Transcript : Dassault Systèmes SE - Analyst/Investor Day

Rouven Bergmann   CFO & Executive VP

Welcome. Thank you for being with us here today at our Capital Market Day 2025. I'm really excited to be here with you to kick it off for us today. I know yesterday, we already had very interesting conversations for those who were able to join us over dinner. I hope it was a great moment. We all enjoyed it. I can speak for the Dassault Systèmes family. It was a great moment for us to exchange with you.

I also want to welcome everybody who's joining us online here for the session. As you've seen this morning at our press release and from the discussions we had yesterday evening, but also leading us into this venue here, it's a very exciting moment for us because today, we share the most strategic evolution in Dassault Systems history. We talk about AI for the industry, and it becomes our compass. And 3D UNIV+RSES creates the next cycle of growth for our company. And what's important to highlight that this strategy is already in full execution and operation.

This is also how we have structured the agenda today to share with you in real practical terms, how we implement the strategy and put it in execution. I think many of you have already witnessed it today when you visited our playground when you spoke to the start-ups. And of course, you will hear from our clients as well and from our team on how we put the 3D UNIV+RSES into action.

The third message of my introduction I want to share with you is that we are confident in our midterm financial plan. And I will share with you the elements of our growth plan later this afternoon and of course, the impact that 3D UNIV+RSES will have, as you see reflected in the doubling of our EPS, which we have now extended to 2029, as you all have, I guess, noticed in our press release this morning.

So this is the structure of the next 3 hours. And now I have the great pleasure and I'm very excited to welcome Pascal Daloz, our CEO, to share with you what it means to open a new era with 3D UNIV+RSES. Pascal, please come on stage.

Pascal Daloz   CEO & Director

Good afternoon or good morning for the one being on the other side of the Atlantic. Always a pleasure to be with you at this time of the year, and thank you for joining. I know some of you made a long trip to come here and I hope you will be satisfied with the content we have prepared for you.

So as you pointed out, Rouven, I think 2025 marks a turning point for Dassault Systèmes. And today, I think my team and I are very excited to share with you what we believe is the most strategic steps of the company since our funding 45 years ago. And we are unveiling 2 key elements. You should keep in mind, Rouven made already the comments, which is this new compass or the new positioning, if you want, which is really the AI for the industries, and we will explain what we put behind.

And then our new value equation, which is really the 3D UNIV+RSES as a growth catalyst not only for our customers, but also for us, for both. So I think this is representing a shift in our approach, but fundamental evolutions on how we see the future of the industry, how we are leading in this space, how we will continue to deliver the value to our customers and partners.

And I think joining us today to present these visions, it's my pleasure to have some key leaders of the executive teams who will do the presentation with me, Elisa Prisner, Head of the Strategy and Industry and Transformation and Marketing; Florence Hu-Aubigny, Head of Research and Development; and Patrick Johnson, Head of Research and Science.

So let me start with a simple question. What defines Dassault Systèmes? I think since the inception, we can say Dassault Systèmes has been the trusted partner for the industry transformation. And I think what makes us stand out, there are a few things. One, I think we could claim that we have a deep industry knowledge. I think we can claim we have also basically an unmatched installed base with 370,000 customers worldwide.

But also we have a scale and a credibility across the 3 sectors of the economy we are serving, the 12 industries. And each of them are in a growth trajectory, whenever we speak about the manufacturing industry at large, the life science and health care and also the infrastructure and cities. But I would say Dassault Systèmes is also changing the game in the most innovative and promising segments such as humanoid robots, electrical vehicles, the next generation of nuclear projects, the next drugs, luxury brands, just to name a few. And we don't just follow the market, I think we create our own market. And here is the proof.

With 3DEXPERIENCE platform, we expanded our market to EUR 100 billion. And I think with the generative economy, our next strategic move, we are redefining our market to EUR 1 trillion. And I will come back on this because I know some of you are questioning where this number is coming from. But what you should keep in mind is along the year, we have also, I think, proven our ability to turn the visions into value. And we execute what we plan. We even turned the crisis into opportunities.

Remember, at the time of the COVID, not only we enabled the continuity but also we reshaped the industry, the health care industry at that time. Now I think it's time to go a little bit deeper into the next wave of industrial transformation, and let's start.

So if you remember, 2 years ago, I made this statement or I shared these visions about the generative economy as the convergence of the experience economy and the circular economy. And today, I think it's no longer anymore a concept. It's really happening. And what I want to do right now is to present its value creation system. That's really what will be the core of the presentation this afternoon.

To put in short, I think the generative economy is what I call a V+R economy. It's obviously accelerated with artificial intelligence, but specifically for the industry and in which I think the intellectual property is really the new currency. So let me explain.

We are entering in this V+R, virtual plus real economy, and it's more than a shift in terms of technology. I think it's a new way of life. You already -- all of us, we already live in it. When at work, we live in this hybrid environment, V+R, when you are using Zoom or all this kind of new interaction systems. But today, we can design, we can produce, we can learn, we can even cure in it.

So the V+R is really a value creation engine for the future. And why so? Because the virtual world is not only representing the real, but I think now the virtual world is also generating the real. Think about it. If you change your EV car, whatever it's a Tesla or BYD or Volkswagen, I think you keep now the virtual twin of the car with you. All the software functions you bought, you keep it even if you change the physical car. This is the virtual twin of the experience of the car, the driving experiences. And that's really what the V+R means.

In my view, the factory of the future will be the one producing the things which have both sides, the V+ the R. And to do that, you need a V+R factory. And I say that Dassault Systèmes is this V+R factory. Now it's very concrete. What do we want to do? We want to enable our customers to develop the V+R products. To do this, they need to also have a V+R organizations. And this will also be powered by a V+R business model. And we will zoom to give you concrete example what we put behind this.

But what does it mean? It means all the customer, they can now shift the physical product to the software-defined experiences. This is what means V+R for the products. They can shift from a process-centric organization to an agile generative enterprise. Why so? Because they can build on the V+R workforces, the new companionships, what we call the virtual companions. And from a business model standpoint, you can now shift from an asset-based approach to an IP-based business model, which is fueled by the knowledge and the know-how of the company.

To make this V+R generative economy a reality for all customers, we have introduced our seventh generation of representations. We call it or we call them the 3D UNIV+RSES. And it's really a game changer. It's a game changer because the 3D UNIV+RSES are not only transforming how industry functions, I think it's redefining what's possible. And why so?

First, because the 3D UNIV+RSES are a combination of many virtual twin -- multiple virtual twins. You are familiar with the virtual twin of the products. You remember when you see the car crashing against the wall, and we are basically predicting what will be the behavior of the car. This is the virtual twin of the car.

You are also familiar with the virtual twin of the manufacturing plan. But do you know we can build the virtual twin of the organization, of the company? Do you know we can build the virtual twin of the supply chain? We can build the virtual twin of the business model as well. So keep in mind, this idea of the virtual twin is not linked only to the product side.

If you connect all those virtual twin together, what can you do? You can manage the cycle of life of the experiences you are delivering to your customers. That's what the UNIV+RSES is about. This is the first point. The second one, I think the 3D UNIV+RSES is also built on the power of food industry saving AI. So the AI needs to be industry aware. Otherwise, it's useless. And we will make the demonstration of what is behind. And the third is really the 3D UNIV+RSES are ultimately about mastering the life cycle of the intellectual property, the IP.

And we are moving or we are shifting from the product life cycle, the PLM to what we call right now the IPLM, the IP life cycle management. So what differentiates the winners in the future? I think it's exactly this. It's the ability to elevate and protect their intellectual property in all forms, whatever it's product related, but also from an organization standpoint, from a sourcing, a supply standpoint, you have IP in almost everything the company, our customers they do.

So this is why the 3D UNIV+RSES are powered by the 3DEXPERIENCE platform. And you remember, I'm repeating this for almost 5 years. The 3DEXPERIENCE platform is for the knowledge and the know-how. That's what you should keep in mind. So now what I would like to make clear is our approach to AI is very different compared to what you have seen right now. I think we provide AI for industries which is trustable, secure, sovereign because it's fueled by the industry corpuses. So it's not only the web data, it's really the industry corpuses, and we have built the 40 years legacy with many of our customers.

It's anchored in science because we combine it with modeling, simulations and data science. And why this is important? Because we do not allow hallucinations when lives or critical systems are at stake. If you have to certify the drug, if you have to certify the nuclear plant, I mean, there is no way you cannot be able to -- I mean, to demonstrate it with certainty.

And last but not least, I think our AI is also hosted in sovereign cloud environments. And in the current context, this is also making the difference. My last comment around this is really we have a strong belief. And the belief is AI is a companion to humans. It's not here to replace humans, at least that's our -- what we call the party pre. Why so? Because we believe it's a way to augment the observation and insight. It's a way to elevate the roles of the workforces, and it's possible. It's really possible.

So to wrap up, I think what should you keep in mind, there are a few things. First of all, Dassault Systèmes is entering in this new era, the generative economy. It's a V+R economy accelerated by AI for industry in which intellectual property is the new currency. We want to position ourselves or we want to become the leader of AI for industries to be the trusted partner for generating and protecting the intellectual property. And finally, I think the 3D UNIV+RSES are defining, as you make the statement, Rouven, the next growth cycle of the company, building on our 3DEXPERIENCE platform and our existing platform for the knowledge and the know-how.

And we will deliver, this virtual twin of everything to everyone to give the ability to reinvent products, enterprises and business model to empower the workforce of the future. Now why will our customers adopt the 3DEXPERIENCE platform and the 3D UNIV+RSES. There are 3 fundamental reasons. The first one is because there is some magic behind. The second one is it's a new level of performance we could achieve. And the third one, this is opening a new possible.

Why it's magic? Because now it's based on natural interactions. You can speak to the system, but also you can navigate into it. If you remember, for a long time, we were a prisoner of the screen. So we came with this beautiful concept of the virtual twin, but we were hitting our face on the screen, on the 2D screen. Now you can be in, you can navigate and you can basically do what you do in the real life.

So this new world, we can live in it. And with the cloud, I think we make it accessible to all the users and all the businesses. This is for the magic, and you will see through demonstration some magic. The performance, I think it's because with this new approach, we -- it leads to an unmatched productivity gain. And it's really at some point of time, it could be a factor of 10x.

So it's not anymore an improvement. It's really a moonshot. It's moonshot on several things, either because you can compress the time to market to do some developments or you can expand the innovation time, at least you have the choice. The new possible. I think it's a new possible because these 3D UNIV+RSES are allowing us to generate never seen formulas, for example, IDs, approaches that a human by itself, even if is well equipped, cannot do.

So yes, we believe there is no planet B, right? But there is a Planet V. And it's a world where the virtual and the real fuse and confuse, I think, to empower or to empowering us to imagine and create the more sustainable and human centered future. And this is this world Dassault Systèmes is building, a world where we invite our customers, our partners and you, our investors, our dear investors to lead with us. So -- and it's really happening now.

So to take you deeper into how the value creation frameworks or how the value creation works in the generative economy, it's my pleasure now to invite on stage Elisa Prisner. Elisa, the floor is yours.

Elisa Prisner   Executive VP of Industry, Marketing & Sustainability, Corporate Strategy & Platform Transformation

Thank you, Pascal. Hello, everyone. I'm here to share with you why we are uniquely positioned to lead this next era of value creation. And our core message is very clear. 3D UNIV+RSES are the foundation of a new value equation for the industry. As Pascal Daloz stated in this Capital Market Day 2 years ago, our addressable market has no boundaries and which is an unlimited audiences, both now and in the future. Why so? Because the applications of the virtual twins are universal.

But let me tell you, let me come back to what is to make it simple, what is a virtual twin. And I'd like to take an example here. Take the example of the magnetic resonance imaging, for example, the MRI provides digital data about an organ. But the virtual twin creates a complete functional model that can simulate how that organ behaves under different conditions, predict responses before and treatment before interventions can be implemented. This is the difference between a virtual twin and a digital twin.

So this is why with virtual twins, we believe and we want to make them applicable to everything and everywhere. So combining virtual twin together helps us improve the real world. To do so, we've concentrated our investments and capabilities across 3 critical sectors: manufacturing industries, life sciences and health care and infrastructure and cities, spanning 12 industries, and we will continue to go deeper into this approach.

Our focus encompasses the complete life cycle of the end product and services that you see here within these sectors as we are empowering this new economy, the sixth generation that Pascal Daloz showed you earlier, they are of massive value. They provide us the expertise of this virtual twin for representing the world, managing complexity as well as transforming working methods, and this is really important.

So what's our competitive advantage here? We do prioritize solutions delivering maximum value at critical inflection points for the industry that enable deep client relationships. So this is about sustainable end products that are continuously being reinvented and depth in what is mission-critical in terms of disciplines for our clients.

So we are transforming industries into virtual plus real industries using 3D UNIV+RSES designed to address those critical inflection points. This is how we create value through virtual representations to solve significant challenges. We can take, for example, in pharmaceutical industries, while virtual testing becomes mission-critical during drug development, avoiding costly physical trials or infrastructure with new regulations, new carbon regulations imposing penalties regarding the ton of CO2, where this is also where virtual twins ensure compliance accuracy.

So you get it, the virtual twins we create. They do represent a massive knowledge and know-how growing capital for our clients, and they become even more valuable over time with every interaction. This is why our new positioning is really important, and we are reinforcing and combining 3 value levers here.

The first one, you've seen it before, the power of excellence. Just think about luxury brands. Why do clients choose them? In our case, clients chooses us not just for tools but for trust and for the love of our brands. They are trusted by industry leaders for one simple reason, they deliver on top of their -- on top range promise.

If Airbus engineers chose years ago, CATIA, it was because we were designed -- it was designed -- designing countless successful aircraft. Why do people love -- more than n million users love SOLIDWORKS. It's a matter of excellence to perform the jobs. So our 40-plus years of expertise amplifies this collective knowledge that we created. It empowers users to master the complexity of products.

Moving to the power of value, the 3DEXPERIENCE platform, you know our platform. It's the multiplier effect. Why so? It integrates all brands and applications, creating value to combine knowledge that is far more valuable than just stand-alone application. This is why JLR chooses us, this is why Bell chooses us or Amgen or Sanofi.

Our portfolio enables us to provide science-based, user-centric experiences while mastering the impact of objects throughout their life cycle. Coming to power of numbers. Ecosystem expansion and network effect. This is what it is about. So with 3D UNIV+RSES, we are taking a fundamental step further with three breakthrough capabilities.

It's about going beyond creation to integration. It's not just about creating virtual twins here. It's about being able to connect them from different natures and different kinds. It's a major differentiation here, which enables this market network effect and exponential market expansion.

Second, the source of knowledge, you know the 3DEXPERIENCE platform, while it is becoming the definitive source of industry knowledge. And third point, instead of having AI as an add-on, we integrate AI at every stage of the products and also of its life cycle.

Now if you combine this with the Gen AI acceleration, we then multiply all 3 powers here, creating unprecedented value creation for our customers. The platform is becoming the value maximizer. It is the platform for knowledge and know-how. This is why our strategy transforms traditional software licensing into high-value experience as a service revenue with compounding returns.

Now let me tell you how 3D UNIV+RSES are unleashing the full potential of this generative economy, where experience, organization and business model is a multiplicative force. How can we make this possible for customers to shift from products to software-defined experiences to shift from process-centric organizations to agile and regenerative enterprises and to shift from traditional asset-based business model to IP-based business models.

