DASSAULT SYSTEMES REPORTS 22% INCREASE IN SECOND QUARTER 2000 REVENUE

SolidWorks Revenue Up 59% and PDM Revenue up 64

Paris, France, July 20, 2000--Dassault Systèmes (Nasdaq: DASTY; Bourse de Paris), a worldwide leading software developer of product lifecycle management (PLM) solutions, today announced financial results for the 2000 second quarter.

Acquisition costs include goodwill and technology amortization and other related acquisition costs. All financial figures in this press release are before these acquisition costs unless otherwise noted.

Total revenue increased 22% to Euro 145.8 million in the 2000 second quarter, compared to Euro 119.1 million in the 1999 second quarter. Software license revenue grew 24% to Euro 126.0 million and represented 86% of total revenue

Operating income increased 14% in the 2000 second quarter to Euro 45.9 million. The operating margin was 31.5% in the 2000 second quarter.

For the 2000 second quarter, net income increased 16% to Euro 29.7 million, compared to Euro 25.7 million in the year-ago period. On a per share basis net income increased 9% to Euro 0.25 per share in the 2000 second quarter, up from Euro 0.23 per share in the 1999 second quarter.

Charles Edelstenne, Chairman and Chief Executive Officer of Dassault Systèmes, commented, “We are very pleased with our across-the-board success for the quarter. We saw growth in every geographic region. Sales results for Asia were particularly noteworthy, increasing 70%. SolidWorks had an outstanding quarter with revenues up 59% and our PDM results were equally impressive with sales growth of 64%.”

Bernard Charles, President, said, “Our results for the quarter validate Dassault’s position at the forefront of our industry and our leadership in introducing innovations that set the standard of performance for product lifecycle management. With the availability of CATIA Version 5 Release 4, CATIA Solutions Version 4 Release 2.3, and ENOVIA Portfolio 2, we further strengthened the Company’s technological and industry leadership. By consolidating Deneb, DELTA and SAFEWORK under our new e-Manufacturing brand, DELMIA, we became the world’s premier digital manufacturing provider. We were also pleased that Gartner named ENOVIA a new leader in the PDM Magic Quadrant vendor matrix and lauded ENOVIA as ‘an Enterprise Leader with the Ability to Execute and Completeness of Vision.’ The strength of our research team’s innovative product development is further highlighted by SolidWork’s 2000 introduction and the strong reception for SmarTeam’s version 4.0 release.”

For the six months ended June 30, 2000, total revenue increased 21% to Euro 280.5 million, compared to Euro 231.7 million in the respective 1999 period. Operating income totaled Euro 90.3 million in the 2000 six-month period, representing an increase of 9% in comparison to Euro 82.8 million in the year-ago period. For the first half of 2000, net income rose 13% to Euro 59.2 million, or Euro 0.50 per share, compared to Euro 52.2 million, or Euro 0.46 per share in the 1999 first half .

Recurring software revenue represented 44% of total software revenue in the 2000 second quarter and 45% for the first six months of 2000. During the 2000 second quarter 7,075 CATIA and 5,300 SolidWorks seats were licensed. Year-to-date, 14,500 CATIA and 10,079 SolidWorks seats have been licensed.

Thibault de Tersant, Executive Vice President, noted, “Recurring revenue continues to be an excellent indicator of Dassault’s strength and demonstrates that our business model is working across all of the Company’s product lines. Equally noteworthy is the level of CATIA V5 sales we achieved during the quarter. These accounted for 20% of total unit volume for CATIA during the quarter.”

Services and other revenue increased 11% in the 2000 second quarter. Services and other revenue represented 13.6% of total revenue, compared to 14.9% in the year-ago period.

