standard in auto and (inaudible) and many other is because we can help companies to define accurately, the definition, the geometry of the products which was a major issue, before you had so many engineering 0:01:26.2run and also defined accurate manufacturing process. Now there are lot of things which are not yet and still are not simulated, a lot in fact the simulation is a marginal aspect in materials. There are certain material simulation which are very well understood. Steel, aluminum but there are so many materials which are not at all understood in terms of physical laws. So you have noticed that we have a double digit growth in SIMULIA for last year, I think this will continue to expand. The other aspect is simulation has to be integrated in PLM when it’s a side to take the risk to not being able to simulate what you think the product is and you might be simulating the wrong usage conditions. So it’s only opportunity, not to mention the fact that many of those products are not only in car, but in planes and everything are becoming smart products. There is a lot of electronics, there is a lot of software and up to now those disciplines have been non-integrated, most of the development systems are under work, we are the only company today to be able to integrate on both systems, on both software with the physical product, the only company. It’s called CATIA system in version 6. In fact it’s used today to develop unmanned vehicle which flies without pilot, well you better have to understand what you do. You don’t want those vehicle to drop on the head of someone and so this is where we are going with CATIA. We have been explaining that three years ago and there is a lot of traction there and I think it will only accelerate. We will take now some question from the webcasted call. Operator?

(Operator Instructions). We have one question from (inaudible) of Deutsche Bank

Can I ask you guys to provide a little bit more color on the embedded assumptions in your guidance for 2010? You seem to suggest that weaker recurring revenue when you comment about that flow through impact from lower new licenses in 2009 on maintenance growth, but clearly you specified that you expect double digit constant currency new license revenue growth, ex-IBM is it fair to assume that IBM PLM licenses are actually expected to be disrupted and how much is that contribution? How do you see kind of the recurring revenue growth versus the services revenue growth in 2010?

First of all, that’s right, what we expect is to start the first half of 2010, I am speaking before the IBM acquisition, the first step to start, in the first half of 2010 we have, we've relatively flat recurring revenues because of the dynamic of new licensees and renewals in 2009 and then go back to the growth in recurring in the second half of 2010. So for the full year, we're expecting some growth in recurring revenue, but it's going to be relatively modest before the IBM acquisition, and this will be combined with 10% new license growth and before the IBM acquisition, to fully answer your question, growing revenue between 3% and 5%. On top of which we have the IBM contribution, which will lead to the revenue growth I mentioned during the presentation between 15% and 17%. But all of this is in constant currencies and maybe I should also highlight the fact that in the Euro figures that I gave, the currency assumptions what we took is that the Euro will be at (inaudible) and I'm not saying it's going to be the case because it's going to be a year where it's going to be very difficult to predict what would be the currency rate, but that's the computation assumption we've done in the guidance.

And if I just may add a very quick question on R&D expenses. They were quite lower in Q4 versus last year, but you actually increased the R&D headcount, can you kind of comment a little bit in more detail, how was that and where do you think the run rate is going to be going forward? I think you've mentioned before something about maybe recruiting a little bit more but if you could clarify that. Bernard Charlès: Okay. Well it is true that the expense for R&D was down in Q4 and there are some reasons for that. The largest is really the work we have been doing on our infrastructure through co-location moving some R&D labs in order to co-locate them and because of that, all the savings we have been able to do in IT in hardware and networking infrastructure for R&D. The second reason is that the majority of the increase in staffing has been done in India, in our labs in India at relatively a cheaper cost. And the last reason is the fact that because of this, capacity increase we have been doing also in France, we have been able to improve the R&D tax credit we are getting in France, which had an impact on the level of expenses in Q4.

We have a further question from the telephone from (inaudible). Please go ahead.

