The group, which sells software to automakers, planemakers and industrial firms, forecast annual revenue of between 5.93 billion euros and 5.98 billion euros ($6.59 billion to $6.53 billion), compared with the 5.67 billion euros it earned in 2022. Including currency fluctuation, it expects annual growth at around 5%.
However, the group's outlook for a decline in licence revenue of 2% to 7% in the first quarter is "weaker than expected, setting the licences up for a hockey stick-like cadence through 2023 which we believe the market will struggle with given the macro (economic environment) and concerns around licence to subscription headwind," JPMorgan analysts said in a client note. Dassault Systemes, whose clients include Ford, Bosch, Boeing, Adidas, Coca-Cola and Pfizer, reported total revenue of 1.58 billion euros in the fourth quarter, up 10% on the year in constant currency and above analysts' forecast of 1.57 billion euros.. The result was also above the company's own guidance range of 1.53 billion euros to 1.57 billion euros.
Subscriptions revenue grew 18%, while licence sales showed a 5% increase. The group is on track to reach its 2024 earnings per share objective, it said in a statement. Dassault Systeme's software sales in China, a big market for licence-based revenue, have been lagging behind while the country has been under two years of COVID-19 lockdown restrictions, with a mid-single-digit growth in the fourth quarter. "The problem has been for us the small and mid-sized businesses which is an important pillar of the economy in China. We can expect that this will all rebound in 2023, but it's too early to say," Chief Financial Officer Rouven Bergmann told journalists in a call. "We are very excited in the area of battery design and battery development. It's probably one of the fastest growing parts of business dynamics and activities," he said. The group expects a rebound in the mainstream small and mid-sized market in China, with growth coming from aerospace and the auto sectors, which is the source of large transactions for the company. ($1 = 0.9075 euros) (Reporting by Dagmarah Mackos and Lina Golovnya; Editing by Jacqueline Wong and Christopher Cushing)