What is the core transformation here? Data is the asset. and we are well positioned. IP is the new currency. So our virtual twin representations becomes this new value of atom, connecting to real-world data and value chains throughout life cycles, providing this new knowledge and know-how for endless V+R possibilities. With 3D UNIV+RSES, we are integrating those 3 shifts, which creates a new value equation, a new framework to reset how companies create, produce, deliver their products and services.

Thanks to AI, knowledge and know-how can be more retrievable and more distributed. So let me come back on the first shift from product to next generation of experiences powered by the virtual twin of the product. Here, we enable clients to exploit their rich patrimony of data coming from previous generations, whether 3D designs, PLM data, virtual twins and other, maybe unstructured data, thus creating new and high value from previously dormant digital assets.

They can leverage them at every stage of the life cycle. Experiences are becoming enriched and generative by design, which is a real breakthrough. We will use AI and the generative AI capacity of our platforms to produce, for example, regulatory documents and massively reduce the overloaded manual work, replacing current document management system as an example.

I can take the other -- another example. Take the connected insulin pump. In the traditional way, it's a simple product that simply delivers insulin, which is a static and reactive function. However, the generative experience transforms everything. We can leverage and combine the virtual twin of the product, the pump with the virtual twin of the patient and its behavior as well as the twin of the medical practice.

From there, we're able to automatically adjust dosing in real time for a patient and generate personalized treatments and recommendations and more powerfully, we can create new medical insights that help other patients worldwide. So to me, this market shift is not only about products and software-defined products. Companies must also transform and restructure their operations to become experience-driven organization, being able to create new services, building on the agility to continuously reinvent themselves.

This is why the virtual twin of the organization becomes so critical. With the virtual twin of the organization, we enable organizations to become somehow software-defined as well, virtual and real organizations while targeting a new industrial performance. So you may ask, what is the virtual twin of an organization?

Well, imagine your company as a product. How do you create it? How do you manage it? How do you plan and adjust? What does it consist of in terms of -- finally, it's made of human resources, capital, assets, projects. Well, today, they are mainly focused on processes in order to impact the turnover.

Now imagine that you could model your organization, allowing you to adapt, to readjust and play out different scenarios, what if scenarios. It will help you allocate, plan and manage resources differently, investments while drawing on your knowledge and expertise. So it's about keeping the constant connections between organization and its purpose. So this is why we are saying that it has to become a living structure, being agile, adaptive, mission-driven while optimizing time to knowledge with new companionship, our virtual companions, combining human resources and virtual companions to achieve new performance level.

So when you will hear us talking about virtual companions, take it this way. It can be a skill accelerator or a knowledge catalyst or even a know-how multiplier. It's about moving from time to market to time to knowledge, where we can measure success in speed of this knowledge integration.

So to achieve this new industrial performance through V+R organizations, creating next-generation experiences, it's also -- it also calls for a fundamentally new approach to value capture, which is your domain. While this is why we're getting to the virtual twin of the business model.

So how to move from the value of assets to the value of IP powered by the virtual twin of the business model. We said that IP was the new currency. So our clients can leverage and reinvent business models on top of the physical assets. Let's take this example. In the current way, making revenue can be seen as selling physical assets, machines, products, car. In the new way, we may say that we can generate revenue from the knowledge, from the data, from the intellectual property that is generated by those assets.

A manufacturing company may now make more revenue from the insights their smart factory generates rather than from the product it manufactures. What I'm trying to say is that the value of tangible assets is somehow declining, while that of intellectual property, intellectual assets is skyrocketing. And this redefines the market rules and the very nature of industrial models.

So this is why this new value equation reveals our new competitive advantage. And some players may say that -- may claim that they have strength in one of those areas, but they remain disconnected either from the product or the organization or the business model. We are integrating all 3 dimensions. This is our new competitive space where virtual twins are the essential vehicles to capitalize on virtual and real data, knowledge, know-how in this generative economy.

Now I think it's time to reveal those 3D UNIV+RSES in action with Florence Hu-Aubigny and Patrick Johnson. Thank you.

Patrick Johnson   Executive VP of Corporate Research & Sciences

Hello everybody.

Florence Hu-Aubigny   Executive VP of Research & Development

Hello everyone.

Patrick Johnson   Executive VP of Corporate Research & Sciences

With Florence, we invite you to discover live 3D UNIV+RSES. And here, we've chosen the automotive industry. In today's rapidly evolving mobility landscape, safety isn't just a priority. It's the foundation that enables everything else. As we witness an unprecedented shift toward connected vehicles, autonomous vehicles, combined with exponential urban growth, the stakes have never been higher.

Every engineering decision today, every innovation, every system that our customers design directly impact millions of drivers, passengers and pedestrians. And the challenge is immense. How to create safety technologies such as smart lightning system, for example, to be seen and to see regardless of the weather conditions, blinding rain, dense fog, et cetera.

How do we build systems intelligent enough to adapt instantly to changing environments while building customer trust and complying with regulatory. This is exactly what the power of V+R twins and organization and experience will become transformative, isn't it Florence?

Florence Hu-Aubigny   Executive VP of Research & Development

Yes, Patrick. So for that, let's step inside the 3D UNIV+RSES of an advanced lighting system, a world where engineering meets magic, removing physical constraints, accelerating innovation beyond traditional boundaries, revolutionizing the future of automotive safety for creating a safer, smarter and more sustainable mobility for everyone.

You are about to witness our connected virtual twin experiences not only simulate reality, but reveal possibilities that were previously invisible, enabling engineers to see the invisible, decide faster and reach the excellence.

Welcome to a world where engineering dreams become reality. In the new industrial reality, you are immersed into an environment that mixes in a very natural way, the real world, Uber and the virtual world, several virtual twins interacting in the UNIV+RSES of the lighting system.

Let's now give life to the V+R twin of the vehicle being insiders of this UNIV+RSES. This virtual representation confirms the real car not only feels but also behaves as the real one. You can interact naturally with virtual twins using gestures, voice, eyes and physical movements. This is the magic of 3D UNIV+RSES powered by sense computing.

But what you are seeing here is a leading masterpiece of virtual IP, decades of automotive science-based knowledge and know-how coming from leading carmakers and stakeholders as well as Dassault Systèmes assembled in one V+R twin.

Combining modeling, simulation, AI and data science, it captures everything needed for the lighting system, optical physics, manufacturing constraint and real-world usage data. We step into this V+R twin and you witness complexity becoming clarity.

Until now, it required long and complex analysis to understand the intricate relationship between the lighting system and the vehicle. From now on, they all become integrated in a clear and obvious way, understood moment from space allocation to thermal condition and electrical integration.

Patrick Johnson   Executive VP of Corporate Research & Sciences

And we can experiment the expected performance of the new lightning system, as you can see here. Up until now, design compliance and performance validations were collaborative but sequential activities in fragmented organizations. Now from now on, engineering department can benefit from requirements-driven performance experiences all along the development process, all generated by AI.

Two illustrations of this transformation. First, the leveling adjustment range for proper illumination coverage regardless of current viability or car usage conditions. Second, the light distribution for optimal illumination and visibility, both of them contributing to safety and energy efficiency.

We can continue to explore the 3D UNIV+RSES and focus now on the next step, which is the interaction between the lighting system and the production system. The V+R twin of the production system aims to encompass the production system in operations, including the supply chain in the real world, but also connecting the virtual engineering with the real-world manufacturing evidences.

This transformation is profound, where previously document-heavy procedures were the norm, now they become elevated to a new immersive AI-powered knowledge-guided intuitive experiences, which means that manufacturing knowledge and know-how become truly live experienceable IP, leveraging industry-proven Dassault Systèmes ontologies.

Our AI for industry approach ensures continuous conformity to enterprise and industry standards and now enable here optimal transition towards production. Finally, in this 3D UNIV+RSES, product and production can also be experienced through even a higher level, the virtual twin of the global program itself, which is the ultimate virtual plus real synthesis, if you will, that the company is constantly looking at integrating its observation of the operation of the world on one side with all functions, all means, all methods and with all internal and external stakeholders on the other side, all along the product cycle of life. This is taking the notion of program to a whole new dimension, ensuring the constant adequacy between the target product and the company, the organization execution.

Florence Hu-Aubigny   Executive VP of Research & Development

Patrick, talking about company and organization, in the 3D UNIV+RSES, new forms of organizations are emerging, a new companionship powered by virtual companions, embodying knowledge and know-how for the workforce of the future. Up until now, it takes a lot of time for people and organization to acquire new expertise, even more so industrial expertise.

From now on, our industry virtual companions powered by AI, aggregate the world representations and observations and then reveal and synthetize in seconds industry knowledge and know-how through natural conversation. Let's meet with your aspiring partners in 3D UNIV+RSES.

Florence Hu-Aubigny   Executive VP of Research & Development

In this new V+R modality of working, up-skilling the workforce of the future, our virtual companions fundamentally differentiate as they are always relying on industry-proven Dassault Systèmes campuses. As such, their answers are knowledge guided, confirm and therefore, trustable.

Florence Hu-Aubigny   Executive VP of Research & Development

Up until now, company was struggling to comply with ever evolving global and local document-based regulations. From now on, the regulatory skilled companions aggregate and innovate thousands of regulation documents into current formal, executable requirements models always up to date, 100% experienceable, they are relevant, the invisible, particularly reducing time to certification.

Patrick Johnson   Executive VP of Corporate Research & Sciences

Those are examples of skilled companion changing the game to the industry. But what we see here for regulatory can, of course, be applied to all dimensions within a company pertaining to all performances or divisions, including the business performances.

Let's take the example of procurement skill companions, creating a virtual twin of the economic conditions, for example, with tariffs that we all have in mind right here. Up until now, procurement organization are in a reactive mode, continuously trying to cope with the complexity of their ecosystem and their supply chains and with, in fact, a very partial view.

From now on, the connection between the various virtual twins that you've seen just before, product, production, supply chain, market environment, help decode the intricate interdependencies that drive the operations and the cost.

We can visualize purchase by line, factories, country, suppliers and therefore, infer a comprehensive list of all the potential supply chain risks from raw material inflation to component shortage to raw material dependencies and therefore, we can steer and make decisions adapting not only the operations, but the business model.

Those approaches are giving birth to new possibilities for the company by generating new experienceable and shareable knowledge and know-how, we are opening massive opportunities for business operation as well as virtual twin of business models, as Elisa and Pascal mentioned.

3D UNIV+RSES are therefore unifying, integrating virtual and real constituent in a single living environment through one common platform, the knowledge and know-how platform.

The new value equation as introduced by Pascal and Elisa generates magic experiences to project a holistic view, reveals new possibilities with elevated dimensions of knowledge and know-how and IP and masters industrial complexity and performance.

Florence Hu-Aubigny   Executive VP of Research & Development

We have discovered what our UNIV+RSES is. We propose now to live in this UNIV+RSES as being part of the engineering department. Let's deep dive into the engineering world, powered by the new generation of experiences, organization and value of IP.

3D UNIV+RSES power disruptive multi-modeling simulation, AI and data science technologies to elevate V+R data to the ultimate form of knowledge and know-how, the V+R Twin experiences. Up until now, people were drawing under a nonchalant of documents and data from various sources and various formats, and they were trying mainly to build a 360 understanding in order to act.

From now on, integrating data from various forms, regulatory requirements, industry and company engineering and manufacturing practices, return of experience from previous program as well as real-world data. Virtual companions elevate them into experienceable living V+R twins, leveraging the most industry trustable ontologies from Dassault Systèmes. This is the magic of virtual twins, transforming overwhelming complexity into actionable and experienceable IPs. This is what AI for industry means.

Let's discover now how this will apply to cyber system, which aims to govern from mission to certification for any software-defined products such as our lighting system. Thanks to the new superpower brought by generative experiences and virtual companions, system engineering becomes generative from requirements to functional, logical and physical representation, accelerating the transition from product to software-defined product.

Powered here by the 3D UNIV+RSES, Lucas, our product architect, Dassault with a virtual companion scaled in cyber system engineering generates from the logical architecture in minutes instead of days or weeks, not only the physical structure, but also its associated test plan and the execution, ensuring compliance to requirement all along the development phase. Patrick, this sets up the engineering space for the housing specific to the carmaker program.

Patrick Johnson   Executive VP of Corporate Research & Sciences

Absolutely. And we can now meet another skilled virtual companion, the Shape Virtual Designer, who is continuously trained on the industry domain to help engineer this housing part, but with extreme high-level functional consideration. Here, he doesn't talk geometry. He talks real high-level industry language, performance, manufacturing, quality, compliance.

The companion doubles the designer and generates in minutes the housing progressively, function by function and in minutes progressively. While the companion generates this unique part, thanks to our patented and unique technologies, it systematically and instantly ensures by design on one hand, the global and local compliance, global with standards, industry standards, local with company practices.

And on the other hand, the products targeted characteristic at this high-level language I was talking about. For example, minimal weight, easy mounting and unmounting, performance, minimal vibrations and so forth. And all this new knowledge and know-how is now always natively available, actionable by the professionals.

Moving forward, in the same spirit, the product engineer is doubled with another one, another part, which is the assembly companion whose mission is to generate the assemblies with control variability, reliability over time and perfect manufacturability.

In the past, for those who knows, these used to take days and even weeks. From now on, with generative AI for industry, it takes minutes to infer those functional surfaces, mechanical connections and what we call the entire tolerancing schema. This is generative AI directly empowering the industrial roles.

As you will see here, the AI for industry has taken into account all the specifications of the tolerancing and will generate what you see here, which took days and weeks before. The product is now ready for production.

Florence Hu-Aubigny   Executive VP of Research & Development

The engineering phase is completed. We are now ready to go to production. As you can see, the new way of working powered by 3D UNIV+RSES led not only to a drastic productivity gain with a factor of 10, the mantra, but also to new knowledge and know-how as equity for the company.

Patrick Johnson   Executive VP of Corporate Research & Sciences

And what you have seen here are example of all the technologies, virtual companions and virtual twin experiences. Everything here is grounded on deep science and benefit from investment over the past years that we did in a stealth mode and are revealed today in a world premiere. The value is unique for the industry. It is not just connecting with external AI technology. It is deep down investment fusing modeling, simulation, AI and data science. And this is where our AI for industry proposal is always knowledge guided, therefore, always trustable at an unmatched level, conform and operational.

Florence Hu-Aubigny   Executive VP of Research & Development

In the past minutes, you have all witnessed the fundamental shift for industries provided by 3D UNIV+RSES, combining magic V+R twins experiences with a no companionship way above IT agents but has embodied knowledge and know-how proficiency for the workforce of the future and ultimately giving birth to new possibilities as well as shareable, credible, virtual IP and business models.

Patrick Johnson   Executive VP of Corporate Research & Sciences

So you have seen with the factor 10 moonshot factor, there is a before and there is no and after. Welcome to the 3D UNIV+RSES. Dassault Systèmes aims and will become the industry trusted IP generation and management company. Thank you very much.

Florence Hu-Aubigny   Executive VP of Research & Development

Thank you very much.

Rouven Bergmann   CFO & Executive VP

Wow, what a start. AI for the industry becomes our compass for innovation and also for transformation of our clients. I think you can witness that right now. And also, you've heard from Pascal, the reasons why customers are adopting the 3D UNIV+RSES. And now we are moving to the next section, the growth drivers and business value. And in this section, it's going to be the time to look at how we put this strategy into action and execution. And I'm excited now to welcome Philippe on stage, Philippe Laufer. And this section will also be accompanied by our clients. That's great. Let's go.