First of all, just looking at the competitive environment I think in the past some of the US competitors for ENOVIA have made a lot of noise about contract wins and maybe that’s not been entirely backed up by figures. In the recent quarter they said it was backed up by figures. So can you talk a little bit about how you see the competitive environments around ENOVIA and how you see that changing with V6 and then maybe just couple of quick follow-ups on the leverage of 2010, given you’ve got the capacity on the sell side to do more licenses than you are guiding to, what sort of leverage will that give you, given there obviously would be some more sales commissions and so how much of that would flow through to the bottom line and just as an add on to your comment about FX Thibault, does the IBM acquisition change the mix of the cost base in terms of FX exposure, I am obviously thinking particularly about the yen exposure and how that might move given how you have guided quite conservatively on the end side as well? Bernard Charlès: The first question related to the competitive landscape. There is a lot to say about it, but if I concentrate a little bit on the collaborative platform namely ENOVIA, I believe that the market trends are very interesting here, first of all what we initiated in 2008, 2007 and 2008 is working with the diversification and we are learning a lot from that in terms of new practices that will serve back the traditional industry and that’s very positive and it’s considered as very positive by the customers. For example, portfolio management, process for cost management which are different from traditional processes in the heavy industries, material sourcing. So there are lot of effects, so that’s a very good, I believe powerful trend. ENOVIA is becoming not one product, but it's becoming a portfolio where we are we call industry applications, we call them accelerators, but I'm afraid it can generate some confusion because it might be perceived as just customization. It's not at all. What you've seen this morning in the video, the parallel processes are as much as they will be aerospace processes or automotive or energy processes, and that's a very key differentiator that we're leveraging for the diversification. So I think we're increasing, changing the gameplan, that's why we won VF. For example, we're changing the gameplan to go from an IT tool to business process application, set of application, that's the ENOVIA portfolio and I think from that standpoint we're increasing the gap as compared to the competitors. There are still companies who want to buy the toolkit or the PDM functions. In this area, it's probably more of a price war but when it comes to the business process and application, I think we make the difference. So last but not least, with V6 there is something which is happening, which is the collaborative platform is a prerequisite. There is no file anymore. You all used to have files in your PCs, for our system there is no file in V6, you cannot find Windows files, so it means that it's extremely powerful in terms of new ways to transform the collaborative process. On customer the feedback we have some small, mid-size and large companies are excellent, that’s why I mentioned some of the showcase with V6. No one in our industry is doing that, no one. Why, for a simple reason they do not have the integration between the (inaudible) and on process volume, so I believe the gap with V6 is increasing and I believe we will leverage that significantly going forward, is it going to be a balance sheet in 2010 from the total market, no but it’s clearly what we are leveraging to support the growth we have just talked about. So that’s under competitive landscape. So we are very, very pleased to have done this unification and I think we have things that cannot be provided by anyone else. On the integration with system, that I mentioned shouldn’t be underestimated, all products on this planet are becoming smart products for energy, optimization or for integration, even if fridge becoming a smart product. So this evolution to integrate shape, mechanical onboard software, and fridge does not try, but there is an onboard piece of software to communicate. All those things need to be simulated and this is unique to us, if you look at what is available otherwise, you ask to do your own collection of PCs of software and try to connect them together. That’s the V6 gameplan.

There was one question trying to make me confess that there is more operating leverage than in the guidance and in fact the operating leverage or the target of 26% operating margin is exactly obtained at the midpoint of our guidance in terms of revenue and that’s the way it is done and so if we do more revenue than that and we don’t invest like crazy, there is a little bit more operating leverage and for sure in 2011 there is also more operating leverage based on the fact that we have a sale capacity, coverage capacity which can handle more sales transactions. The second aspect is the modification introduced in our currency waiting by the IBM transaction and the modification is that our net exposure to the yen is going to increase with the transaction, probably at couple of points in net exposure. Having said that, we are hedging and we will continue to hedge our yen net exposure because we believe that current level is quite appropriate. So it’s not the gross figure, of course, but we will hedge, but net exposure we will continue to hedge. So for the time being there is no need to wake up and be concerned before a couple years on that front and for the, it’s the opposite the percentage of the (inaudible) in and our expenses will grow little bit more than the proportion of (inaudible) in our revenues because of the transaction. So we will be over hedged in (inaudible) in some sense by probably two of the low points when the transaction completes.

: Gerardus Vos - Citigroup: First of all just coming back on the tax credit, you said it was a $7 million kind of sequential drop-in in R&D in the OpEx, how much of that related to tax credit and how much should we kind of pencil in for 2010 in incremental tax credit? Then similar on the OpEx the run rate, during Q4 was around $180 million, how do you see that kind of developing in 2010 and then finally just coming back on the competition, BTC reported 43% license growth in their equivalent quarter to your Q4 quarter. That has been accelerating over a couple of quarters there, could you just be specific on that kind of point? What do you think is happening there? Is it just because they’ve won a couple of large deals with their windshield product at the high ends or do you think there is something more structurally happening with this company?

So on the R&D question, there was an improvement of our tax credit in Q4 compared to what we got in Q4 of 2008 between $2 million and $3 million. So the rest of the improvement probably closer to $3 million than $2 million by the way. So the rest of the improvement that you have noticed is coming from our infrastructure work. Gerardus Vos - Citigroup: Yes for 2010, is there any more kind of incremental tax credit coming in 2010 versus '09.

