By Anna Peverieri
(Reuters) -French software company Dassault Systemes on Thursday cut its 2024 sales growth forecast for the second time in four months, citing the slowdown in the global auto industry.
The group, which sells its software to automakers, aircraft manufacturers and industrial companies, now sees total revenue growth of 5% to 7% for 2024, up from its previous forecast of between 6% and 8%.
It reiterated annual guidance for diluted earnings per share growth of 8% to 11%.
Shares were down 1.4% at 0754 GMT.
The macroeconomic environment has deteriorated since Dassault Systemes last cut its forecasts in July, further impacting key end markets.
The automotive sector is struggling, marked by recent profit warnings from automakers such as Stellantis and Volkswagen, while key players in the aerospace industry are facing production issues and delivery delays.
Dassault Systemes, one of France’s leading IT groups, said third-quarter revenue grew 4% to 4.46 billion euros ($4.81 billion), boosted by 8% growth in subscription revenue.
The group’s automotive customers in Europe and the US were hit by a contraction in volumes in late summer, which dampened growth prospects, CEO Pascal Daloz said in the statement.
He added that momentum in Asia, and particularly China, had remained strong, with software revenues in the region growing 9% in the third quarter.
Jefferies analysts said in a note that the results were “disappointing, but not entirely unexpected.”
They also noted that Dassault’s larger competitors, such as Siemens and Schneider Electric, are actively pursuing strategic acquisitions that could significantly change the competitive dynamics in the industry.
This puts pressure on Dassault Systemes, which faces the challenge of either entering into costly bidding wars or potentially losing vital market opportunities. Neither feels “optimal” for that, they said.
($1 = 0.9268 euros)
(Reporting by Anna Peverieri in Gdansk; Editing by Milla Nissi)
