Michele Katz, U.S. Investor Relations Executive Bernard Charles, President and Chief Executive Officer Thibault de Tersant, Executive Vice President and Chief Financial Officer

Michael Briest, UBS Jay Vleeschhouwer, Merrill Lynch Matthew Hammond, Credit Suisse First Boston Clara Van Der Elst, Standard & Poors Equities Keval Patel, Citigroup Neil Steer, Redburn Partners James Dawson, Morgan Stanley John Segrich, JP Morgan

Thank you for standing by and welcome to the Dassault Systemes Q4 FY 2005 Results Conference Call. At this time all participants are in a listen-only mode. There will be a presentation followed by question-and-answer session, at which time if you wish to ask a question, you would need to press "*" "1" on your telephone. I would like to advise you that this conference is being recorded today, Thursday, February 9th, 2006. I would now like to hand the conference over to your first speaker, Ms. Michele Katz. Please go ahead, Ms. Katz. Michele Katz, U.S. Investor Relations Executive: Thank you for joining us for a review and discussion of our financial performance and business progress for the fourth quarter and year ended December 31, 2005. On the conference call are Bernard Charles, President and Chief Executive Officer, and Thibault de Tersant, Executive Vice President and CFO. We completed the acquisition of ABAQUS in early October and have consolidated the company into our results pursuant to U.S. GAAP purchase accounting treatment. In addition to presenting our results under U.S. GAAP, we believe it is helpful to provide you with additional financial information. We will discuss U.S. GAAP as well as non-GAAP financial figures in this call. In particular, non-GAAP financial figures include revenue, operating income, operating margin and EPS before deferred revenue write-downs and excluding acquisition costs. You will find worksheets reconciling these differences with our U.S. GAAP figures in our earnings press release. Our financial report on our website also provides information explaining the impact of currency. I'd like to remind everyone that some of the comments we will make on the 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 factors that could cause actual results to differ materially can be found in item three of our Form 20-F and in today's earnings press release. For your information, you can find our fourth quarter business and financial webcast presentation, which was given earlier today in Paris, on our website. And finally, please note that growth comparisons are year over year unless otherwise stated. I'd now like to turn the call over to Bernard Charles. Bernard Charles, President and Chief Executive Officer: Thank you, Michele. Dassault Systemes reported record revenues and earnings in 2005. Strong growth in software, service and core margin improvement drove our fourth quarter and full year financial performances. For 2005, our total revenues were $1.2b, representing 19% growth. We extended our leadership in the Product Lifecycle Management market in 2005, gaining 1 percentage point in 2005 to 23%. In the aggregate, we have gained 8 points of market share over the last four years. And we extended our footprint in the design world, with over 72,000 new CATIA and SolidWorks licenses, demonstrating the continuous need for 3D technology across all industries. At the heart of our success is the powerful combination of significant PLM implementations, the competitive advantages of our brands, the strong performance of our distribution channels and the investments we are making to enhance our future performance and long-term opportunities. We continue to focus on enlarging our addressable markets through technological innovation and complementary acquisitions. We made good headway in 2005. We significantly expanded our presence in the simulation market with the acquisition of ABAQUS. And we have made -- and we made further progress pursuing our 3D For All strategy, with the acquisition of Virtools early this year and our continued developments with our 3D XML technology. Moving to 2006, our outlook is for a year of strong revenue and earnings growth. At this point, I would like to turn the call over to Thibault for a detailed discussion of our financial performance and then I will return to discuss our businesses. Thibault de Tersant, Executive Vice President and Chief Financial Officer: Thank you, Bernard. Before going into a review of the year, let me begin with a brief explanation of our GAAP and non-GAAP figures. The only adjustments between GAAP and non-GAAP figures are the exclusion of deferred revenue and exclusion of acquisition costs. Non-GAAP revenue as a result is simply total revenue excluded deferred write-downs of approximately Euro 9 million for both the fourth quarter and the 2005 year. Profitability measures, such as operating margin and EPS, are also presented before the deferred revenue write-downs and acquisition costs of about Euro 9 million in the fourth quarter and Euro 10 million for the full year. In the fourth quarter revenue increased 31% and 27% in constant currencies. Reported total revenue of Euro 313.3m, which was above our revenue objective range of Euro 300 to Euro 305m. EPS was equally strong, increasing 29% to Euro 0.67 and coming in above our objective of Euro 0.64 to Euro 0.66. For the full year, revenues increased 18% and 19% in constant currencies. We reported total revenue of Euro 943.6m, with a contribution of Euro 22 million from ABAQUS before deferred revenue write-downs. Looking at our revenue growth before including ABAQUS shows very good results also, with revenues up 16% in constant currencies. Full year earnings, reflecting the overachievement in revenue, came in above our objectives. We reported EPS growth of 17% to Euro 1.59, compared to our objective of Euro 1.56 to Euro 1.58. Our operating margin came in on target at 28.6% for the full year. In comparison to 2004, we have been able to maintain a relatively stable operating margin. We think this is a pretty good achievement in light of our new initiatives. How have we done it? Our operating margin performance reflects the positive underlying trends and improvements in our businesses, which have absorbed in excess of 1 point of dilution from our recent acquisitions as well as currency impacts. Revenue growth in 2005 reflected balanced growth across software and services. Software, accounting for approximately 84% of our total revenue, grew 18% in 2005. Services increased at a similar level, rising 20% for the year. PLM or Process-centric revenue, excluding PDM, was up 17%. CATIA, our largest brand, had a good year. DELMIA, focused on digital manufacturing, had strong revenue growth. PDM revenue increased 20% on a record performance by ENOVIA, our software applications for collaborative lifecycle management. ABAQUS, which is included