No I think we probably should be relatively stable overall in tax credit in 2010. If there is an improvement, it's going to be relatively small. Bernard Charlès: On the competitive landscape I think you are the specialist of the analysis of the BTC number and I am not, I know is on the competitive landscape we are gaining market share with all our brands including ENOVIA and because you should not look at only the revenue you have to look at the way the licensing model is done. We are very sensitive at Dassault Systèmes to really keep a very strict split or separation between each of the brands when it comes to the management of the business. So that’s I think maybe you could find some new things there related to the numbers presented from their side, but as I said again I'm not a specialist of that. On the diversification, on when we are there, of course many of their account we present this morning, they might have been there to try to win, but we are the one and I think I see for this year a positive trend, there will be cases where they might claim to have a victory, but still to be seen, so I think our solution is very competitive and if we engage well with customers, we will be in a good position from the landscape’s end point. Gerardus Vos - Citigroup: How many new V6 customers did you sign during the quarter? I think you mentioned 256 earlier one for during this year and I think you said something like 150 during the last quarter, so is it fair to assume 100 during the quarter? Bernard Charlès: 100

We will take our next question from Fred Grieb of Credit Suisse. Fred Grieb - Credit Suisse: Could you just give us a little bit more color around renewal rates just basically I am wondering where we are in terms of annualizing out the 2009 headcount reductions associated with leases and then as we see the blended renewal rate of maintances and leases spike up here in Q1 and then secondly just what are you seeing do in terms of 2010 spending intentions from the industrial equipment vertical?

The PLM blended renewal rate for 2009 was I guess very close to 92% and as you know it started at a lower level in the first half and covered in the second half. And the SolidWorks renewal rate is of course lower than that and started to recover as well in Q4, but has been essentially impacted by 10 points compared to historical levels for the first three quarters of the 2009. So for next year, I think what is relatively a phase is to assume that the level we averaged in Q4 of this year is going to repeat across 2010, that is the base assumption we've taken in the guidance. Bernard Charlès: Related to the industrial equipment on the visibility, in terms of spending for 2010, I don't know for this sector itself, but I believe that on the visibility on our pipeline is quite good. For simple reasons, I think the V6 is bringing such significant value and helping to improve so much the business that I believe we will take advantage of that opportunity. And as I said, even in the industries like auto (inaudible), there is a lot of new programs coming with new sophisticated materials on technology and this is what we do. So we have to be there to help those customers and we will leverage that possibility to create the dynamic and last, but not least I think the simplification of the customer engagement we've, the PLM team joining Dassault Systèmes is a significant new trade for the company. I believe it's a major milestone in the last 20 years or so and because we're finally going to be able to engage having consistent engagement process for all the brands, at least all the PLM brands and even we announced last week that for SolidWorks, when it comes to online data sharing and collaboration, ENOVIA subscription model will be provided to SolidWorks users starting toward the end of this year which I believe is something that no one in the competition can do. Fred Grieb - Credit Suisse: (inaudible). I have one question on tax rate. It seems that in Q4, your tax rate was pretty low, could you explain this phenomenon and do we have to expect that can be in 2010 some positive and on tax rate related to the acquisition of IBM-PLM. Bernard Charlès: Q4 was good, as you point out in terms of tax rate. Because of some consolidation, we have done in our corporate infrastructure mainly. By the way we had a one-time tax profit in Q4 which was $8.2 million, but in our non-IFRS financial data we have subtracted this one-time tax benefit such that we keep the spirit of non-IFRS as being something that excludes extraordinary event. So when you look at the tax rate in non-IFRS you are much closer to something that is not so far from being sustainable. Looking at the full year 2009 we should not be very far from that level in 2010 and the guidance we have increased the tax rate by I think three quarters of a point, but no more than that. Fred Grieb - Credit Suisse: And more precisely what’s nonrecurring guidance in Q4? Bernard Charlès: It probably will take 10 minutes to completely explain it, but you may have seen that we have done spin off of one activity and the fact that we have done this spin off has freed actually, the tax asset. Fred Grieb - Credit Suisse: (inaudible). I have 3 points, the first is on the IBM-PLM revenues, can we have a little bit more color split by product or the structure of the PLM in terms of cost in order to just moderate for 2010? The second question is regarding the clients that have ended some maintenance contracts early last year. Do you see some of them coming back and taking on some contract again or have you not seen anything yet? And I have a follow-up after.