Mr. Charles concluded, “To continue our record of advancements, we took several important steps toward our goal of leadership in 3D. We announced important alliances with CADAM Systems Company (CSC), Japan’s leading supplier of 2D mechanical CAD/CAM systems, and with Mentor Graphics. Under the first agreement, CSC decided to immediately adopt CATIA V5 as the successor to its Helix solutions. Under the Mentor Graphics alliance, our companies will partner to develop an integrated V5 Electronic/Mechanical Design Solution that will accelerate the end-to-end development cycle of complex electro-mechanical systems. At the same time, with the acquisition of the 3D software component business of Spatial, the Company firmly established its leadership in 3D modeling, Internet and visualization technologies. This move strongly supports our vision of the future of Dassault Systèmes and our commitment to promoting ‘3D everywhere, any time and for everyone.’”

Highlights of the Quarter

During the quarter, Dassault Systèmes announced the general availability of:

CATIA Version 5 Release 4 for Windows and UNIX, which offers a wide range of integrated e-business solutions, including 12 new products and 39 enhanced ones across CATIA platforms P1 and P2. This latest version enables small, medium and large companies to integrate Product Lifecycle Management in their strategic business processes and provides users with twice as many products and capabilities as all previously announced CATIA products.

CATIA Solutions Version 4 Release 2.3, which delivers improved process coverage in product design and manufacturing and improved customer competitiveness and productivity. Its capabilities make it easy for users to integrate CATIA Version 5 supplemental functions with their current processes, and to preserve their Version 4 legacy data during their future transition to CATIA Version 5.

ENOVIA Portfolio 2, a set of new and enhanced product lifecycle management solutions, that support e-business throughout the digital enterprise. ENOVIA Portfolio 2 enables small and large companies to increase innovation, optimize product lifecycle costs, and address new markets with evolving business models.

The Company signed an agreement to acquire the 3D software components business of Spatial, which will become part of a new wholly owned subsidiary of Dassault Systèmes. Spatial will represent the foundation of Dassault Systèmes’ new Technology Company. It will leverage both the current expertise of Spatial in 3D components for solid modeling with its flagship ACIS® 3D geometrical modeler, visualization, and interoperability with its 3D data translation and healing tools and services, and the technological excellence of the Dassault Systèmes group in 3D technologies.

Dassault Systèmes announced the creation of DELMIA, a new brand for e-Manufacturing that consolidates the Deneb, DELTA and SAFEWORK brands and provides the manufacturing community with e-solutions to create, monitor and control agile, distributed manufacturing systems geared towards build-to-order and Lean Manufacturing and production. DELMIA will serve industry segments where continuous transformation and optimization of the manufacturing process are critical, such as automotive, aerospace, fabrication & assembly, electrical & electronics, consumer goods, plant and shipbuilding.

CADAM Systems Company (CSC) announced an alliance with IBM and Dassault Systèmes under which CSC becomes an IBM CATIA Version 5 Business Partner, IBM service provider and Dassault Systèmes CATIA** V5 strategic development partner. CSC is adopting the CATIA V5 Applications Architecture open platform to develop specialized applications and add-ons for MICRO CADAM Helix customers based in Japan and will be associated in the definition of future CATIA V5 products.

Design & Reuse and Dassault Systèmes announced their intent to establish a strategic alliance to deliver and extend current Design & Reuse IP solutions taking full advantage of ENOVIA enterprise PLM solutions & infrastructure. The alliance reinforces Design & Reuse’s B2B leadership position in IP (intellectual property or virtual electronic components) commerce and leverages Dassault Systèmes' ENOVIA Solutions for Product Lifecycle Management (PLM).

Dassault Systèmes announced that Philips Semiconductors is implementing ENOVIAPM** to manage product data in conjunction with the company’s Semiconductor Product Information Network project, a database that comprises 150,000 items related to 32,000 products. Through this project, all organizations within Philips Semiconductors can request real-time bills of materials for any product 24 hours a day, 7 days a week, from any company location. Using ENOVIAPM to manage the data ensures that all product information is error-free. The initial agreement represents 40 ENOVIAPM seats, as well as IBM services and training.

Mitsubishi Motors Corporation announced its selection of ENOVIAvpm product lifecycle management solutions for implementing complete digital design in the development of all new Mitsubishi passenger cars, trucks and buses. ENOVIAvpm will be the company’s exclusive configured digital mock-up system for product engineering.