7 CONTENTS Person responsible 3 1 Presentation of the Group 5 5 Corporate governance 183 1.1 Profi le of Dassault Systèmes, 5.1 The Board’s Corporate Governance Report 184 the 3DEXPERIENCE Company 6 5.2 Internal Control Procedures and Risk Management 214 1.2 Financial Summary: A Long History of Sustainable 5.3 Transactions in Dassault Systèmes shares Growth in Revenues, Cash Flow and Dividends 12 by the Management of the Company 218 1.3 History 14 5.4 Statutory Auditors 220 1.4 Group Organization 19 5.5 Declarations regarding the administrative Bodies 1.5 Business Activities 20 and Senior Management 221 1.6 Research and Development 39 1.7 Risk factors 40 Information about 6 Dassault Systèmes SE, the share capital Social, Societal and Environmental and the ownership structure 223 2 Responsibility 49 6.1 Information about Dassault Systèmes SE 224 2.1 Social and Societal Responsibility 50 6.2 Information about the Share Capital 228 2.2 Environmental Responsibility 70 6.3 Information about the Shareholders 231 2.3 Vigilance Plan 83 6.4 Stock Market Information 236 2.4 Independent Verifi er’s Report on Consolidated Social, Environmental and Societal Information Presented in the Management Report 84 General Meeting 237 2.5 Statutory Auditors’ Attestation on the information 7 relating to the Dassault Systèmes SE’s total amount 7.1 Presentation of the resolutions proposed paid for sponsorship 87 by the Board of Directors to the General Meeting on May 22, 2018 238 7.2 Draft resolutions proposed by the Board of Directors 3 Financial Review and prospects 89 to the General Meeting on May 22, 2018 246 3.1 Operating and Financial Review 90 3.2 Financial Objectives 104 Cross-reference tables 253 3.3 Interim and Other Financial Information 105 4 Financial Statements 107 4.1 Consolidated Financial Statements 108 4.2 Parent Company Financial Statements 153 4.3 Legal and Arbitration Proceedings 182 ANNUAL REPORT 2017 ANNUAL FINANCIAL REPORT This document is an English-language translation of Dassault Systèmes’ Document de référence (Annual Report), which was filed with the AMF (French Financial Markets Authority) on March 21 , 2018, in accordance with Articles 212-13 of the AMF General Regulation. DASSAULT SYSTÈMES ANNUAL REPORT 2017 1 Only the French version of the Document de référence is legally binding GENERAL This Annual Report also includes: In compliance with Article 28 of European Regulation no. 809/2004 of the Commission, the following information } the annual financial report to be prepared and published by is incorporated by reference in this Annual Report: every listed company within four months of the end of its fiscal year, pursuant to Article L. 451-1-2 of the Monetary } the consolidated financial statements on pages 92 to 130 and Financial Code and Article 222-3 of the French Financial (inclusive), the parent company financial statements on Markets Authority (“AMF”) General Regulation; and pages 133 to 155 (inclusive), and the related audit reports on pages 131 to 132 and 156 to 159 (inclusive) of the Annual } the annual management report of Dassault Systèmes SE’s Report (Document de référence) for the year 2016 filed Board of Directors, which must be provided to the with the AMF on March 22, 2017, under no. D. 17.0207; General Meeting of Shareholders approving the financial statements for each completed fiscal year, pursuant to } the financial information on pages 78 to 90 (inclusive) of Articles L. 225-100 et seq. of the French Commercial Code. the Annual Report (Document de référence) for the year 2016 filed with the AMF on March 22, 2017, under no. The index set forth on pages 253 and 254 provides cross- D. 17.0207; references to the relevant portions of these two reports. } the consolidated financial statements on pages 86 to 121 All references to “euro” or to the symbol “€” refer to the legal (inclusive), the parent company financial statements on currency of the French Republic and certain countries of the pages 124 to 145 (inclusive), and the related audit reports on European Union. All references to the “U.S. dollar” or to the pages 122 to 123 and, 146 to 149 (inclusive) of the Annual symbol “$” refer to the legal currency of the United States. Report (Document de référence) for the year 2015 filed As used herein, “Dassault Systèmes”, the “Company” or the with the AMF on March 23, 2016, under no. D. 16-0197; “Group” refers to Dassault Systèmes SE and all the companies } the financial information on pages 72 to 84 (inclusive) of included in the scope of consolidation. the Annual Report (Document de référence) for the year “Dassault Systèmes SE” refers only to the European parent 2015 filed with the AMF on March 23, 2016, under no. company of the Group, which is governed by French law. D. 16-0197. The portions of these documents which are not incorporated herein are either not relevant for current investors, or are covered in another section of this Annual Report. 