Financing Information
Maintaining a High Level of Cash Flow from Operating Activities
Dassault Systèmes Capital Allocation
We focus our uses of cash on:
- Repayment of financial debt;
- Share repurchases to minimize share dilution from stock-based employee performance programs;
- Capital returns to shareholders in the form of dividends;
- Select acquisitions undertaken consistent with our Mission, Strategy and Addressable Market expansion objectives.
For the year ended December 31st, 2022, cash flow from operations totaled €1.5 billion, a decrease of 5%, relative to the same period last year. This is a result of an increase in accounts receivables on relatively high invoicing in the fourth quarter and of tax cash flow differences resulting from the mandatory capitalization of R&D expenses for tax purposes in the USA. Cash from operations was principally used for debt repayment, net of proceeds for €886 million, treasury shares buy-back and employee shareholding plan net of proceeds from stock options exercise for €379 million, and cash dividend payments for €224 million.
Maintaining Significant Financial Flexibility with a High Level of Liquidity
The evolution of our cash and net financial position reflects the acquisition of Medidata Solutions, Inc. on October 28, 2019. The cash purchase price was paid with Bonds in the amount of €3.0 billion, a term loan, drawn in Euro and US dollar, in an aggregate amount of €1.0 billion, and with cash on hand, in Euro and US dollar, in an aggregate amount of €1.1 billion.
Our net financial debt at December 31, 2022 decreased by €662 million to €227 million, compared to €889 million at December 31, 2021, reflecting cash, cash equivalents and short-term investments of €2.769 billion and debt related to borrowings of €2.996 billion at December 31, 2022.
Our adjusted net debt /IFRS EBITDAO ratio stood at 0.4x at December 31, 2022, compared to 0.8x at December 31, 2021, based on an adjusted net debt including the lease liabilities as reported under IFRS 16 of €581 million and an IFRS EBITDAO of €2,080 million.
Corporate Rating
On April 26, 2022, Standard & Poor’s Global Ratings upgraded their rating to “A” with a stable outlook for Dassault Systèmes SE and its long term credit.
|
Agency |
Date |
Long term |
Outlook |
Short term |
Business risk profile |
| S&P | April 26, 2022 | A | Stable | -- | Strong |
|
S&P |
August 27th, 2019 |
A- |
Stable |
-- |
Strong |
N.B : for the latest S&P report on the company please register on https://www.spglobal.com/ratings/en/products-benefits/products/ratings360
Bond Issue Program
We have used the net proceeds of the issue of our inaugural senior unsecured Eurobonds, amounting to approximately €3.65 billion, for general corporate purposes, including the financing in part of the acquisition of Medidata Solutions, Inc. and the refinancing of a €650 million bank loan that was to mature in 2022. We have repaid the first tranche for €900 million, which matured on September 16, 2022.
|
Bond |
Date of issue |
Maturity Date |
Volume (in €m) |
Coupon (Payable Annually) |
|
2024 |
Sept. 16, 2019 |
Sept. 16, 2024 |
700 |
0% |
|
2026 |
Sept. 16, 2019 |
Sept. 16, 2026 |
900 |
0.125% |
|
2029 |
Sept. 16, 2019 |
Sept. 16, 2029 |
1,150 |
0.375% |
Borrowings
|
As of December 31, 2022 |
Payments due by period |
|||
|
in million euros |
Total |
Less than 1 year |
1-5 years |
5-10 years |
|
Bonds |
2,737.3 |
|
1,595.0 |
1,142.4 |
|
Term loan facilities in euro currency |
7.5 |
7.5 |
0.1 |
|
| Commercial Papers | 249.5 | 249.5 | ||
|
Accrued interests |
1.7 |
1.7 |
||
|
TOTAL |
2,996.0 |
258.6 |
1,595.1 |
1,142.4 |
In October 2019, we subscribed to a term loan for €500.0 million bearing interest at Euribor 3 months +0.50% per annum and a term loan for $530.0 million bearing interest at Libor USD 3 months +0.60% per annum. Both loans have a 5-year term.
We have voluntarily redeemed the remaining of the term loans, for €100.0 million on January 28, 2022 and on $150.0 million on February 28, 2022.
In July 2022, the Group launched a program of commercial papers (Negotiable EUropean Commercial Paper - NEU CP) with a maximum outstanding amount, authorized by the Board, of €750.0 million. During 2022, the Group issued €650.0 million with a maximum maturity of three months and reimbursed €400.0 million under this program.
Our financing facilities do not contain covenants linked to changes in the Group’s rating. A lower credit rating would result in an increase (capped) in the margins applicable to the credit facilities; symmetrically, a higher rating would lead to a decrease in the applicable margin (with a floor).
Line of credit
We secured a financing commitment in the form of a revolving line of credit of €750 million for a period of 5 years from October 28, 2019. In May 2020 and May 2021, we exercised our option to extend its term for one year respectively, bringing the new termination date to October 2026. As of December 31st, 2022, the line of credit was not drawn down.