in our PLM revenues, had a good quarter. SolidWorks performed well throughout 2005, with strong demand around the world. For the full year, SolidWorks revenues increased 25% in U.S. dollars. Our unit growth in 2005 was very good. In total, CATIA and SolidWorks licenses increased 15%. In spite of the competitive environment, we continue to sell on the value of our software solutions bring to customers. As a result, pricing was stable for the full year. Now I'd like to go through the details, starting with revenue growth by region. Revenues in the Americas increased 15% in constant currencies in the fourth quarter, as we expected to see some slowing down from the strong pace of the first nine months. I would like to highlight that DELMIA had a strong quarter in the Americas on activity in aerospace. For the full year, the Americas grew 24% in constant currencies. Asia had very good results with revenue increasing 27% in constant currencies in the fourth quarter. Contributing to the growth in the quarter was strong activity for our CATIA and PDM software applications. For the full year, Asia grew by 13% in constant currencies. From a regional perspective, Europe was the story in the fourth quarter, with revenues up 35%. Europe had a truly phenomenal quarter on strong PLM and 3D design performance. Software and services results were both up sharply in the period. PDM had a record quarter in Europe, followed by DELMIA and SolidWorks, which also had very strong quarterly activity. We benefited from strength in service and other revenue, with good performance in services generally, our CMP activity and the added contribution from contracts originally expected to be completed in the third quarter. For the year, revenues are up 19% in Europe. We were pleased with seat growth and pricing trends for the quarter and the year. Total units increased 14% to 22,484 in the fourth quarter and for the year total new seats licensed increased by 15% to 72,078 seats. CATIA licenses increased 6% in the fourth quarter to 11,416 seats. For the year, CATIA licenses increased 6% to 34,798. CATIA Version 5 end-user revenue per seat was up 3% in constant currencies for the fourth quarter and for the year. SolidWorks new seats licensed in the fourth quarter increased 24% to 11,068. For the full year, SolidWorks had an increase of 25% in new seats licensed to 37,280. SolidWorks average end-user revenue per seat decreased 2% in the fourth quarter, but for the full year increased by 1%. Moving to operating expenses, higher expenses in the fourth quarter generally continued to track closely with headcount growth. Total operating expenses increased 28%, with 11 percentage points from the addition of ABAQUS and 4 percentage points reflecting currency impacts. Netting these two factors brings us to an operating expense increase of 13%, tracking our headcount growth of 15% before including ABAQUS. Looking by function, a large part of the increase in marketing and sales is for our CMP organization. In R&D our efforts are concentrated in PLM, 3D XML and Automation. We have adopted FAS 123(R), share-based payments, as of January 1, 2006. We have estimated full year expenses from share-based compensation granted by December 31, 2005, of Euro 9.2 million. This amount does not include new grants that could occur in 2006. In any event, we would expect that share-based compensation expenses would be significantly less than 10% of net income. Now, let's look at our views on 2006. We are reconfirming our 2006 financial objectives for revenue, operating margin and EPS, which are given excluding deferred revenue write-downs, acquisition costs and share-based compensation expenses. Our objective is to grow total revenues of about 17 to 18% on a constant currency basis. This growth objective assumes approximately 7 points of growth from ABAQUS. This leads to a total revenue range of about Euro 1.105 billion to Euro 1.115 billion before an estimated deferred revenue write-down of Euro 8 to Euro 9 million. Our goal is to maintain a stable operating margin in 2006 in comparison to 2005. Our objective is to grow EPS at about 13 to 14% to Euro 1.79 to Euro 1.81. Looking to the first quarter, our objective is to grow revenue 22 to 25% in constant currencies to about Euro 248 to Euro 253 million, and EPS about Euro 0.31 to Euro 0.32, representing 15 to 19% growth. Our financial objectives for the first quarter and full year 2006 continue to be based upon a U.S. dollar to euro exchange rate of $1.25 per euro. I would now like to turn the call back to Bernard. Bernard Charles, President and Chief Executive Officer: Thank you, Thibault. Let's begin with a review of our PLM activities. We are truly at the beginning of the PLM opportunity, with significant growth in front of us. V5 PLM is in production at many companies, using in various combinations of our CATIA, ENOVIA, SMARTEAM, DELMIA and SIMULIA software application families. We are seeing strong adoption in the aerospace and automotive industries. And we are seeing increasing penetration in target industries including shipbuilding, power, plant, petroleum, with our new contract announcement this morning, as well as in electronics. Our V5 PLM solutions are delivering compelling, measurable benefits for our customers across important categories, with significant value in improving design, engineering and manufacturing, as well as lifecycle support. Our customers have quantified these benefits and are sharing them with us. The magnitude of improvements is startling to them and truly gratifying to us. Customers are seeing 40 to 90% reductions in development time. They are seeing a reduction of engineering changes ranging from 30 to 80%. In manufacturing, NC and tooling costs, as well as process optimization, are being reduced by 35 to 60%, to cite just a few examples. PLM is truly about bringing value to a company at the top and bottom line. With the significant savings achieved, our customers are able to innovate more and design more products in a shorter timeframe. In some cases, increasing new product development by 70%. In summary, these results illustrate the compelling benefits of our PLM strategy and our V5 PLM software solutions. Our objective in PLM, however, is to ensure that we offer the best individual solutions for our customers. They can then decide which combination of our software applications is most appropriate to fit their requirements and objectives. Our goal is not to say “If you like the benefits of PLM overall, then take all our Brands.” Our objective is to bring significant value with each individual brand and its clearly defined mission. First, we have CATIA, our largest brand, for design excellence. SIMULIA, our newest brand, incorporating ABAQUS, provides engineering excellence through virtual testing. DELMIA includes our software applications for