French software company Dassault Systemes cut its 2024 revenue growth forecast for the second time in four months on Thursday, citing the slowdown in the global automotive industry.
The group, which sells its software to carmakers, aircraft manufacturers and industrial companies, now sees 2024 total revenue growth in the range of five per cent to seven per cent, compared to its earlier forecast of between six per cent and eight per cent.
It reiterated the annual outlook for diluted earnings per share growth at eight per cent to 11per cent.
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Its shares were down 1.4 per cent at 0754 GMT.
The macroeconomic environment has worsened since Dassault Systemes last cut its forecasts in July, further impacting on its key end-markets.
The automotive sector is struggling, marked by recent profit warnings from carmakers such as Stellantis and Volkswagen, while key players in the aerospace industry face production challenges and delivery delays.
Dassault Systemes, one of France’s leading IT groups, said its third-quarter revenue grew four per cent to 4.46 billion euros ($4.81 billion), boosted by eight per cent growth in subscription revenue.
The group’s automotive customers in Europe and the U.S. were impacted by a contraction in volumes in the late summer, weighing on its growth prospects, CEO Pascal Daloz said in the statement.
He added that momentum in Asia, and China in particular, had remained strong, with its software revenue growing nine per cent in the region in the third quarter.
Jefferies analysts said in a note that the results were “disappointing, though not entirely unexpected”.
They also noted Dassault’s larger peers like Siemens and Schneider Electric were actively pursuing strategic acquisitions that could significantly alter the competitive dynamics in the industry.
This puts pressure on Dassault Systemes that faces the challenge of either entering costly bidding wars or potentially losing vital market opportunities, neither of which “feels optimal” for it, they said.
($1 = 0.9268 euros)
(Reporting by Anna Peverieri in Gdansk; editing by Milla Nissi)