The P&L of the IBM activity is fairly simple because it's made of build and presales personnel and level one. So essentially of the 700 people, 500 are sales and presales and 200 are in management level one, and product announcement and pricing database [those 10] points to address two categories from the P&L standpoint with average cost of person pretty close to Dassault Systems one. Bernard Charlès: On the maintenance, I think we mentioned last year that most of fleet that was coming from the consolidation certain customers' location or unfortunately certain cases companies in bankruptcy. For the kind of software we are having it cannot last because customer they want to upgrade on as you remember when we do the maintenance contract, it's more than maintenance, its maintenance and all the upgrades. So I think it has been a rather stable of a whole I don’t see this has by no mean as a trend and I think its inner zone which is small enough to be difficult to really provide your interpretation about what is really going on. Even for V4 customers, customer will have to pay much more if they are not under maintenance to go up to V5 or directly to V6. So all in all it can be temporary situation but from the PLM offer I see that pretty stable on the SolidWorks and that’s when rate doesn’t be bad last year in terms of maintenance either. And we continue to promote it because they are certain set of services that customer can get and they value that. So when you think about the long-term with subscription it provides a rather stable model forward and I don’t see any specific transform by side that people maybe want on a number side to more to say on that. Fred Grieb - Credit Suisse: I just have a last one, on 3DVIA. On the revenue side, does it start to be significant or is it still very, very tiny? And what kind of revenue could you expect from these products, let's say five years out? Bernard Charlès: I don’t know what is very, very tiny all numbers are good numbers. I think we can make it a very noticeable business line-up we have a lot of try today. They are as we chuck rate obviously. If you look at 3DVIA composer I will say this is more traditional product as you add on SolidWorks or you add on to a SolidWorks install base or CATIA installed base and by the way it has been working very well. To expand a footprint for technical documentation and so on, it's really becoming a very, very good solution. One of the competitor you mentioned was supposed to do some great things there, but we are, I think we are eating the plate in there. So this will continue to grow on the new models which are really expense we have done in marketing and sales doing new type of marketing like what we did with [Nestle], its the famous (inaudible) big story and the 4 million boxes keeps place with the game, we are not making much money with that yet but there is an opportunity to I think to create a new business model there I believe and we do more of that this year. On the shopper side is going to become very critical because there is a lot of they said ground management, I think retail optimization is an untapped area. Long-term too early to say I think we will have a good test point this year on this really truly expansion in new domain and I also believe that some point in time, showroom I mean 3D TVs are coming and I think 2011 there will be more affordable than this year but the way its coming I mean its unstoppable, 3D device are coming and so the content is going to be very critical and that’s why we are really accelerating our development in this area but too early to give you visibility on the business side. Richard Nguyen - Société Générale: Good morning. Richard Nguyen from Société Générale. I have a very quick question, in fact, regarding your revenue by product line. We see that last year, CATIA and ENOVIA, the core of ENOVIA suffered a lot. And however, other PLM, like SIMULIA, etc., did very, very great. Could you please give us some color about the geographic impact, by geography, of this decline and what you see in the future, just to have a feel about how your supply chain will react in the future and what you see? It is kind of inflection point in 2010. What kind of growth we could expect for each geography by product line, if you can, of course? Thank you so much. Bernard Charlès: This question is for Thibault.

I knew it. Bernard Charlès: I don't need to answer either.

It's not particularly impelled to answer the question of course. As you very well know itself, but to give you little bit more color, it is true that we had growth with SIMULIA and DELMIA in this Q4 and with SIMULIA for the full-year 2009. The SIMULIA growth is coming from old geographies and there are no big discrepancies actually from the deal to another for SIMULIA. In general, Americas and Europe have been performing better than Asia for the rest of our brands but if you look forward I think that the situation in Asia will continue to recover. So if I have to make bets for 2011 today, I would place bet on much better growth in Asia and Americas and for continued slow improvement and recovery in Europe. And I think that would probably work in the same manner for all brands. Bernard Charlès: As you said the bet. Michael Beucher - Cheuvreux: Michael Beucher from Cheuvreux. Just going back on the IBM PLM operation it was announced in October you are looking to get accretive in the EBITDA margins for the group. Could you just give us a flavor in your '010 guidance what is coming from IBM and what is coming from the work done last year to maintain cost. Second question do you keep in mind a 30% margin for the longer term? Bernard Charlès: I start with the last piece, yes, we keep in mind the 30%. We think a lot about it by the way so yes it's in our memory I think we will improve this year I mean 2010 but not at this flavor on the lot of depression in the IBM contribution. So again the one point of incremental margin is as the midpoint of our revenue guidance. The mid point of our revenue guidance before the IBM acquisition as I said before it has been below 4% growth so there is little operating margin attrition at this level of revenue growth because salary increases and in commissions based on our double digit new license course will begin and for the bulk of the margin attrition at the midpoint of the revenue guidance is coming from the IBM transaction. But things returns of course as revenue progresses. We will take now question from the webcasted call. Operator?