production performance. And in the PDM, we have ENOVIA to provide a global collaborative environment and SMARTEAM for Team PDM or project collaboration. With our five PLM brands, we aim at providing the highest possible value to our customers in each of their domains. And when all our brands’ products are associated together, thanks to the V5 common architecture, we deliver to our customers an even higher value. This is what we call PLM excellence. Now, let's move to a review of our PLM software applications. I'd like to start with CATIA V5, which had a very good 2005. Looking at a few numbers, seat growth was good, increasing 6% for the full year. In numbers, that is 34,798 seats. CATIA V5 is now in production at over 95 of our top 100 customers. In some cases, this represents large installations that are moving to V5, and for others it represents the first important steps. CATIA V5 is delivering superior productivity gains. It is offering breakthrough technologies, such as Imagine & Shape, Knowledgeware and Functional modeling. It is winning against the competition in targeted industries, including Nokia, Siemens ICM and BT Industries. And CATIA V5 continues to expand with automotive and aerospace OEMs and their supply chains. We expect that all German automotive manufacturers will standardize on CATIA V5 release 16 in the summer of 2006. Our PDM solutions, with ENOVIA and SMARTEAM, delivered 20% revenue growth in 2005. Our PDM customer base increased significantly, with 40,000 new seats sold and 1,100 new customers in 2005. Our solutions have demonstrated key competitive advantages, which enable them to offer superior solutions for OEM supply chain collaboration. ENOVIA offers a configured design in context over the complete lifecycle and one single desktop for designers working in the context of a global distributed company. SMARTEAM provides both CATIA integration and flexible enterprise integration. And we have a Supply Chain Engineering Exchange to help OEMs on their supply chains collaborate better. Overall, our PDM business continues to make good progress, growing its footprint, revenue base and market position, year in and year out. Interestingly, some believe our PDM growth is off of a small base, which is not the case. In 2005, PDM end-user software revenue grew 25% to $227 million, and total end-user spending increased 21% to $570 million. Looking to the future, we have a sizeable opportunity to grow our PDM business, first by increasing our penetration rate within our current customer base and second, by expanding with new customers. In addition, our PDM software solutions are important levers in driving overall PLM growth. DELMIA made significant progress in 2005, delivering strong revenue growth. DELMIA broadened its customer base, adding 52 new customers. It continues to increase its strong presence in the automotive industry where DELMIA is working closely with Daimler-Chrysler, GM, Nissan and Toyota. DELMIA was recently awarded a new contract with Tata Motors, one of India’s leading car manufacturers. It is also expanding its presence in the aerospace industry, with its work with Airbus and most recently Aermacchi in Italy. In defense, DELMIA is working with Lockheed Martin and DELMIA has been selected as part of the SSP 300 global project. Looking at the market in which DELMIA operates, digital manufacturing is expected to grow to $1 billion by 2009, according to Daratech. In summary, DELMIA is very well-positioned as it moves into 2006 with a strong pipeline of opportunities. And its unique solution, integrating product design and manufacturing, should position DELMIA favorably over the coming years. Turning to simulation, ABAQUS had a very good start as part of DS, posting strong results for the fourth quarter of 2005. ABAQUS performed well in all regions with existing and new customers. The company operates with a direct sales force, working in a consultative capacity with clients. As a result, the opportunity for growth within existing customers is truly quite large. Looking ahead, we see good growth opportunities in the simulation marketplace in general, and in the combination we see even more possibilities. ABAQUS offers a unique nonlinear finite element analysis technology. As part of our broader SIMULIA brand, we are developing an integrated open scientific platform for realistic simulation. In 2006 we will be investing in growing the SIMULIA field organization, which includes sales, customer support and consulting services. We see a substantial opportunity in the simulation market, where industry estimates size of the market at close to $4 billion by 2009. SolidWorks continues to lead the 2D to 3D migration. One, on the basis of revenue results for 2005, it is in the number one position in the mainstream 3D design market. Selling on the strengths of its offerings, pricing has remained stable in 2005, notwithstanding a very competitive environment and a good deal of noise from our competitors in the market. Demand has been remarkably balanced by geographic regions with strong results across Europe, Asia and the Americas in 2005. Looking more closely at the key figures, new customers represented about 65% of total revenues, and more than two-thirds of our new business comes from our competitor's base. SolidWorks has more than 213,500 installed commercial seats, with its total community of users approaching 0.5 million at year-end and probably over that as we speak. SolidWorks’ popularity reflects its ease of use 3D CAD software for designing better products in less time. Several important factors distinguish it. First, SolidWorks is production ready and production tested. Second, its strong usage in production truly speaks to the product robustness, as well as the strength of its distribution channel. Third, SolidWorks delivers significant productivity gains and it offers integrated analysis with CosmosXpress. What also distinguishes SolidWorks is its customers, providing very good references and helping to expand the SolidWorks community of users around the World. Most recently, SolidWorks held its annual international user and exposition conference, where this event set a record for participation with over 3,500 attendees. In summary, the mainstream 3D design market continues to offer significant long-term growth potential for Dassault Systemes, based upon the strength of our SolidWorks’ offerings and the estimated 4 million 2D users. During 2005, we continued to invest in our sales channels, as we have done over the prior two years. During this past year we made major investments to enhance and increase the direct support that we provide to our sales partners. Currently, we have over 2,600 people at Dassault Systemes in our services, sales and marketing teams. These resources have increased by 34% in 2005, of which a large part is related to the