Philippe Laufer   Executive VP of 3DS Global Brands

So ladies and gentlemen, today's -- waiting for go up so I wanted to say that, in fact, the moonshot has already started. Everything has started, and we see a fast now adoption, in fact, from many of the OEMs on the concept of virtual twins. See the text is not the right one. Sorry for that.

Okay. So I will go like this. I'm very sorry about that. So today, I want to be able to show you that we are already starting with some of our clients to hit this moonshot to deploy 3D UNIV+RSES and as well through having them taking benefit of the virtual twins and the knowledge and the know-how platform.

So we're going to start. We'll have, in fact, those end objects that we are going to illustrate to you. Those end objects are then -- those are the end objects we want to lead. Some of them, you know that we're already leading such as automotive. Thank you, my friend. Yes. So I wanted to present to you this end objects for the 3 sectors of economy.

So we're going to review one by one, the manufacturing sector, the life and science sector and the infrastructure and city. And for the objects that we're already mastering, we want to go to new domains, software-defined products, software-defined manufacturing system and finally, supply chain. So we illustrate that in the session.

In addition, we are gaining momentum with 3D UNIV+RSES in new categories of objects, especially among start-ups. You know that our solutions is already used by 25,000 start-ups. Why? Because, in fact, the explosion of complexity, which is their common characteristic, demands a holistic virtual twin approach.

So in this context, we are going to review 4 growth drivers, 4 growth examples. The first one, automotive. You already know we are unchallenged in automotive. But you will witness a change in the scale of our engagements and revenue. In fact, you will see that those players are facing new challenges. Shortly, Volkswagen, who you might understand has selected our solution is going to illustrate it. So even in the industry that you know us for, there is a high potential of growth.

Second example, you know us for leading the virtual twin of the products. But now we'll see that we are leading the virtual twin of the production system, software-defined production system. And when you combine that with the virtual twin of the supply chain, we are unlocking massive value for operations, and we are solving urgent challenges like the ramp-up in aerospace industry or in manufacturing industry and resilient supply chains as well.

So Airbus, for example, has already achieved substantial productivity gains on their final assembly line. And in fact, we were on stage together last week in TEC 2025 in Germany to testimony that. Then I will come to maybe end objects where you might be a little bit surprised. In fact, we're going to describe 2 examples of end objects where you will not recognize us yet, but we are already there.

The sovereign infrastructure is in the critical energy provider segment, EUR 1 billion of CapEx of investment per program. And finally, food industry. It's a major diversification for Dassault Systèmes, and we are entering, in fact, in one of the largest market worldwide. And we will hear how our scientific 3D UNIV+RSES is approach is a tipping point for multiple. So an extensive program.

Let's start with topic #1, automotive. They're facing unprecedented challenges, slower EV adoption. You have heard about that, battery supply risk, supply chain disruption, regulations, software complexity and overall fierce competition from other countries. To survive, in fact, the companies must cut development cycle. You will hear that. And they cannot do this without a scientific platform and a scientific platform serving not only engineering, but serving all the teams. This is the 3DEXPERIENCE platform. So again, it's not an engineering topic. It's encompassing the whole enterprise up to the procurement. To share a real-world example, I'm pleased to invite on stage Mr.

Thomas Kamla  

Philippe, first of all, thank you for the invitation, Rouven, Pascal and Philippe to talk a little bit about Volkswagen.

Rouven Bergmann   CFO & Executive VP

So now I have the challenging task. But first of all, I want to really thank all of you. I want to thank our clients for their trust and their partnership to be with us here today. I think this was really remarkable. Lots of reasons to believe that we could discover during these 4 sessions.

Now let's make a time check. We are a little bit late. It's about 4:30. I'm inclined to continue now if that's okay for you or we make a break, but if we are all ready, let's go. I see everyone wants to go to the next one, and I'm with you.

Okay. So then I welcome you now to the final part of the prepared part. Of course, we will have a Q&A afterwards, and we will have also closing remarks by Bernard and Pascal at the end.

So now, we are transitioning to the financial section of this Capital Market Day. And you really have seen the power of the strategy of 3D UNIV+RSES and how we put this strategy already into execution. And I'm sure now the big question is, what is the financial impact we can generate from that. And for this, to guide through this discussion, I have an agenda for you with 3 points. First, I want to recap our financial track record and growth drivers in action, our long-term growth model and growth drivers in place. Thank you, Thomas. Thank you. Bye-bye.

The second part is transition to our path forward, how we are expanding our leadership in core markets and the 3D UNIV+RSES open up the next growth levers. And third, our capital allocation, our focused capital allocation strategy and invest right strategy, which delivers consecutive and continuous EPS growth and strong cash conversion.

Now let's start with our wrap-up, first of all. Essentially, what have we achieved over the last 5 years, the way you look at our performance, the way we measure our performance at Dassault Systèmes, revenue growth at 8%, driving an operating performance at 10%, generating healthy operating cash flow growth of 8% and an EPS that's growing at 15%. All of this is possible because we have a consistent financial model. And most importantly, we have a long-term perspective. And with this long-term perspective, we create the capacity to continuously invest into our future growth.

Now before moving on to the growth drivers section, which gives us the confidence into our sustainable growth going forward, I also want to acknowledge here that over the last 18 months, our growth was below this 5-year trend. And now most importantly, we have the opportunity to accelerate our growth, leveraging our growth drivers as we demonstrated here earlier and the value 3D UNIV+RSES bring to our clients. And this is what I will focus on in my presentation.

So now let's move on, if you agree, to the growth drivers section. Now when we look at the growth drivers, we also have to look at them in the context of our rapidly evolving business model because they have an impact. And this is what's shaping the growth dynamics of Dassault Systèmes. It's visible in the consistent growth of subscriptions that you see here growing at 15% over the last 5 years, and it has an impact on the mix of our software revenue, where subscription now represents 38% of software revenue. And if you combine it with maintenance revenue, it accounts for 80% of our total software revenue, which is predictable. And that's a very good start.

Now what are the underlying growth drivers here? These drivers -- they are generating the evolution of the rapid adoption of 3DEXPERIENCE and cloud. And you see 3DEXPERIENCE cloud driving growing 18%. It's approaching 40% of our software revenue. So it's a very meaningful part of our business, growing at 18%. And the cloud grows up at 16%. And here, I want to also draw your attention on 3DEXPERIENCE cloud that is growing 70% over the last 5 years. And I will come back to this point later. And as you see here, there's a lot of room to grow going forward. And the cloud revenue share is approaching 25%.

So now with this in mind, let's transition and discuss our building blocks of our path forward. As discussed, our ambition is clear to double EPS. What gives us the confidence is our large and diversified client base, over 370,000 customers. This is the foundation of our growth model. And we combine this with our growth multipliers of 3DEXPERIENCE cloud.

And now what is new? We are creating a new powerful lever with 3D UNIV+RSES, as you saw earlier today, bringing AI to the industries. And why is this important also for our clients? Because we help them to protect their IP. And this defines the next cycle of growth of our company.

Now how do we transition this into the building blocks of our EPS growth journey? And let me summarize this in 3 simple steps. First, I talked about the foundation, our reservoir of growth, which is the 370,000 clients that are adopting 3DEXPERIENCE and Cloud. The second step is the 3D UNIV+RSES that bring GenAI to our industrial clients. It creates an acceleration effect and the opportunity to monetize AI. And this adds a new source of growth. It's a truly new growth lever. And third, we create value through focused capital allocation. This is our simple plan.

Now let's start with our foundation. And this is -- I'm recapping the last 1.5 hours on one slide. So the assumption here is for the foundation, the growth is 7% to 8% CAGR through 2029, which reflects a more prudent outlook as compared to what we presented previously in our previous Capital Market Day, which reflected 10% growth. Back then, we called it the organic growth.

Now you have seen our strategy in action. So let me walk you through in simple steps through these 4 growth drivers and give you the synthesis of what you saw earlier today, essentially combining the market opportunity with the growth strategy and the simple winning formula per growth driver. Let's start with our industrial enterprise. We have a $60 billion market TAM, and we have lots of room to grow, as you can see. Our growth strategy is to lead with 3DEXPERIENCE and expand to new domains with our value up strategy and winning new clients with our value-wide strategy. And altogether, we generate a very competitive win rate of 79% with our industry-leading solutions. This is our strategy for the Industrial Enterprise segment.

Now switching to Life Sciences. We estimate this TAM to be at $20 billion, and the growth strategy is evolving very fast, as you've heard from Anthony. We're expanding our offering to combine patient data and study experiences and leveraging AI everywhere. And this creates a real strong differentiation. I know we expand from here because we are connecting the dots beyond clinical development and replicate our successful playbook from the manufacturing industries. It creates a new growth driver, which we define by the number of molecules times the number of fabs in which those molecules are produced. It's what we call from lab to manufacturing.

Now to the consumer, Chris' presentation. As he said, we have a significant market share of $30 billion, and we have a very strong competitive positioning. Centric's differentiated strategy versus competitors has helped to drive win rates to 80%. And the winning formula is based on the core drivers that he outlined. It's about community, market and value expansion.

Now to our mainstream business. Here, we estimate the TAM to be $20 billion. And SOLIDWORKS is by far the leading solution with significant market share. The growth opportunity for us is to continue to consolidate a fragmented market where we still have a lot of 2D solutions and to increase the number of users on 3DEXPERIENCE works and combine that with the fact that 85% of our clients are only 1 to 3 seat clients. So we have a massive reservoir to value up that client base.

Now I want to transition to our next growth engine, the 3D UNIV+RSES. It's a dual growth engine and AI creates for us a once-in-generation opportunity. And of course, I'm sure you want to understand the financial impact of this potential that we are building. And we believe if you combine our strategy, we have an opportunity to generate EUR 1 billion revenue by 2029. And this includes 2 main parts.

First, we see an effect from 3DEXPERIENCE pull-through. So meaning an accelerated adoption of the 3DEXPERIENCE platform as a result of AI adoption. And second, the opportunity to monetize 3D UNIV+RSES, so generative AI. To benefit from generative AI with 3D UNIV+RSES, clients need to adopt the 3DEXPERIENCE platform. And this is also important for our clients because they need to have a platform to manage their knowledge and know-how, essentially the IP of our customers. And therefore, AI and 3D UNIV+RSES act as a catalyst to speed up the adoption of 3DEXPERIENCE Cloud. And there are 3 key levers in this pull-through effect that I want to briefly explain to you on this slide.

The first one is the value up level when customers move from V5 or legacy solutions to 3DEXPERIENCE. And on average here, we generate an uplift of 2 to 3x as clients expand users and domains leveraging our integrated platform. And I think today, we have many examples where you could hear that from our clients. Second, the accelerated shift to cloud. With 3D UNIV+RSES, we expect that 50% of the 3DEXPERIENCE clients will be running online on the cloud. And for SOLIDWORKS, every new seat we sell is with online services. So there is no SOLIDWORKS without cloud anymore.

Now let's move to the potential to monetize the 3D UNIV+RSES. This is the second lever, and this has the greatest potential impact on our revenue generation because existing and new roles will be augmented by virtual companions, leveraging knowledge and know-how with generative AI. Plus, of course, we will deliver generative experiences, creating the new possibilities that Pascal talked about.

So as for the pricing model, I'm sure you're interested in that as well, we will favor adoption. So speed matters. We will price the virtual companions like a user with an uplift. And to price the value of generative experiences, of course, we will monetize the outcome, the value that we want to generate. So we have an outcome-based model for that. So we believe that 3D UNIV+RSES, I think it's an important message, will represent about 5% of our software revenue over the next 5 years. So now if we reflect that strategy on our growth drivers that you are familiar with. So what is the mix of cloud going forward to be expected with this 3D universal strategy unfolding. We expect the cloud share to be at 50% by 2029. And we expect to have 70% of our revenue generated through our 3DEXPERIENCE platform. And so we are accelerating our growth drivers with this strategy further. And here, you see clients and logos, some of them presented here today with us, who give us the reason to believe that this strategy is in full execution.

So to summarize, it comes down to 2 key components to leverage our unique position and accelerate our growth through 2029. So first, it's about our foundation, our large and diverse client base, where we have built trusted relationships for decades. And you saw we are operating in very large markets, so we have room to grow. We're not constrained. And second, we are introducing a multiplier effect with 3D UNIV+RSES, driving the speed of adoption of cloud and 3DEXPERIENCE while creating an opportunity to monetize 3D UNIV+RSES' generative AI.

Now this strategy is not only about expanding our opportunities and accelerating our growth, it's also about how we are evolving our business model because this allows us to further accelerate and grow the share of subscription revenue in cloud. And by 2029, we expect this share of subscription revenue to reach 65% as the cloud adoption is accelerating. And of course, the higher share of ratable revenue is also a strong catalyst of cash conversion so that the business model impact has a positive effect also on cash conversion. We expect to improve the conversion from operating income to approach around 90%, thanks to a higher share of recurring ratable revenue and of course, driven and taken into account by operating income and margin expansion gradually over time as outlined here.

Now I want to transition to the third lever, which is the capital allocation. The focused capital allocation as a third building block driving our capacity for future growth. And the first thing I want to highlight here when we talk about capital allocation is our capacity to deleverage. Since the acquisition of Medidata in 2019, we have used our cash to pay down debt, deleveraging our balance sheet. We have built a net cash position of EUR 1.5 billion by the end of 2024. As you have seen, the strategy of 3D UNIV+RSES is already in full execution. And going forward, we expect that about 2/3 of our cash that we generate will be used for investments in organic and inorganic growth. And we will continue to return cash to shareholders via dividends and buybacks, which we use to offset dilution.

So now let me transition to one of the major slides here in my presentation. I'm sure you've been waiting for this. Now I want to bring all the elements together and explain to you the step to achieve the EPS growth. First, we have the contribution of the foundation. And as mentioned, we have taken a more prudent approach to derisk our baseline, taking into account the slower growth over the first 18 months. We are now assuming a CAGR of 7% to 8% through 2029 and to achieve an EPS through our growth in the foundation of the 7% to 8% to achieve EUR 1.90 by 2029 in EPS, EUR 1.90.

So second, on top of that, 3D UNIV+RSES generate an incremental EUR 0.30 of additional EPS. Remember, our prior plan had already assumed and considered an acceleration effect, but it's important to highlight here that now we have articulated a clear plan on how we want to deliver that. Now putting this together, we will be at EUR 2.20 by 2029. And finally, through capital allocation, focused capital allocation, we will drive further value, we will generate and create further value and capital allocation remains a key lever of long-term growth. So putting those 3 steps together, we have created the path to double our EPS through 2029.

Now before I conclude and we kick off the Q&A session, I wanted to take a brief moment to also discuss how we want to enhance our reporting framework to better reflect these profound shifts of our business. As discussed, 3D UNIV+RSES is going to be a key driver to accelerate the adoption of 3DEXPERIENCE and cloud. And this is driving a higher share of subscription revenue. And there's an important message here on this slide, which is today, subscription revenue accounts for 47% of recurring, but it generates 80% of our growth. It's our main growth engine.

Now with 3D UNIV+RSES and the acceleration effects through cloud and 3DEXPERIENCE, that growth contribution will be 100% because this is where the growth is coming from. It will be in subscriptions. Now to better reflect and highlight the progress on this transition, we will provide an additional visibility going forward using an annual subscription run rate. It provides a forward-looking visibility to take into account all the already contracted annualized subscription growth. So we have the subscription revenue plus the contracted annualized growth, and we'll be able to look 12 months forward to report a run rate going forward to better measure and track this subscription growth going forward. And of course, we will continue to report on maintenance and perpetual license revenue. So don't worry, you will not lose any visibility.