We will take our next question from Patrick Standaert of Morgan Stanley, please go ahead. Patrick Standaert - Morgan Stanley: I just want to go back on that margin attrition and margin improvement coming from IBM and the fact that the core businesses now, can you help me understand why it should grow in license double digit, why its not flowing more into your margin and what's going on in the business, I understand you need to rehire, pay more the bonuses but it seems like a double digit license growth should come with some operation leverage into your business and the second one we haven’t tackle a lot of Europe, Europe is on the weak. I know you explained it was more optical than real. But when should you expect Europe to follow the trajectory of US, do you think its more hand story or its more 2011 story? Thank you.

Well, of course the new license revenue growth is very critical and its going to be very important indicator for us going forward. Having said that the recurring revenue will pick time before it grows because of their life time of course. Before increasing the installed bases into produced results, so for that reason in 2010, the double digit new license revenue growth will only bring 2% to 3% incremental revenues, 3%. So with some salary raises and little bit more sales commissions linked to that new license revenue, this is not enough to drive a lot of margin expansion. So already the margin story is still linked to the recurring revenue and of course also the evolution of the services revenue which will not be very favorable in 2010. Whole things which will dramatically change at the end of 2010 and 2011. Francois-Jose Bordonado: Next question from the conference call, please?

We will take the next question from Knut Woller of UniCredit. Knut Woller - UniCredit: Basically, a quick one. Your guidance basically implies, if I do the math correct, roughly 150 million contribution from the IBM PLM business. Can you give me an idea about the underlying assumption of the growth rate which you applied for this business? How does that compare to your own standalone guidance of 3% to 5%, excluding IBM PLM growth? That's the first part. The second part of the question, unearned revenues are down year-over-year. Is it only currency or another reason here? And then, as a third brief one, the operating cash flow yield, do you expect that to be pretty stable in 2010, compared to 2009? Thanks.

Okay. So the dynamic inside the IBM portion of the revenue is not very different from the one of the rest. It’s a slightly below which is simply a reflection that there is less diversification by industry verticals in this IBM share but the dynamic is not very different in the reality in our forecast. And I'm afraid I missed the second part of your question. Knut Woller - UniCredit: Its regarding the deferred revenues if I look correctly your balance sheet deferred unearned revenues are down year-over-year and I just wanted to understand whether that might be due only to currency movement or are there any other reasons here for the decline year-over-year for unearned revenues.

Well the deferred revenue is going up again if you look at the second half of 2009. The fact is that when you have a shrinkage of maintenance renewal this has an impact on deferred revenue which is very mechanical if you take for example the SolidWorks side of the business and things we are now rebuilding a better territory called in maintenance renewals in fact if you look particularly at the Q4 of this year you will see that there is a nice increase in deferred revenue so its completely and the currency also has an impact to of course one has to look at it excluding currency effect. Francois-Jose Bordonado: Last question from the room. Knut Woller - UniCredit: Two questions, first one on V6, the development idea says you can expect next year giving a little time as you had in 2009. The average is to attract to installation clients are signing for? And one on the question on BRICs you gave some indication on those countries used to (inaudible) can you give us a quick comment and that says it has growth with potential of those countries. Bernard Charlès: I think on the V6 we don’t do this feat, first of all because there are many many scenarios for example in V5 customer we thought to install the backbone and in V6 we get the V5 and then step-by-step we update the application so there are so many scenarios that I think the split will not be meaningful. I can mention a few things however. Most of our justification initiatives are on V6 almost all of them. Second there are many initiatives on the indirect channel, which are V6 only for small and mid size companies to not be dependent on the only supply chain are of course the last factor for V6 are large companies going to the next generation environment of development so there is a mix, there is a lot of diversity there. V5 is still extending very competitive so we don't really care which one we push, but I think for simplicity on the channel V6 is providing new kind of capabilities. So what is the second question. Knut Woller - UniCredit: To the bases on the BRICs spend.

The BRICs don't fall under unified group anymore. We are enjoying, and we will continue to enjoy very nice growth in Brazil and China, and I think also going forward in India, Russia has been really a struggle in 2009. And I'm not sure I know exactly what will, how it is going to evolve. You know lot of that is functional or big potential, but 2010 is sort of unsure for Russia. Okay I think we conclude. Francois-Jose Bordonado: Yes thank you very much to all of you and we look forward to seeing you for our first quarter result on 29 of April and on the 15 of June to our Analyst Day in (inaudible). Thank you very much.