ABAQUS. So, clearly a large effort underway. In PLM, DS has taken on the role of channel management provider, or so-called CMP, on behalf of IBM. This model has been designed to provide IBM business partners with a similar type and level of support that we have always been providing to IBM's direct sales force. To give you an update on the specifics, we are now managing about 80 IBM business partners in eight countries. In total, this covers approximately 75% of the combined DS/IBM SMD business in Europe and in the Americas. We have had a successful transition to this model during the second half of 2005. Deployments are on track in all countries where the change is underway. And importantly, business partners welcome this improvement in support to help them address PLM opportunities. IBM PLM has become a part of the IBM software group, moving from the industrial sector group. We believe this is a beneficial move as the software group is naturally positioned to leverage IBM's presence across a broad range of industries. In this morning's announcement, IBM confirmed the strategic nature of our partnership and its willingness to invest further in our PLM solutions to deliver end-to-end enterprise-wide business transformation. And I was delighted to see the comment from Mike Bauman, Head of the IBM software group, reporting about this commitment. We are also increasing channel capacity in several areas. SolidWorks continued to increase its channel capacity in 2005, just as it did in 2004. Moreover, SolidWorks continues to provide strong support to its network of VARS in the areas of education, training and other key domains. We are also strengthening our VAR network in China, focused on PLM opportunities. Looking ahead, 2006 will be a year of continuous transformation for Dassault Systemes. Focusing on new product introductions to expand the power of V5 collaborative environment with PLM. Enlarging our addressable markets with our 3D For All initiatives. Paving the way to change and adopt our channel to create a new distribution model for small and medium-size enterprises, as well as providing full service solutions for large customers in all geographies across all sectors with our long-lasting partnership with IBM. To conclude, what drives us each day at DS is our belief in the power, enormous potential and pervasive applicability of 3D technology to enhance communication and the environment at large, and to accelerate adoption of PLM across all industries and all sectors. With this at the heart of our vision, we are pleased with the significant accomplishments of 2005 and we are confident in our outlook for 2006 and beyond. At this point, Thibault and I would be happy to take your questions. Questions-and-Answer Sesssion:

At this time, Ladies and Gentlemen, if you would like to ask a question, please press "*" "1" on your telephone and wait for your name to be announced. If you would like to withdraw that question, please press "*" "2". Again to ask a question, please press "*" "1". The first question comes from Michael Briest at UBS. Please go ahead. Q - Michael Briest: Good afternoon. It's Michael Briest, even. But a couple of questions. Firstly, the CATIA unit growth in 2005, around 6%. Would you expect that to accelerate in 2006, now that you've got more of the reseller channel under direct control? And a similar sort of question, SolidWorks had another very strong quarter. Should we be expecting any deceleration in that business in 2006 or do you think there's still plenty of scope for growth? A - Thibault de Tersant: Yes, Michael. Certainly SolidWorks had a very, very good year in 2005. And SolidWorks is really a model where the capacity increase in the channel is truly driving the unit growth, so we are not expecting to repeat a 25% increase in units in 2006, as we state in our guidance, but to be rather between 15 and 20% increase. And on the CATIA side, we are not expecting to repeat the 6% increase neither in 2006, but rather to be slightly less as an increase in new licenses for a variety of factors, including certainly the good performance in 2005. Q - Michael Briest: And another one, if I may? How much of the channel is now directly under your control, if you like? You gave 75% but what proportion of revenues do you think is actually now being led by IB -- Dassault related sales force rather than IBM? A - Thibault de Tersant: In our 2005 revenue, the IBM licenses represent 50% and revenue coming from IBM is going to represent about 60% of our total 2005 revenue. Inside this IBM revenue, we certainly are also contributing quite a lot, both where we are CMP, channel management provider. And we are with CMP covering today about 60% of the SMB revenues and the IBM channels, and we are also of course helping quite a lot the sales to large comps. Q - Michael Briest: And can you say if there's any plans to extend the channel management program? Is this as far as it's going to go or are there other territories that may be added in 2006? A - Bernard Charles: Yes. Those we have taken up to now, in the last 18 months, is a very pragmatic approach. It's, we look at across countries, the situation, to evaluate how we can improve the business performance and really the cost structure to reach the market. And we have been making the decisions together with IBM based on those parameters. And the situation varies from country to country, depending about how the model was set up. For example, in Japan the IBM PLM team is very, very much oriented for the entire market to involve business partners, not only for SMB but for also large customers. And this is a compelling model, because it provides local support with a lot of knowledge. In other countries we have different situations. So we expect to continue to evolve towards the strategy we have set on the plan we have put in the last 18 months, and this will be on a country-by-country basis. Q - Michael Briest: Okay. And then just one final one, and then I'll pass it on. On ABAQUS, I think the revenue looks to be about $19 million before deferred income adjustments. Was the margin around 30% in that business in Q4? It seems high because the cost increases that are attributed to ABAQUS were 11%, which gives me a profit of about 6. Is that right, Thibault? A - Thibault de Tersant: Well, you know how to confuse things, no doubt about it. Q - Michael Briest: That's a high number. I thought ABAQUS had a 20% margin. A - Thibault de Tersant: Actually, there are some roundings, so the ABAQUS margin in the fourth quarter was, at least compared to our fourth quarter margin for Dassault Systemes, about 10 points below. For the full year, of course, there is not such an impact. And what we are working is that starting second half of 2006 there will not be dilution any more coming from ABAQUS. Q - Michael Briest: Okay. Thanks very much.