So before we will start the Q&A, I want to summarize the event with 3 key messages that I want you to remember and leave behind. So the first message is, we are building a company for the long term. One that delivers durable and high-quality growth, which is anchored in trusted customer relationships. And our ambition is clear to double our earnings per share, and we keep doing that.

Second message is, the 3DEXPERIENCE platform creates a strategic advantage for Dassault Systèmes. And with the launch of 3D UNIV+RSES for industrial AI, we are unlocking a new phase of cloud adoption and customer engagement. And the third message is that our capital allocation is focused on innovation and shareholder value. And every move we make is guided by a single principle is creating long-term sustainable value for our clients, our shareholders and our people contributing to our EPS growth and cash generation. As a company, we are aligned and we are positioned to capture the full value of this opportunity.

And with that, I want to thank you for being with us here today. And I would like now to invite the executive team, the ExCom to come back on stage for the Q&A.

Philippe Laufer   Executive VP of 3DS Global Brands

Exactly. So I have 4 simple questions for you, Thomas. In the current economical and geopolitical context, how is our partnership accelerating your product development and manufacturing?

Thomas Kamla  

What is the situation actually? It is a little bit on the slide here. So we see a lot of very interesting developments in the economy. We have our favorite President in the U.S. with his politics of tariffs. So that's what we see. We are coming from one crisis to another crisis, semiconductor crisis -- the crisis and the war in Ukraine that we had, what impacted us on the wiring dramatically in the past.

So -- and we see also challenges in our economy in Germany. And of course, we see a lot of competitors coming, especially from the Chinese market. And what do we need to tackle this really challenging situation. We need speed. speed, and we have to decrease our R&D spendings dramatically. And that's why we also -- that was also one discussion, Pascal, what we had with our Board members when we met to implement the 3DEXPERIENCE at Volkswagen, Volkswagen brand for the whole group.

So we are focusing on these 2 major KPIs. That's what we always said. We have to shorten the development time to be able to be more adaptable to the environment, to customer demands and regulatory. And we have to reduce the spending up to EUR 200 million. That's what we've written per year in the whole group. So that was one reason why we decided on 3DEXPERIENCE and the partnership with Dassault.

And looking at our current situation, we have to tell it a little bit to the audience, we have more than 450 tools only in Volkswagen R&D, 450. Then it is easy to understand that we have to have a real effort to manage all the interfaces. We have much -- a lot of spending per year just to keep the interfaces running.

We have a lot of gaps between these tools. And this cannot work. This is just inefficient. So -- and that's why we have decided to come to this platform strategy, what is a little bit here shown on this slide to have a platform for the ALM, to have a platform for our enterprise architecture. This is new, so Dassault system and also to have a platform for our data backbone. So that's our strategy.

So we want to come from this 450 tools to a real platform strategy. And Dassault Systèmes is for us a real perfect partner to execute this because you have the technology, you have the platform. You are -- we were talking about virtual twin and AI-powered environment. That's what we also want to implement in our organization. And I'm really looking forward to have the companion for the regulatory that Florence presented before in place in our departments.

So that will speed us dramatically. And the other thing what we decided is also we have a lot of -- we had a lot of customizing in the past with our partners. We decided on an out-of-the-box solution with SaaS Software as-a-Service and cloud-based.

Philippe Laufer   Executive VP of 3DS Global Brands

So we have built today and so already in February 3D UNIV+RSES. So in fact, Thomas and his team is already seeing today's solution through the eyes of the strategy that was just presented. And it's an eye-opener. I think it was an eye opener on how to solve some of your challenges.

Thomas Kamla  

Exactly. And we want to build this road map together. I explain later a little bit what we bring in. And Dassault Systems brings in the technology that you have. We bring in our latest products and technologies. So that's -- so we want to have a real long-term partnership where we are able to develop the road map together.

Philippe Laufer   Executive VP of 3DS Global Brands

So second topic, Thomas, is about software-defined vehicle. In fact, as a global auto leader, you are facing today challengers, let's call them challengers. And in fact, they sometimes adopt easily new modern ways to work, easy, simple. So how are you responding to that?

Thomas Kamla  

Software-defined vehicle, that's a word it's a magic word. I want to explain it a little bit. Maybe allow me a little tech deep dive here with this slide. So in the past, we had a decentralized EE architecture, so EN software architecture. So we had more than 150 control units per car. They were all developed by suppliers.

The know-how and the software was implemented, embedded. So that was just black boxes for us. So -- and now we were moving from this architecture of the past to a domain-oriented architecture. So this is the step where -- what we have now in place in our cars. where we have the big domains, the body, the powertrain, ADAS, infotainment in a certain central unit. With this, we were able to update our architecture.

So it was a really good first step, but it is not enough. It is expensive, and it is not enough to have a good upgradability and updatability of the functions. Next step, software-defined vehicle would be to have some central architecture. So compared to our body and organism, it's the brain and the heart, where you have central control units and you have just zonal architectures, they are somehow dump, but you need this on our body, it's compared to the legs or the arms. We need this to move to touch someone. So that -- that's why it's a little bit compared to our -- to the architecture that we are moving on.

So that's what -- that is a step that we developed together with our colleagues from Rivian in the West. So Rivian is also a client of you. So 3DEXPERIENCE will also help us to exchange data much more efficient as in the past. And with XPENG in China for China. So that's what we do. And we all benefit from this development because we are able to develop customer-defined vehicle. So that's what our task is.

We are developing customer-defined vehicle with their architecture. We bring in our latest products and the heritage knowledge of how to develop platforms and cars, we are really strong in this. We have historical data, as mentioned before. So that's really what we do, and they bring in the knowledge from the new kids on the block. So that's what we do. And this is also maybe a very interesting thing. We are moving from a more product development-oriented development towards customer-centric development of experiences.

And I think both companies, Dassault Systèmes and also we at Volkswagen, we are matching perfectly together to reach this goal. And that's the slide I really like because that's my daily work. I'm in charge of this product. I really like it. So this is a customer-defined vehicle. It's our ID1. And we -- so Pascal had driven powered by Dassault Systèmes.

So why is this important? Because with this car, we implement really, really new things at Volkswagen. This is the first car where we implement the software-defined, the STV architecture with development driven. So it's the first car. And it is the first car where we implement the 3DEXPERIENCE. And we want to shorten our processes. We want to reduce the R&D spendings. And this is the, let's say, the first testimonial where we have the chance to perform together.

Philippe Laufer   Executive VP of 3DS Global Brands

Okay. Well understood. So quickly, the two last questions, regulation. And in fact, also, you say you work with China, you work with U.S. So also in a global supply chain, value network environment. How can the platform help you?

Thomas Kamla  

Very hard step from ID1 to regulations. So as Florence said before, we are in Volkswagen document oriented as well. So we had the diesel gate. We had 5 years monitorship in-house, and we have had to optimize or rework all of our processes that they are bulletproof. And that was right. So that was right really. So -- but how -- yes, how is our approach on this or was our approach on this?

We do everything with -- for ICE control. So for ICE control means that a responsible manager has to approve or sign the results, the approvals of the certain maturity gates and milestones. And we do this with manpower, with meetings, with documents. And for the future, we want to do it with your powerful platform where compliance is implemented by design in the platform and the engineer sees every day if it's compliant or not with his result. That's maybe the main, let's say, game changer for us when we talk about this field here.

Philippe Laufer   Executive VP of 3DS Global Brands

So we can switch now to the last question because as you've seen, we are shifting to 3D UNIV+RSES. So of course, in Volkswagen already Virtual Twin is adopted as well as the knowledge and know how platform. How do you see further potential and collaboration on the topic?

Thomas Kamla  

Yes. Let me start with this here. So we have this overarching targets. I've mentioned before, we have to cut our cost, R&D spending. We have to reduce the development time, and we have also increased the quality of our products. And for us, you as Dassault Systèmes are our partner to reach this goal, this overarching goals to fulfill our ambition. That's what we talk about every time when we talk about with the Board members. So that's really the overarching target.

And of course, you are helping us with our -- with your technology, with the virtual twin, with AI, with the 3DX to implement our core initiatives like system engineering implementation or an AI-based engineering process.

We are working on this project already together with your team here. So -- and that helps us to, let's say, speed up and improve our processes dramatically. So what really important is on this way, it has to be a long-term partnership with a really good understanding of the partners.

So -- and what we bring in as Volkswagen is we bring in all our brands, Volkswagen, Porsche, Audi, SEAT, CUPRA, ?KODA. So they are all in when we -- in our partnership. We bring the latest technology. I explained before the STV. We bring our latest products. So the implementation is not just another implementation project, it is the ID1, it's the project for Volkswagen. And it's the EQ8 at Audi. So there are really high performance and high, let's say, highly important projects for us in Volkswagen, and, of course, you bring in something else.

Philippe Laufer   Executive VP of 3DS Global Brands

Yes. We -- in fact, so you've heard Elisa, the power of each of the expertise of each of the brands, the industry knowledge and know-how that we have as well and of course, the virtual companions. And of course, I think more than that, a friendship.

Thomas Kamla  

Friendship, that's really important. So from my perspective, I'm just talking for Volkswagen, but I think it's the same as we are ready to shape the future together. So we -- I think we have a really good chance to move forward and be really successful with this project.

Philippe Laufer   Executive VP of 3DS Global Brands

Thank you. So this was Chapter 1. We move to Chapter 3 (sic) [ Chapter 2 ], and you see that even more than ever, a unified platform across the supply chain, across all the partners is essential. So second pillar, augmenting the production run. So in today's manufacturing, they are all facing challenges across multiple areas, starting with the workforce.

There is a shortage you know that of talent. And the top questions that each CEO is asking himself, how can we make manufacturing jobs more attractive? How can we boost efficiency to do more with smaller teams? How can we capture and transfer the knowledge and the know-how to the next generation?

The second topic is supply chain. In fact, there is disruptions, and it has become a real concern. Today, making the supply chain more robust, more resilient is a top priority for all the CEOs. Third, the consumers, they keep raising demands. They want product their own way, and this was a testimonial also from Thomas. It leads to high diversity. And in this context, how can the manufacturers, they increase their production speed and agility, but still hitting the market demand.

And finally, sustainability, of course, it's a good thing, but how to adapt in these growing constraints. So in Dassault Systèmes, very simply say, we help those industrial manage these challenges, thanks to virtual twins, virtual twins in the context of the 3 UNIV+RSES. You know what, we are identified, in fact, today as the inventor of virtual twins and the world leader in virtual twins.

So let me just briefly reexplain. First, the virtual twin is a science-based multi-scale model that can be simulated. That's the V part of it. We model and simulate at any scale from the operations, daily operations, the assembly steps to the entire supply chain operation. In fact, with that, you understand, you optimize and you validate the commissioning of all the manufacturing process in a very short time.

With that, we built the plan to move forward, but that's the V part. Now second, it's about the R, so -- which means at the end, the V+R. And a plan means nothing about execution. So the V+ R twin, it connects the plan to real world ensuring operations are completed. And at the same time, we're capturing execution data.

What does it enable to do? It's a perfect snapshot of operations for fast decisions, predictive insights by feeding real-time data into the models and capturing operational knowledge and know-how for the future generation. So I think with that, you have also in the manufacturing piece, production, the role of the 3D UNIV+RSES, which makes it easy for people to understand, to learn and to collaborate. And this across all organizations across the whole supply chain.

So we have, in fact, in the production, 3 virtual twins -- 3 main virtual twins, the virtual twin of the production system, all the machines, the equipment, the virtual twin of the product, of course, which needs to be manufactured and the virtual twin of the supply chain. And the value to connect those together is a cost-effective and agile sourcing.

It's also resilience and best-in-class time to delivery and an improvement of product manufacturability, manufacturing quality and lead time reduction. So let's have a look at a glimpse of 3D UNIV+RSES in the production area with Spirit, tier 1 supplier.

Philippe Laufer   Executive VP of 3DS Global Brands

So just to connect the dot, what we've just seen is the connection between the virtual twin of the product, build on core modeling and simulation, how it's projected and connected to the production system. So at the end, orchestration, execution and highest quality. So let's move to the third point, the third example, which is sovereign infrastructure.

In fact, we are going to talk here about capital intensive project such as nuclear power plant, infrastructure, railways or aircraft programs. In fact, they're high cost, several billions. And in fact, 97% of those programs are failing due to the delivery on time -- failing to deliver on time. So -- and the cost of an overrun, it explodes by a factor. I don't need to tell you the EPR-1 story. This is a perfect example.

So it makes it a massive sovereign issue. So what are the causes? Multiple, but the main ones its difficulties in understanding the impact of engineering changes on procurement, on constructions. Second, the decisions taken too slowly with stupid Excels, with documents, mails. And there is no integrated planning, neither cost management. So let's see an example.

At L&T, L&T Energy is constructing offshore oil and renewable energy plants. A typical program is EUR 1.5 billion and it needs to be delivered in 18 months. And often, it has more than 1 million, 1 million to 30 million parts and equipment and a very large ecosystem of suppliers. And in fact, delivering a large document on time and on quality is about synchronizing asynchronous processes, construction, engineering, manufacturing, procurement.

So far, in fact, companies have tried to synchronize this through what they call the project plan and always failed. In fact, you need a higher level of representation, a higher abstraction that you deal with the complexity. And in fact, this is the virtual twin of the plant, the virtual twin of the construction system and virtual twin of the supply chain that allows everyone to speak the same language.

And of course, you need the R, the R part of the V+R, which are all the data captured by the field -- in the field by ERP, CRM, et cetera, and you need to reconcile them. So let's see an example of what you're doing. In fact, imagine you are a CEO and a construction manager in the field, the virtual twin is your single source of truth for monitoring weak signals on key KPIs down to track one specific activity on an isolated piece of equipment.

In one click, you see here can drill down to the one component out of 1 million that hasn't been ordered and instantaneously access all the relevant information, documents, procurement to do. But it's not just about access and navigating. It's about action. And in fact, you can adjust priorities, resources, again, without a single mail, without a single messy Excel file.

In fact, the virtual twin to summarize, is a powerful elevation of the program knowledge and know-how. And in fact, with generative AI powered -- generative AI-powered experience, we can learn from past program and like here, predict future failures and predict even before the challenge arises.

And beyond on-time delivery, it's about facilitating knowledge and know-how transfer to the next generation of workers. So what you just saw here is an example of a virtual twin experience powered by AI. So -- and this is not surface level AI. It's deep intelligence. The system understands how the parts are fitting together, how the materials are behaving, how the process works. So it's real life.

And this is possible because we have created what Pascal, you call the corpuses for each industry. We have the grammar, and we have built this grammar with the huge community of users that we have. And in fact, we train our AI on these corpuses, this industrial data, not like others on web data.

So this has become, in fact, the new standard and already replicated, I can tell you, on large industrial project in India, in China, in France and in the U.K. So -- and let's take now another testimony of another big project, the EPR program, Hinkley Point C. Let's listen to the lady who manages all that, Michelle.

Philippe Laufer   Executive VP of 3DS Global Brands

So to be clear here, we are dealing with nuclear power programs. And that means that every dimension of these initiatives have sovereign implications, representing sovereign intellectual property and, of course, national security. So it's, in fact, a huge corpus of regulations, which were handled in the past manually, tons of documents, and it took hours to verify that in the past. And now as you have seen in the first demonstration, this is now guiding real-time decision automatically.