2 ANNUAL REPORT 2017 DASSAULT SYSTÈMES PERSON RESPONSIBLE Person Responsible for the Annual Report Bernard Charlès – Vice-Chairman and Chief Executive Officer. Certification by the Person Responsible for the Annual Report Vélizy-Villacoublay, March 21 , 2018. I hereby certify, after having taken all reasonable measures I have received a completion letter (lettre de fin de travaux) from for this purpose, that the information contained in this Annual the auditors stating that they have verified the information Report (Document de référence) is, to my knowledge, in regarding the financial situation and the financial statements accordance with the facts and that no information liable to included in this Annual Report and that they have read this affect its significance has been omitted. document in its entirety. I certify that, to my knowledge, the financial statements Bernard Charlès have been prepared in accordance with applicable accounting Vice-Chairman and Chief Executive Officer standards and give a faithful representation of the assets, financial situation and results of Dassault Systèmes SE and all the companies included in the scope of consolidation, and that the “management report” the content of which is cross- referenced in a table at page 254 , included in this Annual Report, presents a faithful representation of the business trends, results and financial situation of Dassault Systèmes SE and all the companies included in the scope of consolidation as well as a description of the principal risks and uncertainties which they face. DASSAULT SYSTÈMES ANNUAL REPORT 2017 3 4 ANNUAL REPORT 2017 DASSAULT SYSTÈMES 1 PRESENTATION OF THE GROUP CONTENTS 1.1 Profile of Dassault Systèmes, 1.5 Business Activities 20 the 3DEXPERIENCE Company 6 1.5.1 Principal Activities 20 1.5.2 Dassault Systèmes’ offering 24 1.2 Financial Summary: A Long 1.5.3 Material Contracts 38 History of Sustainable Growth in Revenues, Cash Flow and Dividends 12 1.6 Research and Development 39 1.6.1 Overview 39 1.3 History 14 1.6.2 Intellectual Property 39 1.3.1 History and Development of the Company 14 1.3.2 Investments 17 1.7 Risk factors 40 1.7.1 Risks Related to the Company’s Business 40 1.4 Group Organization 19 1.7.2 Financial and Market Risks 47 1.4.1 Dassault Systèmes SE’s Position within the Group 19 1.7.3 Insurance 48 1.4.2 Principal Subsidiaries of the Company 19 DASSAULT SYSTÈMES ANNUAL REPORT 2017 5 Presentation of the Group 1 Profi le of Dassault Systèmes, the 3DEXPERIENCE Company 1.1 Profile of Dassault Systèmes, the 3DEXPERIENCE Company After delivering many advances in software products aimed at furniture in rooms, and experience them in a virtual reality designing in 3D and managing the resultant products across experience; their lives, we believe there is a new world to imagine, create } Industry is about creating the knowledge and know-how and build by leveraging science, engineering and art and by needed to ensure that our solutions match closely the taking advantage of the significant technological advances to needs of the industries we address. We see with large reduce the distance between the Virtual World and the Real clients a strong focus on deep transformations to adapt to World. This led us, in 2012 to define our new Horizon which we the respective challenges of their industries. Furthermore, call 3DEXPERIENCE with the mission to provide business and in all these industries, new entrants have appeared with people with 3DEXPERIENCE universes to imagine sustainable small teams focusing on sub-segments of those markets innovations capable of harmonizing product, nature and life. and proposing high-value experiences with products. Our Our software portfolio spans a wide spectrum of domains solutions appeal to industry leaders and startups, both of from modelling and scientific simulation to manufacturing whom are shaking up industries; production and logistics optimization, and is applicable from Natural Resources to Cities, Transportation, Buildings, Smart } Experiences: Being able to model experiences is truly the Products, Consumer Goods, all the way to biological systems, manner in which companies can innovate and create new chemistry and material sciences. categories of products and solutions that will drive new, better experiences for their consumers. Our work with We were honored to have Dassault Systèmes ranked #1 Cities, with 3DEXPERIENCity, demonstrate that we are among the 2018 Top 100 Most Sustainable Corporations by able to do this at the most demanding level thanks to the Corporate Knights for our vision and for implementing this 3DEXPERIENCE platform enabling the modeling of city vision in everything that we do. Empowering industry and experiences to improve the lives of citizens. people to create 3DEXPERIENCE universes to imagine, invent, Our mission and strategy reflect five major 21st century and deliver disruptive solutions that advance sustainability in trends that are having a widespread influence on industries, domains as large as energy, mobility of the future, cities, life governments, research and education: sciences and high-tech is at the core of our purpose and DNA and why people are joining Dassault Systèmes.