Thank you. Your next question comes from Jay Vleeschhouwer at Merrill Lynch. Please go ahead. Q - Jay Vleeschhouwer: Thanks. Good afternoon. Sorry I missed you in Paris this morning, Bernard. I hope you don't mind a couple of questions. First a somewhat technical question perhaps, but I think it's important for understanding how you're thinking about your future PDM growth. Could you talk about the R&D you're doing in PDM, specifically the work you're doing in terms of improving ENOVIA towards what you're calling the Master Model architecture? If you accomplish that as planned in terms of the development work, could that begin to have a commercial or revenue impact by next year, for example? A - Bernard Charles: Well, thank you for the question, Jay, and I hope to see you soon in Paris. Clearly, what is interesting in 2005 is to see how ENOVIA was really deploying production in very large scale. ENOVIA has contributed significantly, both in absolute terms and growth terms, as I said a minute ago in the data we shared with you, from the end-user revenue to the Dassault Systemes growth. We are very large sized now, using and leveraging ENOVIA, not as a PDM system but as a true PLM system. In short, it's the entire product process and lifecycle management repository. I can give you one single anecdote. When you look at the 787 program worldwide, they deploy over 187 partners. It is ENOVIA on demand. There is no partner that can contribute to this airplane design program, whether it’s design or manufacturing, without having access to ENOVIA online from Boeing’s computer data center. So I’ve seen some of our competitors making big claims about online things. We are doing on demand. We are doing it already with our customers. And that’s for sure something that can be seen around the world. So it’s working in big scale and even being deployed on previous programs. So using this capacity power for collaboration on previous programs, i.e. with non-V5 product models. So, that’s the trend. I see this ongoing this year and I think it will be part of a very interesting race on the market. The results are really meaningful. And really it’s becoming now a prerequisite for collaborative product development, as well as for collaborative manufacturing development. It’s not often very well-known, but the manufacturing hub which is inside the DELMIA is, in fact, the ENOVIA manufacturing hub. So I think it’s something that will continue to expand. On the SMARTEAM side, we had tremendous success last year within the supply chain of large OEMs, using the combination of CATIA and SMARTEAM for product replication. And I can really explicitly say that most of the Toyota suppliers and small suppliers are really adopting now both CATIA V5 and SMARTEAM to do that function. We will continue to invest to ensure we can scale up, specifically on the SMARTEAM side. And on the ENOVIA side, to expand in the area of what we call service after sales, because that’s part of the lifecycle management. Some of the customers who have already started to deploy massively says we want to use it for web-based application in the service after sales. And of course, the front end will be interesting because we are going to use Virtools technology for that. That gives you an idea about where the R&D is going. Q - Jay Vleeschhouwer: Okay. But would you be willing to comment a little bit more in detail with respect to any renovation, or new architectural approaches you might be taking towards ENOVIA and SMART? A - Bernard Charles: Well, the ENOVIA architecture is a V5 architecture. And there is, the main evolution that you will see this year is really, there are really two major base that will be done. One is to provide a seamless flow between the manufacturing hub and the engineering hub, because those two words are connected today, but they are not seamlessly integrated. And while this works, customers are telling us that it needs to be better integrated. That’s one direction. And the second direction, as I said, is to continue to scale up the capacity of SMARTEAM, which has been very successful in many, many customer locations, so it can provide enterprise-wide scalability, initially for PDM function. As the product’s structure is becoming common between ENOVIA and SMARTEAM, that provides the supply chain collaboration that I talked to you before. Those updates will be done as part of the Version 5 product rollout. Q - Jay Vleeschhouwer: Okay. A - Bernard Charles: The 2006 Version 5 product rollout. Q - Jay Vleeschhouwer: Bernard, with respect to CMP, one of the critical reasons for your doing that, taking on that role, is to improve the productivity of the channel, at least that’s one of the assumptions. Is it too soon to say that the revenue run rates, the productivity of those resellers, has in fact begun to improve and that it is attributable to CMP as compared to IBM? A - Bernard Charles: Well, I think both parameters will work. Clearly, as you noticed in the announcement that we did with IBM this morning, I think what is a significant move moving forward with this alliance is the fact that, as the PLM show cases now are becoming so large around the different geographies, it’s becoming a significant value for us together to deliver consulting services on worldwide deployment forces, resources, when it comes to the extensive enterprise deployment. And clearly IBM is the best-positioned company to do that. So that’s a core element of this announcement that was said. It was clear that Mike expressed the fact that he wants to do it for the entire supply chain end to end from customer requirement to product delivery to the consumers. And I think IBM has a big stake in that project, because it drives a lot of middleware businesses too on equity side. So that’s one thing from the fully integrated enterprise business processes. On the CMP side, Channel Management Program, the sales process is still product oriented. We are not there from a process orientation standpoint yet. So we need to focus, as I said previously, on making sure that we increase the CATIA visibility, we increase the DELMIA visibility on the DELMIA direct channel, we increase the, in short, the application visibility in the channel. And step by step, coach the channel to sell business practices on top of that. That’s what CMP will bring, and I think we are building a potential for growth here. The reason why in Thibault’s comments we are cautious is, because we need to put this in operation, in big scale worldwide and the proper infrastructure needs to be there. But I am confident that this will pay off. Q - Jay Vleeschhouwer: And lastly, for Thibault. Is it accurate to say, Thibault, that the SolidWorks operating margin is still comfortably above 30%? And if so, are you able to take some of that disproportionate profitability, let’s call it, at the parent company level and reinvest it in some of your other initiatives or do you put it back into SolidWorks? A - Thibault de Tersant: In fact, yes. First of all, you are right that now the SolidWorks operating margin is better than our average operating margin, and will exceed 30% for 2005. The fact is our other existing businesses are also delivering an improvement in margin. And the reason why you don’t see the improvement is simply caused by two factors in 2005, the acquisitions that we have done and some impact coming from, again, depreciation. But if you look, if you exclude acquisitions and the gain impact, you will see that there is more than 1 point improvement in margins actually in 2005. Q - Jay Vleeschhouwer: Okay. Thank you very much. A - Bernard Charles: Thank you, Jay.