And all this is based on SaaS, SaaS approach. Why? Because SaaS is the only environment that provides the agility that provides the scalability and the compliance up to the highest military regulations. So nuclear and defense that call for a sovereign cloud provided by 3DS out scale, but it's not just for them. For all our clients, we safeguard their most precious intellectual property, which is their own data.

Now moving to the fourth pillar, research and innovation for new verticals. So Dassault Systèmes is operating a major diversification in consumer savvy industry segments, such as the food market. In this industry, companies are facing again, regulations, they cut the environmental footprint, ensure better nutrition and all this needs to be science-based innovation. So to explain how the 3D UNIV+RSES accelerated the transformation, we are honored to have with us Cécile Béliot, Cécile, who is the CEO of Bel Group, the well-known international food company, Cécile.

Cecile Beliot  

Hello, everyone. It's a real honor to be here today. And I know that I am the surprise of the day. Because obviously, if there is one partnership you would not expect, I guess, this is a partnership between Dassault Systèmes and Bel. So what is Bel? Bel is more famous through our iconic global brands, the little cheese Babybel with round red wax or The Laughing Cow or the Pom'Potes or GoGo squeeZ.

So we are used to say that we sell a portion of goodness all over the world because we operate in 120 countries. And it's true that usually, when you look and when you look at data and tech when it comes to food, you would usually think about, okay, the new advertising campaign that has been developed by GenAI, right? We do it also.

So I have a lot of marketers who love to do great advertising campaigns with GenAI. Nevertheless, I believe that the partnership I'm going to describe to you will bring much more value to my company and to the food UNIV+RSES than any kind of GenAI generated advertising campaign. So let's start by the why. There is a why than any food leader knows. The food system we have today is absolutely incapable to feed the 10 billion people who will be on earth by 2050. This is a data. This is a fact. All the leaders are aware about that.

And when you look at even the data of today, we cannot even consider that the food system and what I mean by food system is from farm to fork. We cannot really consider that it fits the world properly. On one side, you have 1 billion people suffering from hunger, malnutrition. On the other side, you have 1 billion people suffering from obesity, diabetes, cardiovascular disease. All these disease are pandemic. And I can tell you that there is not a single country in the world today, which do not pay attention to that because states have no money anymore.

And when you look at the cost of all these disease, we better change quickly. When you look at the supply chain of the food system, 1/3 of the food we produce is wasted every year, 1/3 of it. And when you look at the impact of the food system on the planet, it's 1/3 of the total CO2 emission, which means that it's more than all the transportation together, which means basically that we have 0 chance to achieve and stick to the Paris trajectory if we do not change the way we feed the world.

The food system use 70% of the water available on earth every year, 70%. The most important topic we will have to deal with within the next 10, 15 years is water scarcity everywhere in Europe. Today, this morning, I was reading a new article about water in Europe. If you look at the trajectory today, we may lose in Europe, 30% of the GDP because of water scarcity and its impact on agriculture and all the rest of the chain.

So you imagine that when you are a leader within this industry, small or big, you know it has to change. And what is interesting with the partnership we have built with Dassault Systèmes is that it was the start of the conversation I had with Bernard. That was the why, which has started to you need us. There is an emergency to invent the food of the future. And we are both convinced that the only way because we don't have that much time, 2050 could look far from old people like us, okay?

But I can tell you that my little boy is 8 years old today. 2050, this is his life, just his life. So there is an emergency to change, and that's why we believe that tech has a role to play and a very big one. So what is interesting also is that I think it's not by chance that Dassault Systèmes and Bel have decided to partner because I believe that we have things in common, family and companies. So yes, we think about the next generation by essence.

Second, French companies, which have succeeded to operate in all of the countries, my #1 country is U.S. I believe that Dassault Systèmes #1 country is U.S. today. We are growing massively in Asia. We are growing massively in China. So in terms of footprint, there are some commonalities.

The second commonality that I see is that we are truly committed to make an impact. We really want to deliver good. So that's why, by the way, Bel became a mission-led company last year, and we commit that every decision we take within the company should be taken on 2 legs, equally important, sustainability and of course, financial performance.

We truly believe that performance without sustainability has no future. Family and company, we think about the next generation and sustainability without performance has just no impact. So that's why we were dreaming together about reinventing the food of the future. And what are the levers I have in front of me to reinvent the food of the future.

On one side, we want to explore what biotechnology will provide us. And in this field, I don't believe that I am the expert of biotech, but there are a lot of start-ups, which are very strong and very expert and by the way, get a lot of financing from the venture capital to finance this research. That's how we operate at Bel. We have built an ecosystem of partnership with start-ups.

In a field, for instance, of what we call precision fermentation or fermentation of biomass because you understood that one of the topic we have in front of us is a topic of protein. If we want to fill the world, we need to fill the world with protein. Protein is a basic nutrient you need from the very early age up to the end, and there is no way to feed the 10 billion people with animal protein. It's proven. We didn't even have the surface on earth to feed the cows.

So it has to be reinvented, and that's where precision fermentation or fermentation has a critical role to play because we are capable with these start-ups to replicate the protein like the casein, which is a protein we use in cheese through fermentation, meaning that we do not have the CO2 impact that we have with livestock's. That's great to work with start-up.

But for those who know the start-ups, one of the most difficult things when you work with start-up is scaling up. And that's where we need the support of people like Dassault Systèmes because they are capable to scale science. They are capable to industrialize science. And that's why I was needing this backbone to help us to invent the future of food.

So when I look at the partnership, in fact, there are 3 major legs to this partnership. One leg, which is pretty, I would say, usual for Dassault Systèmes. And I will give you some picture and examples because it's already started. So one leg is about digitalization of our factories because you understood it. It's a matter of performance and there is no future if there is no today.

So let's grab, I would say, the low-hanging fruit by digitalizing all our factories and providing a deep acceleration of my productivity. The second leg of the partnership is about end-to-end vision, working on the same platform. It's product life management. And the third one, the third one is the breakthrough I was talking about. The third one is about research and innovation.

So on the manufacturing system, these are the 2 pictures of the start at Évron factory. Évron is a factory of Babybel, my biggest factory of Babybel in Mayenne. And we have started to deploy the manufacturing execution system of Dassault only a month ago. So the only thing that I can testify is, first, fantastic adoption of the workers. And we were obsessed about that because I can tell you that when you are in the food industry, you have workers which are not used at all to work with iPad, Excel file.

So if it was not super experiential for them, they would have rejected it. What is also interesting is that not only it will help us to get financial performance, but every drop of milk that we are going to save, thanks to that, will provide lower carbon footprint, lower water footprint. And last but not the least, there is a human component of it. And this is also a critical thing for us.

We want to ensure that we can have a kind of a social ladder for our workers. And when you empower them with a system with just an iPad where they can autonomously take decision, act directly on their line. You develop their skills, you develop their autonomy. It gives more meaning to their everyday job. And doing that, I'm pretty sure that we are going to have much more workers capable to climb up the social leader. And I do hope that we will have much more in the coming years, factory director coming from the shop floor.

The second project I wanted to discuss about is the breakthrough one, virtual twin to reinvent the future of food. Today, and it's not only at Bel, it's everywhere in the food industry. Do you know how we invent a new recipe, a new Babybel? We put an engineer in a so-called lab in front of a cooker, a thermal mix basically. And that's a true story. It's how we develop food today.

Of course, we get data, of course, we experiment. But basically, this is the way we all act. Thanks to the virtual twin, we will be capable to test new combination, combination of protein, combination of protein and molecules coming from nature like never before because we are convinced that everything is available in nature.

We are just not capable to use the power of nature to develop the future of food. If I put an engineer in front of a cooker, it will need -- will need or she will need 100 years to test all the combination possible. So what is at stake is to reinvent the protein of the future, is to provide food with less artificial ingredients, with less fat, with less sugar in a very accessible way because today, you've seen that most of the people cannot even afford good food with good nutrient inside.

What is at stake for us is obviously to decrease massively the time to market is obviously when you have less trial, it costs less money. And all in all, it's a reduction of the cost of innovation. But more importantly for us, the vision we have at Bel. We don't want to be the biggest one. We are not by far. But we want to be the most sustainable company and the most innovative company. And that's how we get attention from all the big ones, all the big retailers of the world because they are as much concerned as us when they see the challenges in front of us.

So just to conclude, I would say that portion by portion, we, Dassault Systèmes and us are changing the way we feel the world.

Philippe Laufer   Executive VP of 3DS Global Brands

Stay with me for the conclusion. You can stay for the conclusion. So a very short conclusion. So you've seen 4 testimonials showing the 3D UNIV+RSES, it's happening now, and when Pascal was saying, we are aiming for the moonshot, we are already started and the rocket has been launched. Thank you very much. And it's time now to -- from -- for this afternoon journey to now look at Life Science and Healthcare with Anthony Costello, CEO of Medidata. Anthony.

Anthony Costello  

Thank you. This is a great company, Pascal. We went from Volkswagen to cheese to clinical trials. Where else can you do that? Thanks very much for all of you being here today. And also, I want to say thanks for our conversations last night. I really enjoyed them. We appreciate your attentiveness to this story, our new strategy.

We're very excited about it. And I'm particularly excited to be here today speaking on behalf of the life sciences sector because as I think you've already heard from the earlier presenters, we are talking about a lot of industries poised and ready for transformation. And the life sciences industry, perhaps more than any other needs that transformation and needs it now.

This new strategy provides us a fantastic way to leverage many of the tools and much of the experience, the knowledge and the know-how and the intellectual property that we have collectively built with our customers over decades and to formulate a strategy that allows that transformation.

So I want to spend the next few minutes walking through a few of the reasons why. So first of all, the clinical trial industry runs on failure. Most clinical trials fail. In fact, it takes 10 new drugs in the beginning of clinical development, experimental drugs to yield a single commercialized approved product on the other end of the spectrum. And the cost of this failure is becoming insurmountable for the industry.

When you layer in on top of this failure rate with factors we face today, political environments, economic environments, regulatory environments, you get even more costly failure and you're doubling down on the expense, our customers have to find a better way to run fewer trials more successfully and with much more predictability before the trial starts that, that trial is going to end up being successful on the other end.

We need to be running -- we need to be seeing 1 out of 3 trials be successful, 1 out of 4 trials be successful instead of 1 out of 10. This is critical. You don't need to scroll for the notes because I don't have any. Those are for my speaker that will be here in a second. Okay. Thank you.

We began transforming ourselves 6 years ago when we became part of the Dassault Systèmes family, and we made some significant changes to our R&D investments, which you can see on this slide here, moving far beyond our traditional data capture, which has driven the Medidata business for almost 26 years now and moving into many different types, differentiated offerings for our customers, but with a single strategy in mind that we know the industry needs a better way to accommodate many different types of data, much more complex studies and to increase the attention on patients, the focus on patients and the ability to find and see a signal in a clinical trial much faster.

So if that drug isn't working, we can stop it faster. And if that drug is working, our customers can double down on that drug and accelerate the clinical development. So we've done a lot of transforming internally at Medidata, and I'll say across the life sciences sector, where Medidata is, of course, just one of the brands that make up this brand ecosystem that we feel is the strongest end-to-end capability in the industry for delivering all the way from the front end in discovery, in the lab, in molecular, sorting out molecular options on the way to a clinical trial, all the way through the clinical trial value chain and out the other side of successful trials into manufacturing.

So this new strategy that we are rolling out today, coupled with our history, coupled with the brand ecosystem that we have to support customers end-to-end in an industry that desperately needs to transform itself, we feel that this is the formula and that this is the appropriate time for us as well as our customers to make this what will become a huge transformation, but one that will change drug research forever.

Medidata last year also made a significant change to the way we go to market with our products. We combined our 35 traditional products into a set of 3 experiences that you see here, the patient experience, the data experience and the study experience. And we took a decade-old AI program and used the technology and the know-how that had been developed in that AI program to sprinkle AI across all 3 of these experiences.

So when we think about how we help our customers transform and how we rewrite the playbook for running clinical trials, that strategy is baked entirely into these 3 experiences with AI, and I hope you can see how this becomes a perfect fit for the broader Dassault strategy around creating UNIV+RSES and creating V+R use cases where a technology, coupled with a real drug or a real patient or a real clinical research site or a real protocol can make the magic that we're looking for here to get a better outcome than either the V or the R can achieve on its own.

So I'm very excited today to have one of our fantastic customers from Sanofi here to tell a little bit of how they're adopting these new technologies. So please welcome to the stage, Patrick Nadolny.

Patrick Nadolny  

Thanks, Anthony.

Anthony Costello  

Hello, Patrick. Thanks so much for being here. I know you've seen the previous presentations. I think you may be an expert in the UNIV+RSES strategy at this point. I hope you are.

Patrick Nadolny  

I do.

Anthony Costello  

We know that this has been a good fit for Sanofi because of the deep partnership that we have had. But before we get into that, can you talk maybe just a little bit more about how Sanofi has set their goals and their aspirations in line with the experience?

Patrick Nadolny  

Absolutely. And thanks for listening to the voice of Sanofi and the patients in general. And thanks to the one of you investing in health care, millions and millions of patients are waiting for therapy to be treated. So I think to me, I can say you made a very good point about the failure rate on 10 is a cursed number, only 1 out of 10 drugs make it to the market, and it takes 10 years to get 1 drug on the market. So 10 is not a good number. So definitely.

So for us, we really see the future of health care to be different as it is today. It's really about -- it's not about product, just product. It's really about an integrated, intelligent AI-powered framework to bring an experience to patients. That's what it is about.

At Sanofi, of course, like any biopharma company, we are driven by a strong R&D pipeline. But what makes us unique today is we are all in AI, and we have been embedded AI soup to nuts on everything we do. So that's why we are different at Sanofi. So we want AI to change all activities soup to nuts.

So we want really to change how we discover drug, how we bring drug to the market, how we commercialize drug. I think to me, our approach is innovation centered, data and digitally driven, and we're committed to AI at scale. And what I've heard so far resonates very well to what we're trying to do Anthony.

So we're really trying to standardize or I would say, modernize, change, revolutionize everything we do from beginning to end, simpler, faster, 10 years is far too long, so far too long, but we don't always have the patient in mind. So bringing the patient's voice into drug development is critical.

So whatever we do, and you may not all be familiar with the drug development process. So forgive my lingo. So we basically, instead of bringing patients to a doctor, now we go to the patients is what we call decentralized clinical trial. So whether we decentralize activities, whether we discover drugs through AI, whether we -- I would say, we find patients themselves through AI capabilities and data mining.

It's not just about optimizing or automating the process, it's really about transforming, revolutionizing. So one drug doesn't take 10 years. We had a good example during COVID when drugs were brought to the market or vaccine much faster. We believe we can do much better and I think we could probably get drugs in a couple of years.

So at the end of the day, so the mantra of Sanofi is chasing the miracle of science. Chasing is nice, delivering is better. So we need a strong partner to help us delivering concretely, impactfully on a human-centered framework. So it's not about transforming Anthony it's really about industry leadership, and we're all in on the AI journey with you as a partner, Anthony.

Anthony Costello  

That's great. That's great to hear. And I know Sanofi really is a leader in our industry at adopting these new technologies.

Patrick Nadolny  

Absolutely, yes.

