Pair Trade: Long SAP - Short Dassault Systèmes Tuesday, October 30th 2012Companies Description Investment Case SAP (SAP GY) Q3 2012 software license came ahead of consensus. SAP’s three innovation growth drivers (HANA, Mobile and cloud) showed a good perfor- mance. Quarterly results seem to demonstrate progress in its new product areas, particularly in the cloud. Within software, Q3 weakness in EMEA was offset by Americas. The company raised its 2012 SSRS revenue growth guidan- ce by 50bps to the range 10.5% to 12.5% (including contribution from Success- Factors and Ariba). SAP continues to build backlog at a significant pace. SAP will host its European user event SAPPHIRE in Spain on November 13-16th.Market Price Data Higher market multiples could be justified if the company can generate valueSAP (SAP GY) through cross-selling core products with new products into its large installedLast Price (€) 56.030 base. The recent acquisition of Ariba is expected to unlock revenue synergies.YTD Change 38.27% Key risks are related to technology and product cycles.Mkt Cap (€ bn) 68.861Dassault Systèmes (DSY FP) Dassault Systèmes (DSY FP) Q3 results came at the top of consensus earningsLast Price (€) 82.050 expectations, but the topline growth seems to be slowing. Management gui-YTD Change 32.50% ded towards a further slowdown in Q4, probably reflecting tougher macroMkt Cap (€ bn) 10.274 headwinds, mainly in Europe. Near-term, the company could have some pro-Source: Bloomberg duct cycle headwinds that it needs to manage (e.g. the SolidWorks 2013 relea- se cycle with new functionalities). As a consequence, growth rates acrossAnalyst Recommendations some if its products could be volatile over the next few quarters. Nevertheless, Dassault Systèmes is a high-quality, well positioned company in SAP (SAP GY) Sells Holds the software sector. It’s got an above-average cash generation ability and a defensive revenue mix. New acquisitions could also support earnings. Buys Sells The SAP (SAP GY) / Dassault Systèmes (DSY GY) ratio has a current value of Systèmes Dassault (DSY FP) Holds 0.683. We will define as our targets 0.714 (+4.6%) and 0.736 (+7.8%). 0.66 will be used as our stop-loss level (-3.4%). Buys 0% 20% 40% 60% 80% Technical Comment(Source: Bloomberg)Market Multiples Ticker P/E 2013 EPS 2011/13 DY 2013 (Bloomberg) Est. CAGR Est. Est.SAP GY 15.87 11.6% 1.70%DSY FP 21.33 15.2% 1.11%Source: BloombergNext Report Date & Events FT 2012 Jan. 23rd,SAP GY Results 2013 Q4 2012DSY FP Results Feb. 7th, 2013Source: Companies web sitewww.fincor.ptwww.facebook.com/FincorAnnouncement: Fincor—Sociedade Corretora, S.A. provides services of reception, execution, and transmission of orders. The contents men-tioned in this document do not constitute (nor should they be interpreted as to form) any kind of counselling, or investment recommendation, or arecord of our trading prices, or an offer or solicitation to trade in any financial instrument. Fincor—Sociedade Corretora, S.A. Will not accept anyresponsibility resulting from any use referring to said content or about any resulting effect that could have occurred.