Your next question comes from Matthew Hammond at Credit Suisse. Q - Matthew Hammond: Thank you. Could you give us a bit of an update on the integration of the sales force for ABAQUS, where they are in knowing how to sell it? And can you just give us a bit of an update on what your channel to market is really going to be for this product? A - Bernard Charles: The model we have for ABAQUS is very similar to the one we have for DELMIA. Those product lines are at the beginning of their potential, a lot has been done, but as compared as to what could be done, I have given, shared with you some ideas about where we, what we see being the addressable market. So the practical way is going to be we continue to expand the dedicated application sales force in all geographies. It’s clear that for large customers, when we entertain already a very strong customer relationship, progressively it’s going to be a single acquisition contract. But that’s easy to do. The second factor is that progressively we will take advantage of our channel. Our channel for PLM is a powerful channel. Those partners are very strong partners. They know how to sell complex applications. They want to expand in the DELMIA area this year; we started last year. So our sales force for those specialized applications is going to be a mixed model between direct and indirect, and the indirect piece is going to grow in years to come. Today, Mark Goldstein, now running the total business for simulation, has been doing an outstanding job to engage with large companies. And clearly engage on a consultative basis, as opposed to basic sales of software, because customers like that, and they wants to make this work this way. So this gives us a business model where we have, I think, a significant operating margin level as we move forward. And I think we already see it in one quarter of operation, and I think we should leverage it in 2006. So don’t think, don’t conclude from my comments that we are just going to put direct sales force. We are going to leverage consultative selling, as well as total solution selling, as well as indirect model across all the specialized brands. Q - Matthew Hammond: Can I just follow up on that? So if we’re assuming, give or take, Euro 100 million out of ABAQUS this year, which is some but pretty modest growth on where the firm was running before you acquired it, what is, you know, what would you regard a good growth rate for this business on a 2007/2008 basis? Is this better than Group or at Group type level growth business? A - Bernard Charles: Well, it should be about 15%. Is the potential higher? Yes. Do we have work to do? Yes. I like when a customer like BMW says I am going to now make all my simulation for crash-worthiness on SIMULIA ABAQUS, because you start with one car program and you grow. So we are going to start with our large customers. I was very pleased to see, between March and September, between the announcement and the closing, several significant customers came back to ABAQUS and said “Our decision is clear, we want to move and grow with You.” So it’s too early to say when this leveraging capacity will really become very strongly visible, but if you want a number it’s going to be about 15%. Q - Matthew Hammond: Okay. Thank you very much. A - Bernard Charles: Welcome.

Thank you. Your next request comes from Clara Van Der Elst at Standard & Poor’s Equities. Please go ahead. Q - Clara Van Der Elst: Hi, good afternoon. My first question is on the service margins in the fourth quarter. Would it be possible to elaborate on what happened there? To which extent is it a result of the consolidation of ABAQUS, and how should we look at that going forward? And the second question is on the growth in Europe in the fourth quarter. Could you mention any specific countries or clients or products that contributed, or could you name one? And then the third question is, could you, the growth rate via IBM’s reselling and via Transcat with the Rand organization, could you elaborate on the differences between them? A - Bernard Charles: Thank you for the questions. Thibault, do you want to take it? A - Thibault de Tersant: So, services in the fourth quarter was the first question? Q - Clara Van Der Elst: Yes. A - Thibault de Tersant: I mean, the increase in margin is coming from, first of all, our improvement for the full year of about 4 points in gross margin which is coming from truly, you know from us refining our services business model and going to higher-end services, more consulting, essentially. And the other factor was that we did recognize a few million, Euro 5m, about Euro 5 million of services that were actually provided already in the third quarter, but could not be recognized in the third quarter. This is what brought truly the very strong appreciation in margins in Q4. But to have a good reflection on margins in services, look at the full year and you will see that we are now at about 24% gross margin, which is becoming a good measure of our profitability in services. Q - Clara Van Der Elst: Okay. A - Bernard Charles: Europe too. A - Thibault de Tersant: In Europe, well, in Europe we had an excellent growth, you know, and 35% growth, truly, in the fourth quarter. Excluding ABAQUS it was still 28%. Excluding the services bump or positive impact, it was still 25% growth. So it was a fantastic quarter. But it happened after three years of relatively modest growth, if any, in Europe. So we knew that there would be some kind of recovery. And as usual, in Europe our customers tend to wait until the end of the year to see if they can truly, freely, spend their budgets on us. And so the investment decisions have been made in the fourth quarter in Europe and we are used to that process. And so this explains the very nice growth in Europe in the fourth quarter of 2005. And we have a few large wins, but there was no real spectacular customer order in the fourth quarter. It was not a mega order that caused the increase, but a much more well-distributed increase in spending. Q - Clara Van Der Elst: Okay. Yes. A - Bernard Charles: And the last question, about the TransCAT Rand, I want to make the following comment, Dassault Systemes intends is not to become ourselves a business partner. That’s not the long-term strategy we have. So we are not going to replace our business partners, we are going to strengthen and help them grow. Whether it’s on the SolidWorks side, with VAR channel, or from the PLM business partners. So the acquisitions or the moves -- local moves we did should be put in the perspective of this transformation we are going through. To really leverage the local skill on knowledge, to be prepared to have our own organization, to do the CMP as described and as we have done it in eight countries already. So this process is going on and this is a very, very important one, so redirecting the people to really become indirect salesmen and doing channel animation support. As a matter of fact, we are going to do even more than that, because more and more large customers, as well as mid-tier customers, ask us sometimes to be directly involved. And we have ways to do that now, to support their business transformation. So that’s what this is about. And no, not a strategy to become ourselves a business partner. Q - Clara Van Der Elst: Yes. Okay. And is this investment in some way, if you compare it to IBM, can you see it’s improving? A - Bernard Charles: I think it is. But the most important thing with channel leadership is to really show to the business partners that we can help them to grow, improve their total value selling to the customer and improve the customer satisfaction and capabilities to deploy PLM. This is happening. We have been successful, in each of these eight countries we talked about in the past quarters, to really do this transition, I think. And it’s win, win for everyone. Customer is winning, the business partner is growing and we make the system more leaner and efficient. And the most important thing when clients can position the business partner to not be selling one product brand but being able to sell the total solution, which is important for small/medium-sized businesses. I don’t think this transformation is going to be over in 2006. It will expand. But we truly, truly will be able to leverage that beyond 2006. This is what we are going to continue to do. Q - Clara Van Der Elst: Okay. But does TransCAT, does it also sell SMARTEAM and ENOVIA? A - Bernard Charles: Yes. Q - Clara Van Der Elst: Yes. Thank you. A - Bernard Charles: Yes, yes. Of course, yes. As well as DELMIA. And we are giving now all of them ways to sell the total solution. Q - Clara Van Der Elst: Okay. Thank you very much. A - Bernard Charles: Welcome.