Anthony Costello  

And driving new ways of thinking about research like decentralized trials. In fact, you're already using many different capabilities across the 3 experiences. And you're using other brands within our sector as well, BIOVIA, ENOVIA, DELMIA for manufacturing process analysis. So you're in pretty deep with this strategy already, whether you knew it or not.

Patrick Nadolny  

No, we are.

Anthony Costello  

Maybe you could add just a little bit more detail about how you see your scalability with the experiences, how you see getting in more deeply with this approach and this new strategy.

Patrick Nadolny  

No, absolutely. And by the way, those 3 experiences are resonating much strongly and better to our leadership and to the industry in general. We don't want to talk about software. We want to talk about what it makes and what it delivers at the end of the day. So patients study data. So I'm managing data for Sanofi, clinical study data at Sanofi. So data is critical.

But as mentioned, data is powering AI, no data, no AI. So that's the fuel. So we live on a ton of data, and now we're at the edge of maximizing that potential. So we are patient focused. We deliver direct to patients. And all of us in the room have taken one therapy or been vaccinated one. So it's about all of us.

At Sanofi, the study experience, so when we execute clinical trials to bring drug to the market, it needs to meet regulatory scrutiny from FDA, EMA, the Medicine Agency. So we are obsessed by study execution and good study execution. And our clinical trial are very complex nowadays.

So we need to simplify so that we can deliver drug faster to market in compliance with all the regulatory elements. So all in all, we're moving away from, I would say, single piece of software to a more integrated platform and it takes a strong partnership execution to deliver what we have to deliver tomorrow.

We want to do it at scale and the scale is important. There's many providers in the market. But when you talk about we're running hundreds of studies on thousands and thousands of patients, you need a system that can scale. And that's what Sanofi is looking for. And it's what we're getting from the Medidata platform.

We have used the data experience for many years, 13. it's not 10, it's 13, it's a better number. And we are moving into the patient experience now. And we are evaluating together what are the best options for the AI. And we know that AI is going to transform everything you do, including the virtual team.

And I like the way it was articulated today for many people, the virtual twin was a human body, but it's way more than that. It's the entire ecosystem. So we see virtual twin enabling us to really relook at everything from soup to nut, manufacturing, drug discovery, study execution, commercialization. So it has a huge potential, no doubt.

So what we want, we want. So what's at stake? For patients, when we talk about drug development, it's all about making sure the patients have an intuitive experience. So they don't have adverse concerns or side effects. We want to try to be inclusive. We want to get to the patients where they are, including in Africa, if we have to. And everything we do with AI, it's a foundation for a more connected and more effective drug development, Anthony.

Anthony Costello  

Yes. That's fantastic. And you've talked a lot about AI already, but maybe if we could just have one more minute here, I'd love for you to talk a little bit about the program that Medidata has in order to spread AI into all of the experiences.

The goal of that is both to achieve better operational performance, but also to find ways, unique new ways like synthetic control arms to really advance trials by building, in some cases, entire cohorts using AI data.

So I know that Sanofi has not experimented yet with synthetic controls, but can you talk a little bit about AI as an uplift for operational efficiency versus some of the other types of AI that you're experimenting?

Patrick Nadolny  

No, I can Anthony, I think it's both scientific and operational. The scientific part will be drug discovery and even designing experiment studies on patients that are more efficient with less risk. But what we have been doing in the industry for many years, we start an experiment, we collect the data. And then we look at the data and we make a decision. not anymore.

So we want to predict, prevent instead of just observe. So a lot of what we expect is leveraging the AI we have collected through the hundreds of studies on the thousands and thousands of patients and use that to predict what would be the most reliable outcome.

So we've been running, as I said, a lot of studies. So I think all the data we have got, all the experience we have collected is positioning us to a better future. But I think it's about drug discovery, faster study, and you may not realize, but when we run in a clinical trial, we have to visit every doctor managing that patient.

Assuming you have 20, 30 countries, you have to fly over to every doctor wherever they are in the world. So with the power of AI, with the power of disconnected and connected data on technology, we don't have to travel as much. So we save carbon footprint. We have data much faster, so we can make intelligent decisions, and AI is really helping with that intelligent decision-making and preventing issues to surface before they happen.

So at the end of the day, and I would say on our partnership, it's not just about technology, it's really about culture. I think what we want is really change the way we work profoundly. It's really about the next generation of clinical trial. It's really changing the paradigm, and we need a strong partner like Medidata to help us, our company.

Anthony Costello  

Thank you very much, Patrick. I appreciate you being here.

Patrick Nadolny  

Thank you.

Anthony Costello  

So special thanks to Patrick. That's an amazing story, but I want you all to appreciate how far out ahead of most of the market Sanofi is in the way that they look at these things. So I would call that the bleeding edge of making this new transformation, and we're very proud and excited to be doing it with Sanofi.

There is a very large market behind them that needs to also make these kinds of adoptions of new ways of working. Here's just a few examples of our primary customers already adopting the experiences. Many of them are cross-experience adopters, and we're excited to be building our portfolio with them into this new strategy and into our AI program as we go.

So I want to just close with a couple of quick minutes to explain why we feel we're so well positioned to exploit this new Dassault System strategy and bringing our customers into the world of UNIV+RSES.

First of all, foundationally, Medidata has been around 26 years, run over 35,000 clinical trials with deep knowledge and expertise across multiple therapeutic areas. These are trials in every phase, in every country and every disease area you can think of, and we now have 11 million patients if you look across all of those studies.

Several years ago, our founders had the foresight to forge important data rights and data sharing agreements with 80% or 90% of our customers, and we still enjoy those rights today. So what this has allowed us to do is gain the rights for the operational data in most cases, the clinical data in some cases, and we built over 10 years ago now a whole AI program based on that knowledge and know-how and the historical perspective that we had gained from running all these trials in collaboration with our customers.

Also 10 years ago, we formed our Patient Cloud business unit because of a dedicated interest in becoming closer to patients, providing more patient-friendly technology on studies, but also finding new ways that we could follow patients beyond a trial and stay engaged with them in the commercial setting. So another foundational block.

The third block is the experiences that I already talked about. Morphing from 35 products into 3 experiences with AI everywhere has given us the opportunity to bring customers along in an adoption curve with lots of new technology just added to an experience much faster than we could have convinced them to purchase 30 or 35 separate products one by one. So this is a foundational layer as well of preparing us for the UNIV+RSES strategy.

Next, we have a couple of strategic partnerships that have been formed over the last couple of years. Click Therapeutics, who is the industry leader in the development of digital therapeutic apps that actually are approved through clinical research and go into a drug label. Click is defining a new type of drug called software-enhanced drug, which is the combination of V in the Click Therapeutics app and are in the actual drug that the patient takes.

This is one of the best examples we've seen anywhere in our industry yet of V+R, bringing additional benefit to patients over and above either the app or the drug exclusively. And finally, our partnership with Cogstate, who is an expert company in the development of new therapies for brain health and cognitive decline.

This Cogstate partnership is critical for us because of the huge growth of the CNS market over the next few years. And with these 2 partnerships, we are poised, first of all, to exploit a whole new market of digital therapeutics and second of all, to be very close to the CNS market as it dramatically grows.

Of course, we already talked about the sector, the brands in the life sciences sector that comprise this end-to-end strategy and really help us and help our customers absorb UNIV+RSES, virtual twins and leveraging the intellectual property for all of these brands across the sector is important for the next few years for us.

All of these combined, as I've said, I think, position the life sciences sector, Medidata in particular, very well for this strategy. In fact, I think I could argue that we've been building towards this strategy for several years. And in many ways, it feels like the natural outcome of where we have been going already and certainly where our industry and our customers need to go next.

So with that, I'm going to pass it to my friend, Chris Groves, CEO of Centric, and thank you very much for your time.

Chris Groves  

I've got to sample at least 5,000, 3 times.

I then launched 5,000 and then 1,000 of them sell. And the rest get marked down or go to a landfill. Think of that process. Economically, it's a disaster for these companies. And sustainability-wise, it's horrendous for the ecosystem. And so you say, well, why is that? It's because of the time lag between knowing the demand and making the decision.

So if you can alter that whole equation, if you could, for example, have a virtual product, it's very easily developed. It has to be if you're going to do it, go out to the market, get a demand signal and say, is it -- would you preorder this? Oh, of the 5,000, I don't only preorder these 1,000. Well, I'm not going to develop the other 4,000. Why would I? Maybe I want to try again and get 2,000 or 3,000.

But you get a demand signal and say, what should I develop? As you get ready to launch, you get another demand signal, what should I launch? After you launch, which products should I replenish? And how should I price them? So this we're calling concurrent commercialization. And some of my customers, for example, said, we have an average markdown of 45%. And they said, well, you should use our price optimization software because we can reduce that.

We already did use it. It used to be 65%. So now we're at 45%. And they say there's 2 reasons. One reason it's not priced right. The other reason is it's the wrong product. So we solved both of these problems, pricing optimization, it's priced right with our recent acquisition and doing our product experience management platform, we can do this concurrent commercialization.

The words that my customers have said about this strategy is it would transform our whole business financially and sustainability-wise. So this is one example of the power of bringing V and R together to transform a business and, in fact, an industry.

All right. I want to talk a little bit about our growth opportunity. We have sized our potential market. And we are currently the market leader by far. We probably have 10x as much revenue as the next -- sorry, as much revenue as the next 10 competitors combined. So we are by far the market leader. And yet, this is early mainstream adoption.

We're at the beginning of the S-curve, the very, very beginning. We're just inside the tornado as I say. And if you look at the penetration, it's only 0.6% penetrated the market we are with our 1,000 customers. So we say 1,000 down, 161,000 to go. This is an unbelievably large opportunity.

Our customers' revenue is about -- the market's revenue is about $28 trillion. If everyone were to buy our software, it would be about $54 billion. There's a room in this market for a $10 billion-plus company, and we intend to be that one.

So why? Why do we win? We have a hire the best philosophy. We always have it, pay what you got to pay, but hire the best no matter what. The best solutions, it's the only configured solution with built-in best practices. And we have -- all of our customers have agreed to be marketing references for us.

So we have thousands of customers and on any given Friday, we measure it, about 95% that day would give us a positive reference, meaning take a reference call, speak of this seminar. We run hundreds of events a year, and our customers sell to our prospects. Okay.

I think next, we'd like to -- I have a customer that I've interviewed. Unfortunately, she's traveling in the Far East right now. So we did record the interview. So if we could play that, I'd appreciate it.

Chris Groves  

So just a couple of final thoughts. So all I wanted to leave you with today really was two thoughts, one, that this is an -- the consumer products is an enormous opportunity for Dassault and for Centric and the strategy of combining the virtual and the real to transform our customers' business resonates with them. And you can see she said, it's not one thing, it's everything. It resonates across the entire chain. So those are the two thoughts I'd like to leave you with.

And now I'd like to -- just on a personal note, so Gian Paolo and I met for the first time when we were both Silicon Valley start-ups. He was a founder of his and I was the founder of mine. He needed some office space. We had access because we kind of got ambitious. And so we decided to share the same office space. We didn't even put up walls, and we cohabited for 3 years. And so -- and we got very close to understanding their business and they got close to understanding ours. And what I learned about Gian Paolo is he's absolutely a world-class innovator. And I'm not just saying that because he's standing in front of me, but it's true. And over time, he also became a world-class businessman, which surprised me even more.

Gian Bassi   Executive VP of 3DEXPERIENCE Works organization

Well, the two things are not compatible?

Chris Groves  

No.

Gian Bassi   Executive VP of 3DEXPERIENCE Works organization

Fair enough.

Chris Groves  

And I find it very -- it's like karma that here we are again under the same innovation roof, but it's a global roof called Dassault Systèmes. And so I think we've both found the right home.

Gian Bassi   Executive VP of 3DEXPERIENCE Works organization

I guess so, yes, thank you, and congratulations. Okay. Good day, everybody, and thank you for coming to the Capital Market Day. Today, I want to present SOLIDWORKS and the incredible opportunity that we have in the mainstream business, an area where volume and velocity are absolutely must.

Now this year, we celebrated the 30th anniversary of the first release of SOLIDWORKS, and there is a lot to celebrate. Today, we have more than 8 million users from student makers all the way into enterprise engineer. We have sold more than 1.4 million of commercial seats to more than 285,000 commercial clients. All of this, thanks to -- also to the development of a world-class distribution system called customer role experience with more than 450 resellers in 120 countries all over the world.

In 30 years, we have established a very strong market footprint with about 44% of commercial cut seats share in 2024. Our revenues come primarily from industrial equipment, medical services, high-tech and in other high-growth areas like AC infrastructure and cities and home and lifestyle, the opportunities are enormous, and we just started the work.

And last year, we reached -- actually, we surpassed the EUR 1.1 billion revenues. But our ambition is actually to accelerate what we have done so far because we have now expanded the SOLIDWORKS offer way beyond the traditional space of design, and now our mainstream portfolio includes simulation, PLM and manufacturing solutions, thanks to the integration with the 3DEXPERIENCE platform and all the brands of Dassault Systèmes that bring us to an addressable market of about USD 20 billion.

Even more following the announcement of the 3 UNIV+RSES in February in Dallas, in actually Houston, we have seen an increasing interest in joining our distributor ecosystem, which is already happening. Now let's now talk about the competitive advantage that we have now to win in this $20 billion market, and what are the growth drivers that we strongly believe allows us to accelerate our revenues.

So the first growth driver is what I like to call our secret sauce for success, which is the passion and enthusiasm of our large community that amplifies by word of mouth and through social media, our message, and despite thousands of initial adopters of our solutions, student makers, start-ups are the most important constituency because they are the workforce of the future.

Students know that SOLIDWORKS certification will open for them a strong career in engineering. And just check for yourself on LinkedIn, what is the most sought-after skill in the marketplace today. And I want to show you one of these amazing start-ups. This is Endiatx, okay? They have invented a pill, a robotic pill that customers, actually patients can put in their stomach, can swallow actually, and they can be navigated by the doctors, and they can have a high resolution view of your stomach and intestine. This is going to avoid completely intrusive practices otherwise.

And the inventor, the founder of Endiatx and the inventor of Pillbox is now becoming an expert user of simulation and of governance and advanced simulation, thanks to the training that they are receiving in our Fab Lab in the 3DEXPERIENCE lab. Now I want to talk about another growth driver and is very, very important. And we call it the power of the platform.

With the wider portfolio that we have now, thanks to the seamless integration of SOLIDWORKS with the 3DEXPERIENCE platform, the power of 3DEXPERIENCE in the cloud can be delivered to SOLIDWORKS users new and existing and extending our offer to PLM, simulation and manufacturing beyond CAD with the right packaging and pricing for mainstream.

We call it the SOLIDWORKS portfolio for mainstream, and it is the key to address the $20 billion market that I talked about. And let me show you MagLev. This is one of the clients that takes the full power of mod sim and advanced simulation. As you can see, this company, Maglev is called Maglev Aero is Boston-based. It's a start-up that aims to revolutionize urban air mobility with a proprietary hyperdrive electrical propulsion system that is based on magnetic levitation.

With this technology, they want to deliver a frictionless, ultra-quite efficient and safe flight. I have another one, speaking of the wider portfolio. This is in manufacturing. Metal Works is a contract manufacturing in Lincoln, Nebraska. They have 6 facilities where they adopted our robot programming standard offers. Isn't this a beautiful view of Virtual+Real, right?