Thank you. Your next question comes from Keval Patel at Citigroup. Please go ahead. Q - Keval Patel: Hi, guys. Just three very quick questions for Thibault. Firstly, in terms of the Q4 revenues, can you give us just a bit more color on firstly the contribution from Rand, if you can spread that out? Secondly, what the IBM service payment was for on behalf of the CMP program? And finally, some idea of what product development revenues were in the fourth quarter? A - Thibault de Tersant: What is your last question, I am sorry? Q - Keval Patel: It was on product development revenues in the fourth quarter, if you could quantify those? A - Thibault de Tersant: Okay. Okay. We don’t have them to disclose exactly each small tiny line of our business, and so we don’t do that for Rand. The CMP payment, this I can share with you, was Euro 7 million. And the product development revenue is actually on our P&L and was Euro 6m. Q - Keval Patel: Great. Thank you.

Thank you. Your next request comes from Neil Steer at Redburn Partners. Please go ahead. Q - Neil Steer: Thanks very much. I just have a couple of very quick questions. Thibault, in response to an earlier question with regard to the outlook for the CATIA seats this year, I think the question was should be expect it to be ahead of 6%. In your response you seem to imply that we should expect it to be down from 6%. Can you just clarify whether that was indeed the case and what the reasons were? A - Thibault de Tersant: Yes. The answer is very clearly that today in our guidance we have not taken the next generation in growth of the CATIA seats, and we are targeting somewhere between zero and 6% growth for the CATIA seats. So, first of all, maybe a little bit more modest that than for 2005. Q - Neil Steer: Okay. And just a couple of housekeeping questions, as it were. Can you tell us what the cash tax payment was? And can you also dis-aggregate the depreciation in the working capital, the non-cash items in the P&L? I think they were shown as a single item in the reconciliation at the back of the statement. A - Thibault de Tersant: Okay. So I am not sure I remember what was our cash payment for taxes for 2005, so that’s a good question. And if you believe that’s an important question, I would be happy to answer it, but I need some help to answer it because it’s very complex, of course, the reconciliation between what we have to account for in our P&L, and what is effectively paid as a total tax. That’s not……. Q - Neil Steer: Okay. Depreciation in working capital, can you separate those? A - Thibault de Tersant: I am sorry? Q - Neil Steer: The depreciation in working capital, I think they were shown as a single item in the back of the statement. Can you tell us what they were separately? A - Thibault de Tersant: The depreciation is mainly coming from physical assets. Q - Neil Steer: No, no, sorry, no, not what it is, what the figure actually was? A - Thibault de Tersant: You mean the breakdown, the breakdown of the depreciation? Q - Neil Steer: Yes. If you have the figure. A - Thibault de Tersant: Okay. This I can find for you relatively quickly. Q - Neil Steer: Okay. And whilst you are doing that, I just have a quick question for Bernard. I think during your presentation - and it was referred to, I think, earlier on today as well and I just wanted to check I had this correct, you said all German auto manufacturers and suppliers will standardize from the summer of ’06 on these sites. Is that what you said? A - Bernard Charles: Yes. Indeed this is what I said just in the call, not this morning. In this current call we are hosting now. There is a lot of coordination in Germany for supply chain coordination between big OEMs, and it’s very well organized and that’s a very good driver for us. Q - Neil Steer: So we can take that as sacrosanct that from the middle of this year there will be a standardization program that kicks in Germany on V5 between the suppliers and the manufacturers? A - Bernard Charles: Good trials there. Everything’s a challenge, but I think the trends are there to really expand the adoption of V5, yes. Q - Neil Steer: Okay. And this is an unfair question and I apologize in advance for asking it, but there obviously have been a number of changes in terms of relationship with IBM over the course of the last 18 months or so. Why do you think IBM have chosen to, at least partially, sponsor Windchill in some of the new emerging markets such as China, and also in some of the as yet under represented verticals for product data management? A - Bernard Charles: Well, I think first of all the announcement that was done was not an IBM announcement, but an announcement from Parameter Technology. Of course, as you will notice, IBM was caught it in time. The way I would summarize it, first of all, I don’t think it has any effect on our business. Second, and I quote here Steve Neil, Steve is top leader in the IBM software division, he said there is no one with a sales quota for anything but data system application in IBM. So there is no changes there. I think it’s fair for IBM to do some promotive middleware and infrastructure, as well as services. And I think this has been happening before. And I think the comments made by this competitor might not be exactly aligned with what the field operation will be, so stay tuned. Q - Neil Steer: Okay. A - Thibault de Tersant: I have the answer to your question on the deprecation. We had a, in the fourth quarter we had a Euro 20 million in depreciation, to be compared to Euro 17 million in the fourth quarter of last year. Q - Neil Steer: Okay. Thanks very much.