You have seen before the virtual version and the real version. They can now program nearly 30 robots across all facilities remotely even from home without stopping production. And this is the last example that I want to bring you, this is my favorite one because with this portfolio, we can now win more effectively in our competitor landscape.

In fact, Lynred, this is a leader in sensing computing, they specialize in infrared technology. They have more than 1,000 employees worldwide, and they are investing for expansion. But they found the point solutions did not cut the need that they had. And that is why they replaced their entire Autodesk installed base with SOLIDWORKS and the 3DEXPERIENCE platform.

Now I want to talk about the third and the most consequential growth driver that we have. And it is, of course, related to the launch by the Asèem at 3DEXPERIENCE World in February of 3D UNIV+RSES where AI is at the center of an unprecedented increase of productivity and the know-how at a time where our customers, believe me, needed the most. Virtual companions are going to play an increasing role in how humans interact with technology in a wide array of functions from natural language integration to sophisticated task like generating drawings automatically or according to specific standards and guidelines. As a matter of fact, I want to show you my favorite application and probably one of the most significant productivity enhancer, which is the automatic creation of drawings that you see demonstrated here in this video are delivered on the cloud.

This alone can generate multimillion value opportunities. If you consider the cost of design documentation for contractor and manufacturing documents that are necessary. What took hours or days in the past now takes minutes literally. I think that the 3D universities are really unleashing the power of innovation for my sector, for the mainstream sector.

Now I want to talk about the fourth growth driver. So it's go-to-market has always relied since the beginning on the ecosystem of our partner and sellers, 450 of them, as I said. And for the largest part of our 30 years, they have thrived by selling perpetual licenses and support. But with the decision to go all in with the 3DEXPERIENCE platform, we are transforming our channel to succeed in a SaaS-first world. And now they are building new teams with skills and profiles that match today's buyers like technical prowess, digital first. And very importantly, we are expanding and increasing the agility of our ecosystem, and we have recently launched a program to engage new entrepreneurial teams that want to start a reseller business with us to explore new business model in new sectors, new territories and are hungry for new customer acquisitions. We call these initiatives the Red Velocity Partner program.

And now I want to introduce to you one of the best examples of the new lineage of partners. And I'm pleased to invite on stage, Stephen and Anna Wierenga of SWYFT Solutions. Please come on the stage.

Gian Bassi   Executive VP of 3DEXPERIENCE Works organization

Stephen and Anna, thank you very much for joining us today. I would like to start by asking the 2 of you, what inspired you to build a business around engineering software? And what led you to the transition from being a customer because you were a customer, you are -- to becoming a partner.

Stephen Wierenga  

Yes. Thank you. Thanks for letting us be here. I began actually using SOLIDWORKS in college, but I gained more experience during internships in manufacturing. Early on in my career, I can remember designing products for manufacturing, sending them out to the manufacturing floor and them saying, "Hey, we can't actually make this." These real-world lessons taught me about manufacturing constraints, and it was important for my understanding of how things are actually built.

During that time, I also saw that companies often needed dependable engineering support, which is why I started my own contract design business, Perception Engineering in 2013. Initially, our focus was flexible engineering support, and SOLIDWORKS actually became our key solution. But a real turning point came to us in 2018 when we had the opportunity to get involved in a lighthouse program for the 3DEXPERIENCE platform. Right away, I saw the impact of improved collaboration and communication in my company.

Anna Wierenga  

When we got the opportunity to become Dassault Systèmes' partner, we knew it was something we wanted to say yes to. We had firsthand experience of the value of the SOLIDWORKS tools and partnering allowed us to significantly scale the ways that we could impact and support companies.

Stephen Wierenga  

Exactly. We became partners believing true success is actually about helping others succeed. SWYFT Solutions actually stands for start with your future today. And our goal is to help businesses leverage the right technology effectively and future-proof their operations.

Gian Bassi   Executive VP of 3DEXPERIENCE Works organization

So what were some of the early challenges you faced starting as a reseller? And how did you overcome those challenges?

Stephen Wierenga  

Yes. Our biggest initial challenge was really pivoting from hands-on engineering to business consulting. We built new marketing and sales strategies, which word of mouth was no longer enough for. And we actually designed a clear customer success journey for proper growth. We also had to educate SOLIDWORKS community on the benefits of the 3DEXPERIENCE platform and the cloud, which we actually achieved by actively listening and demonstrating their combined value.

Anna Wierenga  

Another significant opportunity has been our participation in the SOLIDWORKS Online Store. It makes it easier for customers to buy the tools they need online, which matches how people prefer to shop now. This helps us compete better and lowers the cost of acquiring new customers.

Gian Bassi   Executive VP of 3DEXPERIENCE Works organization

Yes. I'm glad you mentioned online is our latest improvement, and that is very successful. Thank you also to your participation. Now, how does your experience as a former customer shape the way how you support your clients today?

Stephen Wierenga  

Yes. Our direct experience as users deeply influences how we support our clients. We understand the common frustrations companies face such as inefficient file sharing and poor internal communication and recognize the traditional methods no longer are effective. These insights fuel our customer-first approach. We collaborate with clients to resolve their daily challenges, leveraging our knowledge of effective solutions to help them improve their processes.

Gian Bassi   Executive VP of 3DEXPERIENCE Works organization

Okay. So moving forward, what do you see the major opportunities for growth for SWYFT Solutions?

Stephen Wierenga  

Yes. We are very excited to expand with Dassault Systèmes, and I believe that our greatest growth opportunity lies in continuing our focus on helping businesses envision and embrace a better future. Many companies remain stuck in just outdated processes simply because they feel familiar. Our mission is to clearly demonstrate the benefits of change. By leveraging the resources available within the 3DEXPERIENCE platform, we can now enable teams to focus on high-value activities, staying lean, agile and responsive to the evolving future economy.

Anna Wierenga  

Yes. Our entire team is passionate and excited to continue learning and educating new clients about the platform and to expand our impact beyond SOLIDWORKS. By leveraging integrated simulation and manufacturing solutions, we know that our clients can quickly address additional pain points across their teams, and that will significantly boost the productivity and operational efficiency.

Gian Bassi   Executive VP of 3DEXPERIENCE Works organization

So thank you, Stephen and Anna. We are really proud of you. Thank you for your passion and your contribution to our ecosystem and your family. Thank you very much.

Stephen Wierenga  

Thank you.

Gian Bassi   Executive VP of 3DEXPERIENCE Works organization

This was the picture with the family. Look at the beautiful family. This is our ecosystem.

So to conclude -- yes, work force of the future, everyone is there, right? To conclude, the SOLIDWORKS mainstream business has the ambition, the market and the plan to accelerate our revenues. You can see here the 4 growth drivers that I have presented today that combined and with the pivotal push of the 3D universities, will help us achieve a sustained acceleration of our growth.

Thank you very much for your attention.

Now I think is -- Rouven, okay.

Pascal Daloz   CEO & Director

Okay. all right. A lot of success -- hands are up. I can see that. I would like -- we have microphones. First of all, I want to make sure I locate where the microphone is. Maybe Mo, if you want to start with your first question. You can bring the microphone over here. Can you come? Do you want to help me with that?

Mohammed Moawalla   Goldman Sachs Group, Inc.

Great. First question was, obviously, I appreciate the kind of added color, particularly on the kind of the financials and also the kind of the road map. But if we start maybe just to kind of reconcile on the outlook, please, Rouven, the kind of 7% to 8% versus the 10% before. Can you also help us understand how you're thinking on the Life Science business is changing within that? Do you still anticipate this to be a sort of double-digit grower as per your kind of previous guidance? And then secondly, in terms of the sort of the subscription annual kind of recurring revenue growth going forward, is that something we have to wait until sort of next year to get? Or can you give us a flavor of the trajectory of how that's perhaps been evolving more recently?

Rouven Bergmann   CFO & Executive VP

Thank you, Mo, for the opening questions. So yes, the 7% to 8% compares to the 10% previously. For Life Sciences, I have not given growth rates for each one of the categories as that's, I guess, motivates your question. As you see, for Life Sciences, we are repositioning Medidata. We are creating huge differentiation and customer success to build our run rate. In fact, we are performing well with our large enterprise clients in the mid-market. And as we discussed, the current pressure we have comes from the volume business. So once that volume business is starting to level out that impact, we will see Medidata to be back to mid- to high single digit and on its path to double-digit growth if we combine the new growth lever that we articulated from lab to manufacturing, which is a big market for us to enter. So the health of the business is very strong. There's no reason why it shouldn't be growing double digit. But right now, it's not, and that's what we are fixing.

So I don't know, Pascal, do you want to add something? Or should I go to the second question?

So to the second question, you remember more when we spoke during Q4 earnings when we talked about the guidance for 2025. I think you were the one who asked the question about the visibility. And I shared with everyone that we have mid-80s of visibility forward-looking to cover the growth with subscriptions. So I started to introduce that KPI already to help you understand how much visibility we have to hit our subscription growth number, and we'll continue to do that. And I think we will -- of course, I think we will -- what I also want to do is to sit down to have a special meeting or session with you to walk you through the new disclosures in more detail that you have an opportunity to ask questions before we then release it into our earnings, which we plan to do beginning of 2026. But qualitatively, I will support you through 2025 to transition to that.

Mohammed Moawalla   Goldman Sachs Group, Inc.

Great. And maybe one for Pascal. The company has been through kind of several product cycles. I mean, 3DX, it seems like we're still a long way to go, even though the product has been out. You're already talking about sort of 3D UNIV+RSES. How do you think about the sort of time scale between each product cycle and the customer adoption? And what sort of gives you the confidence that kind of -- I know you talked about sort of the AI is now going to be the catalyst around the cloud adoption. But what gives you the confidence that some of the numbers you're talking about on 3D, you can be kind of realized in this time frame?

Pascal Daloz   CEO & Director

A few things, Mo. I think 3D UNIV+RSES is a little bit different compared to what we did in previous one. Because as you noticed, we call it a new generation. We are not calling this a new version. And there is a big difference between a generation and version. Why so? Because it rely on 3DEXPERIENCE platform. The 3DEXPERIENCE platform has been introduced in 2012. This is true. It takes a certain time to basically create the footprint. But now we see definitively the acceleration. I think you have seen the numbers. Most of the growth is coming from this. So we have built the foundation, at least for sure, with the large enterprises, with the direct sales. This is really where, I mean, we have a significant footprint. And on top of this, cloud and AI are coming. There is nothing more to do except basically to adopt what we already have.

So which is very different compared to what we used to do when you deploy the platform where you have to basically do the migration, you have to foster the adoption, you have to change many practices. You have to integrate with many legacy systems here, it's already ready. This is the reason why it's very different from the nature of what we do. The second thing, I think there is still a challenge you have seen for the indirect. And I know it's probably a question will come. So I preempt the question. So if you look at the vast majority of the growth of the Dassault Systèmes for the last probably 2 to 3 years is coming from the direct sales.

And you have seen it's the benefit of the last transaction we signed, the deployment of the 3DEXPERIENCE platform with all the multiplier effect Rouven was mentioning. You have to remember that we acquired the IBM sales force a little bit more than a decade ago. And that was the primary focus for us to ensure that we were building a sales force capable to tackle and to address all the different domain and expertise of all the different industry we want to serve. It's not yet the case with the partner. So it's -- and we have some partner with us. So they know it. That's the reason why we have new generation of partners also because they are bringing a different mindset, a different way to approach the market, a different specialization.

And this is really -- and you have my commitment that this topic is extremely high in my agenda, and we will make the necessary transformations to do almost what we did in the direct force with the indirect. The time has come to do it. And you will see the direct is already growing at double digit. That's not where the problem is coming from. We should do much better with the indirect because right now, it's growing at low single digit, not at high double digit. So if you combine the 2, I think I'm pretty convinced that fixing the indirect to be in the capacity to basically cover everything we do in a much better way, including the cloud and adding on top the magic of the AI, we will make it.

We will really make it. We already have some experiences with some customers on the AI. I mean that's the reason why Rouven, when he made this computation, he is not completely blind. He has a foundation of certain negotiations going on or also certain discussion we have. The 10th-time-x I was mentioning this moonshot is real. I mean it's not a marketing statement we do. We have measured it in several cases, including in industry where we were not expecting this possible because we were convinced it was already well equipped. It was already well used. They already have the practices goes with it, but this is not the truth. The reality, this AI, the virtual companions, the generative experience is revealing the fact that what we are pushing for the last 40 years is not yet fully adopted.

And the main reasons behind this is the skills of the people. That's the only reason. The skill of the people and the difficulty for them to change. The virtual companions, and Elisa has been very explicit about this, it's time to knowledge guys. It's the best way to speed basically the knowledge of the people to adopt the latest practices without knowing them. That's point number one. And point number two, you have maybe noticed it. The virtual companions, they can basically collaborate together, which is also a way to redefine the methods and the practices across the entire company. That's something which is extremely important to accelerate the adoption. The second thing is for a long time, we were spending our life to integrate the platform in the IT environment of the customers, right? What we do right now is the opposite way. It's cloud. So there is no need anymore to spend life to integrate with all the different systems.

We still have some to do, but it's extremely normalized with the web services. However, we need to integrate the knowledge and the know-how of our customers within the platform. And in the demonstration, you have seen the millions of pages, the book of knowledge, which most of these are papers, we have built a factory to absorb it at the speed of life without having to spend our life to do the customization. So that's the reason why in the levers Rouven was mentioning, we believe the 3D UNIV+RSES is really a way to accelerate the adoption of the platform and to accelerate the cloud adoption because it makes it easy, magic performance and when I say also it defined a new possible. And those are not marketing words or marketing bull****. And I have a lot of respect for the marketing people. So -- but it's tangible. Sorry for my long answer, but I think you can probably attest my conviction on this.

Rouven Bergmann   CFO & Executive VP

Do we want to go to Adam next quickly.

Adam Wood   Morgan Stanley

I wanted to go into a couple of things on go-to-market to start off with. I think when you talk about doing virtual twins and the product, we all understand why you've got a right to win in that space. But with the 3D UNIV+RSES, when you start talking about going into the digital twin of the organization and the business model of these companies, you start to get into areas that other enterprise software companies would claim they have a much bigger voice of the customer. They've got very entrenched market positions. You talk about workforce, you talk about supply chain. et cetera, et cetera. Could you just talk a little bit about from a sales point of view, how you go into these companies, maybe a little bit outside of the traditional domains and compete there and how you think you've got the right to win against those competitors in those spaces?

And maybe recently, we've been hearing from some of the other enterprise software companies around the complexity of getting the corporates to adopt AI, and they've been pushing more on a more consultative sales approach, hiring consultants and using that in that role. Is that one of the ways that you could drive this and you can change? And then if I could just on cash, for Rouven, the cash flow has obviously been running a little bit behind where it's traditionally been for Dassault over the last few years. Could you just help us understand, is that better terms for customers that you've been giving? And as we get to the end or certainly to a much later stage of the subscription process transition, why the ambition is 85%, 90% and not maybe closer to the 100% that we see a lot of the other European software companies operating at.

Pascal Daloz   CEO & Director

Thank you, Adam, for your questions. Let's say this way. If you look at all the people in this competitive space, I mean, the software to enable the performance of the organization, they are not connected with the rest. They're not connecting with the products or the experiences. They're not connecting with the production systems. They are not connecting with the supply chain. So all of them, they pretend, they are bringing agility. But you cannot -- because at the end, the agility is coming from the fact that you are introducing innovation in your company, most of the time through the offer, and you need to structure the organization accordingly.