Thank you. A - Bernard Charles: A pleasure.

Your next question comes from James Dawson at Morgan Stanley. Q - James Dawson: Hi, guys. Just a couple of quick questions. I wonder if you could just talk about pricing for SolidWorks? Obviously the volume growth is fantastic still. You did say you were expecting it to level off. Is it in line with your expectations? And what do you expect this year in terms of SolidWorks pricing? Are we expecting a flat year rather than maybe a decline? And secondly, just in terms of costs, Thibault, I wonder if you, have you got any plans in terms of what sort of headcount you are expecting to have by the end of 2006, where you are expecting to invest? And if you are, do have a long-term margin goal, I mean, you are saying that there is a break on the margin because of investments you are making. What do you think is the long-term goal, and when should we expect to get that? A - Thibault de Tersant: On the SolidWorks pricing, the, you know, in our expectations today for 2006, we are assuming a stable pricing. So, we are certainly not assuming there will be an erosion. We have, I think, now assessed the fact that we are able to keep the current level of SolidWorks prices. Certainly we would like to see if we can continue to increase it a little bit, but right now in our expectation it is a stable pricing. Q - James Dawson: Okay. A - Thibault de Tersant: After many years of increases. A - Bernard Charles: So this is what has to be….. A - Thibault de Tersant: In terms of costs, we are planning to increase headcount in 2006 to essentially fulfill what we are underlining in our strategy. And so these investments are going to be spread between research and development, marketing and sales. I am not expecting one of the different lines to have a superior investment compared to the others. We are in 2006 investing relatively evenly in the different lines of the P&L. And concerning margin, considering all the investment opportunities we have to expand our market, our addressable market, I am refraining right now from giving you guidance on what our margins could become five years down the road. I am putting a little bit more emphasis on top line growth and EPS growth as well, because we believe that actually with the choices we are making, we are optimizing our current and future EPS growth. Q - James Dawson: Okay. Great. Thank you.

Thank you. Your next question comes from John Segrich at JP Morgan. Q - John Segrich: Hi, guys. I am just wondering if you could answer a couple of quick questions. First half, Thibault, could you maybe give us an idea of how the Euro 9.2 million of stock-based compensation charge will flow on a quarterly basis? Is it more weighted to the front or how does that pan out? And then also, what would the expected tax effect be, so that we can figure out what the EPS impact of that charge is going to be? And then finally, on the services margins, obviously you’ve done a good job over the last three or four years of bringing those up. Have you reached the level at which they should stabilize or should we expect a little bit more improvement again in 2006? A - Thibault de Tersant: The first question is easy. The Euro 9.2 million is the linear charge. So it’s going to be one-fourth of it in each quarter of 2006. Q - John Segrich: Okay. A - Thibault de Tersant: Concerning services, we are expecting to continue to improve a little bit our services margin. I would not specify this number. We would be disappointed if we were not delivering 12.3 in 2006. And I’m sorry, John, your third question? Q - John Segrich: The Euro 9.2 million, that’s the EBIT impact from stock-based comps, correct? A - Thibault de Tersant: Yes. But this is a charge that is not tax-affected. Q - John Segrich: Okay. So the straight thing through to the bottom line, no tax benefit? A - Thibault de Tersant: That’s right. Q - John Segrich: Okay. Thank you. A - Thibault de Tersant: Welcome.

Thank you. Again Ladies and Gentlemen, if you wish to ask a question, please press "*" "1" on your telephone. This question is from James Dawson at Morgan Stanley. Mr. Dawson your line is open. Q - James Dawson: Hi. Sorry. Just another clarification on the tax. Is the amortization coming off the back of the acquisitions, is that tax allowable, Thibault? A - Thibault de Tersant: Well, it’s a different amount, actually. Q - James Dawson: What’s the best…… A - Thibault de Tersant: It can be tax deductible. Q - James Dawson: What’s the best, can you give us some guidance on what we should have in our models for tax next year, for the tax rate? A - Thibault de Tersant: Right. What we are going to effect on tax is not going to be very significantly different from what you see as acquisition cost of Euro 10 million per quarter. It’s not going to be materially different. It’s a little bit less than that. I expect that we are going to be able to effect on taxes about Euro 8 million a quarter instead of the charge of about Euro 10m. Q - James Dawson: Okay. Thanks. Bernard Charles, President and Chief Executive Officer: Okay. So I think we should conclude now. Just for the sake of being consistent between what we presented this morning at the Analyst Presentation in Paris and on the phone here, I want to make two comments. Number one, we in the presentation this morning we used an Airbus chart to illustrate how the ENOVIA environment was being used for new airplane program. And I think I want everyone to know that, because I was a little bit surprised to see some of the statements from our friendly competitors a few days ago. And in fact, it’s very, it’s speaking for itself; ENOVIA is becoming an important engine for the infrastructure for Airbus. And the second thing we presented, which couldn’t be really presented here at the call, is the long-term commitment for the well-known Toyota Motor Corporation to really continue to expand the entire PLM suite with CATIA, DELMIA, which we are doing today, and on ENOVIA, as it was presented by a Board Member and the CIO of the Toyota Motor Corporation. So we presented the video of his statement, in public that was a very strong statement about how TMC is deploying the PLM suite of products across the board. So that’s just to make sure there is no confusion about marketing statement and reality here. I wanted to add those two comments. Once again, thank you for your participation to this call. And of course, we keep in touch to address any further questions you would have. I will talk to you soon or at least in three months from now. Bye-bye now.

That does conclude your conference for today. Thank you for participating, you may all disconnect.