It starts from this. I want to remind you that one of the largest manufacturing company on earth, Toyota, they do not have an ERP system. They do not have an ERP system. And believe me, they do not consider that this kind of software is the one who are bringing them the flexibility and the agility. However, they have rebuilt a kind of ERP systems to manage specifically the performance of the organizations on the top of the platform. So why I'm saying this? Because we are already channeling this. Maybe, Elisa, if you want to say a few words because you have been involved on the Renault case. And Renault when they did their transformation, they build the virtual twin of the organizations in order to lead the change management. So I don't know if you want to say.

Elisa Prisner   Executive VP of Industry, Marketing & Sustainability, Corporate Strategy & Platform Transformation

This is also why I showed you earlier why we were focusing on these end products that are the key values to our customers. If you consider these end products at the center of the company, it cannot be disconnected from the way the company needs to organize itself to produce and to create and to operate, having the direct impact on their top line at the end. So this is why we are talking also about regenerative companies. You've seen that we've moved from the product economy to the experience economy now to the generative economy. This implies changes in the way companies organize themselves as well. So this is why we are building those 3 shifts together as a multiplicative force. If we cannot stick. We cannot be prisoner of current methods. Otherwise, we will lose the speed and the agility to be able to readapt and to gain what we expected and target the right value.

Pascal Daloz   CEO & Director

Now the question was also related to the go-to-market. We have -- and you remember, we spoke many times about this. We have what we call the value engagement, and it's a consultative type of selling. Remember, what we have in the platform is the knowledge and the know-how. If you do not put people in front of our customers who are knowledgeable, I mean it doesn't work. You cannot pretend what you are putting into the platform is the knowledge and the know-how. The only thing you can pretend is basically you do transactions, we have to do for sure. So we have this value engagement system in place, and it works relatively well with the direct sales. It's not yet in place with the indirect as simple as that. So that's the reason why I'm maybe repeating myself, but we have to bring different partners having different skills, different specializations, probably less competent on the IT, probably much more on the industry we serve, on the type of domain expertise they need to have in order to be a spine partner and a trusted partner with all the customers we want to serve.

So this is really where we have still a lot of work to do. My last comment, believe it or not, but the large engineering firms are becoming extremely important for us because most of them, they do work on behalf of many of our customers. And they are the one if they are fully equipped with our systems, they are becoming a little bit like Chris was saying, Chris was telling us or telling you, the customer are selling for us. So we could imagine at a point where the engineering services company by completing the job on behalf of their customers will become the way to foster and accelerate the adoption of what we do. So those are really, again, very high on my agenda and the team, which is here, including Mr. Laufer, is spending his life on this topic.

Philippe Laufer   Executive VP of 3DS Global Brands

Just want to add something. Don't forget, I hope you know that we're not selling applications. We are selling roles. And when you enter in a company like Renault, the first question that we ask to those companies is to do the engineering, how many roles, how many people in each role do we have? And when they map it to our whole portfolio, they start to think about transformation. So already there, we are planting the seed to go in this consultative selling, which implies to reengineer the way they are associating the roles and even what each individual in the company is doing.

Rouven Bergmann   CFO & Executive VP

Okay. So I go to the last question because I don't want to forget your question on cash flow. I like the challenge, Adam. We are -- I shared with you our path to reach 50% cloud share. And the way we have modeled that, I think we will be at the 90s and I think as we move forward, of course, we have the potential to convert more. But I think even at this point in time where we convert mid-80s, our business is extremely healthy. Cash is not a limitation for us to operate, to invest. We now really are focused on making -- taking advantage of this unique moment in time, convert our business to much higher ratable share in cloud, and this gives us so much more potential to grow. And that's the path in which we're on. I think, Frederic, you were trying as well. We have maybe time for 2 more questions, 2 more. Yes. The problem is the shuttle.

Frederic Boulan   BofA Securities

Fred at Bank of America. I'll keep it short.

Rouven Bergmann   CFO & Executive VP

Yes.

Frederic Boulan   BofA Securities

So on the -- so revenue guidance, it's clear. So you have about 9% to 10% if we combine the foundation, the additional EUR 1 billion. Any more detail when we look at the EPS in terms of margin assumptions, other P&L items? And on the capital allocation question, I mean, are there other options in the absence of M&A in terms of how you manage that cap structure in terms of potential cash returns to shareholders? And then just on the revenue side in terms of phasing. So 3D UNIV+RSES is very promising, but you just launched it back in February. So is this something that will come towards the end of the plan? Or we should already start to see some contribution in the beginning?

Rouven Bergmann   CFO & Executive VP

Yes. Okay. I'll try to go through it fast. To the first part, you saw on the slide, there were assumptions around operating income and margin expansion, take that into consideration. So we see gradual margin expansion over the years. There's no reason why the margin shouldn't be healthy. Related to tax, we are assuming the tax rate to be at around 20%. That's the assumption for the next years. In terms of financial income, of course, it's dependent on rate environment, Frederic, and it's depending on the cash on the balance sheet depending on the use of cash.

To the use of cash to this part, our focus is to rethink our M&A and investment strategy in the context of 3D UNIV+RSES, how we are imagining our world in the context of 3D UNIV+RSES and V+R and expand through that and conquer that field also through focused M&A. That is something we're committed to do. And we have the balance sheet to do that, and the highest priority use of cash flow as it relates to growth investment. Of course, we will invest into organic growth. that we have been doing all the time, and we will continue to do that also over the next years to expand our presence in geos through office spaces because this is where our people and clients are coming together. We do not believe to become a remote company to save cost. That doesn't work in our business.

Pascal Daloz   CEO & Director

And the last question was related to...

Rouven Bergmann   CFO & Executive VP

The ramp-up.

Pascal Daloz   CEO & Director

The ramp-up.

Rouven Bergmann   CFO & Executive VP

Yes, so the ramp-up, I think we will -- we are now in 2025. When we guide to 2026, I think we will have probably the first way to look at that. 2025, I don't see that it's -- I don't want to quantify that in 2025. But clearly, we are ramping up into the years I would say, starting 2026, '27, '28, '29. But as you saw today, the message to you is the strategy is an execution. Customers are implementing it. And we are going from an enter to reference to replicate very fast. And maybe, Florence, you can if you want to say a few words because you are coming this year on the market with virtual companions, with generative experiences. I mean you do not have to wait 5 years before to see something.

Florence Hu-Aubigny   Executive VP of Research & Development

Yes. So what you should know is that we have already started to deliver generative experience with our 2025x FD(01). So at the beginning of this year, the first virtual companions will be available very soon because in FD(06) it's 3 weeks from now. So we have a plan and we execute it. So virtual companion generative experiences, virtual experiences will be delivered. It has already started, and it will be the case in the next functional deliveries.

Rouven Bergmann   CFO & Executive VP

So one more question. Jay? Yes. And if we have a quick one, we can squeeze maybe in one more, but you have to be quick, Jay.

Pascal Daloz   CEO & Director

The pressure is on you, Jay.

Jay Vleeschhouwer   Griffin Securities, Inc.

You ask too much. All right. Pascal, you acknowledged a few moments ago that Gen 7 is not per se an underlying new architecture. It's -- as you said on a conference call a couple of quarters ago, it's more about collection or combination of your products. The technical question, therefore, is how do you think about the longevity or extensibility of the current architecture, particularly horizontally across your functions, vertically across your various markets? And then secondly, speaking of your markets, we can stipulate your positioning for manufacturing and life sciences. It remains unclear, however, what your ambition is or what you think your positioning could be for infrastructure and cities.

Pascal Daloz   CEO & Director

Okay. So the first question was longevity, yes, yes. So remember, the platform has been designed to be cloud-based and to be data-centric since day 1. Day 1. We started this work. It has been introduced in 2012. But the reality, we started a long time ago to architect it. Why I'm saying this? Because 10 years ago, we already had in mind that we were asking our customers to do 2 choices at the same time, adopt the platform and move to a new generation, which is V6. It's 2 choices they have to do at the same time. So we know -- we knew that at that time, it will be extremely important to have a longevity, which is probably a little bit longer for the platform than usually what we do because this choice for the platform is something you do almost every 20 years. Volkswagen, you have seen when we were discussing with them, they ask us to do the business case for 30 years. This is the stickiness of what we do. And the platform, the choice they are making right now, believe me, it's a minimum for the 20 years.

So that's really the reason why it was extremely important for us to architect the life cycle of the different pieces with a different approach. The second question was related to life sciences, right? No, the architecture and.

Rouven Bergmann   CFO & Executive VP

Construction and architecture.

Pascal Daloz   CEO & Director

The way we do it, that is the way maybe you notice it, we do not take this market through the traditional definition of architecture and construction. We are approached by the -- what we call the end objects, nuclear plants, bridges, data centers, just to name a few. And that's the way we go. And if you look at basically each time we select one object, it took us 1 or 2 years to really take and build the leadership on this. So Elisa and Elisa's teams, what they are doing, they have analyzed this market, and they have spot all the most promising and objects where we have to focus because they are the one usually combining a huge -- next level of complexity in the way to do things. So that's the way to approach and to build our leadership into this space. Maybe you can claim it's taking time, and I will accept the remark.

But being a long-term company, I think it's important first to make the change in this market which has not changed for the last 20 years. It's by far the sector which is far behind the others. And if you look at basically the value proposal of many of our competitors, still the same. They are still the same. The platform is a way for us to disrupt this market. The problem if you come the same way we are doing for the others, it's a little bit different because this market is extremely fragmented. The big difference between life sciences, aerospace, auto sectors or industrial equipment in a way for the large one, it's extremely verticalized and concentrated. Here, it's very -- I mean, spread and addressing the platform approach without having a strict focus on subsegmenting the market, it's not something you can do in an easy way. So the go-to-market is really against where if we have probably to continue to invest is on this.

Rouven Bergmann   CFO & Executive VP

Okay. I think we are -- we should conclude here.

Pascal Daloz   CEO & Director

Okay.

Rouven Bergmann   CFO & Executive VP

Thank you. Thanks.

Pascal Daloz   CEO & Director

So thank you, Rouven. Thank you for the Q&A. But before we leave, I think thank you. I would like to invite with me our Executive Chairman. And I made this comment last night, he is more executive than chairman. But nevertheless, I think it's important for you, Bernard, to speak as well.

Bernard Charles   Executive Chairman

I initially said no to Pascal. I said this is not my job to really make any comments after the CMD. So I am -- in fact, Pascal to make a comment as a Chairman first. I had the joy to be creating this company, starting with 10 people with only EUR 1 million investment at the beginning with a top Chairman, Founder, Charlie Edelstenne. We changed the world. We changed the world of aerospace. We changed the world of mobility. We are changing the world of life science. And we are changing the world of the energy by finding new ways to build those extremely complex system called nuclear plants on other systems. So nobody can deny it, unlike critical system like ERP and so on, they have not changed the world at all. They have tuned the world, but they have not changed the world.

This is important for this company. It's important for the founder. It's important for me. It's important for all of us. We're going to change the full industry too. Today, the odds to die if you are in good health at the age of 50 is on a curve, if you would have the curve in front of you, it's like this with the risk on the events at the top, you have 3 risks: oncology, vascular and you don't know the third one. Medical practices error. That's at the top here. Midway on the curve for developed countries. Midway. You're in good health, 50 years old, you come back home and you die on your sofa. It's statistics. That is the case. This is the midpoint of the curve. Of course, far lower, you take a train before you take your car to go to job, to work and the train at the lowest level, at the lowest ever level, you're going to take a flight from Paris to New York. We contributed to change that world, not aerospace only. So the purpose that we have that we are going to apply to food and health is on the same line.

For all of you selling or being an investor, always remember that to understand what we do. We never accept to comply with an IT road map. I will tell you that the 3 categories of tech companies, the one doing disease for the society, and I could name them, but I will not because it's recorded. The one which are useless, but getting your money, in the middle, and the one having an impact to improve the world we live in. That's Dassault Systèmes. Whether you like it or not, this is what we do. So be aware, this is what we're going to do between now and 2050, we have obsession. And that's why you have seen those customers today. It's a choice for investors, but we have the luxury to be a controlled company with a very stable family, I am a shareholder, Charlie is a shareholder, and we control the company. So we are not going to bend on rules which does not fit with our purpose. So when Elisa Prisner-Levyne made the decision, you know what, we are not going to accept to do only virtual twin for products.

We're going to do virtual twin for organization because we are doing knowledge management, and we're going to do virtual twin for business model. And to do so and to justify that, we are going to select the end product we want to focus on. We are not going to select the sector or the slice of the software. We are going to select the end product that our dear customers consider that if we provide them well to the society, the society will have a higher quality of life. So in the last 5 years with Pascal with the new brand team where you see 50% of them are top women. They understand life better than math. Believe me, on all aspects. This is why they are empowered in our company. It's not an accident. It's not a question of parity. It's because we believe they are going to make us different. That's Pascal choice. He told me, please help me to grow them. We will put them in power, and you have seen a few of them today.

So we have a purpose. We have selected the end product. So if you ask me a question about construction, construction is a scandal in the world today, the lowest productivity industry in the world. We cannot even provide good quality housing to students almost in all developed countries. Do you think this is acceptable? It is not. Obesity, lack of good food, look at this. So we find amazing therapeutics for oncology and for things, and we screw up with lack of good quality of food. So the life expectation in America is going down, the richest country in the world, come on. So we don't want to be in the bad. We don't want to be in the middle. We are going to be in the good. I'm tired with investors saying, I want companies who have a strong purpose and then they invest in the most stupid companies creating disease for the people. So I am sharing that with passion with you because it is the identity of Dassault Systèmes.

You will never in the future, be able to map us in the current software framework because we are taking our purpose, we are selecting our end products, and we are saying we are going to do everything for those companies, these customers that we love so much. So we will do the safest, cleanest airplane, the most high-quality, sustainable mobility for the world. The best therapeutics, the best medical practices, the best medical equipment, the best hospital flows for people. That's the new Dassault Systèmes. It's a big dream. And it's at first getting the people with us who share those values and wants to make it happen. That's why my buddy here is the boss. I selected him after 20 years of working together. And when you have in this stupid annual report, investors looking at the values, the paragraph of -- on all the statement that companies are doing instead of looking at their impact, I think it's wrong.

So be aware, this is the company of the future and my mission after Sir Dassault, Charlie Edelstenne, my mission in the next 20 years if health is there, please help me to be in good health. I got the agreement from my wife. That was the most important thing. Congratulations to you both, it's good. You are doing the good thing to really do everything to protect this company to do the right thing for the society. That's why Dassault Systèmes is not like any other company. And there is not so many companies in the world having this clarity about what we do. So pick your investment choice. But please at least be fair with us to communicate to your investors that this is the company they are going to invest because it's very clear about what we want to do for the future. Sorry, Pascal, I wanted to say a few words. I was not planning to do it. You asked me to do it, so I'm doing it. Your conclusion is probably the most important one. Thank you very much.

Pascal Daloz   CEO & Director

Anyway, I think, Bernard, you made the conclusions because the conclusion is really, we are building a long-term company, and I think your commitments because it's more than a speech, it's a commitment is much better than any else we can do. So thank you again. This is concluding. We are right on time, 5:30, so you would be on time to take the shuttle. Thank you for the one who have made a long trip and for the one being connected. I hope to see you at least no later than Q2, right, which is in a few weeks from now. And Rouven and the team will be on the road for the investor conferences and the road shows. So thank you so much, and see you soon.