Good morning, everyone. I'm François Bordonado, Dassault Systèmes Investor Relations. From the company, we have Bernard Charlès, our Vice Chairman, Chief Executive Officer, and Pascal Daloz, Chief Operations Officer and Chief Financial Officer. In this very special context, I hope you and your families are keeping safe, and I would like to welcome you to Dassault Systèmes first quarter 2020 webcast presentation meeting. At the end of the presentation, we'll take questions from participants. Later today, we'll also hold a conference call. Dassault Systèmes results are prepared in accordance with IFRS. We adopted IFRS 15 in 2018, and so all comparative information is presented under IFRS 15. In addition, we adopted the new IFRS 16 lease standard as of January 1st, 2019. Most of the financial figures on this conference call are presented on a non-IFRS basis, with revenue growth rates in constant currencies, unless otherwise noted.
For an understanding of the differences between the IFRS and non-IFRS, please see the reconciliation tables included in our press release. Some of the comments we'll make during today's presentation will contain forward-looking statements which could differ materially from actual results. Please refer to our risk factors in our 2019 document, [Non-English content] . Let me now introduce Bernard Charlès.
Thank you, François. Hello to everyone. Of course, this first quarter of 2020 announcement is in a very special context. Half of the world has been frozen in some way and confined. There is a lot to be shared with you. I'm going to share that, of course, with Pascal and provide you with, I think, quite interesting insights about the way we observe the sectors we serve and its implication for the Dassault Systèmes plan for the next quarters and the full year. Above and first of all, before I go through the highlights, I want to really mention that we have been able to, with our people, to really continue the operation globally, thanks to their incredible focus, even though they were all working from home. I will come back on that topic.
Of course, we also associate ourselves with all the research development to find out, ultimately, the proper vaccine for this world challenge. Highlights. The revenue is coming 2.5% below the low-end objective, and you are aware of that. 18 hours after the closing of the quarter, we gave you some insights. I think you appreciated that. The total revenue for Dassault Systèmes is up 17%, excluding the exchange rate effect. The recurring revenue is at a level of 83% of the total revenue, up 30%, excluding exchange rate, with solid renewal and, of course, good Medidata momentum. I would say good or very good momentum for Medidata. We'll come back on this. Operating margin on EPS at the high end of the objective.
Due to the situation, everyone might keep in mind that only six months ago, we invested EUR 6 billion, being convinced that, I think, a new approach to digitalization would be needed, would be beyond documents for the life science market as well as the healthcare system that should adopt technology that has been adopted already for other industries. It happened that with this crisis, this health pandemia, we are, as a consequence of those moves, really on the front line on many aspects. Pascal and I will share with you a few insights about that. First and above all, of course, using the collaborative virtualization to help our clients and partners to continue their business from home. Second, providing a fundamental platform and technology for research and also, of course, clinical trial in multiple aspects.
The third, we are on time, thanks to our team here, for the delivery of the major evolution of our platforms on time. There was not even one week delay. Last point here, related to the very deep purpose that we basically communicated on February 6, 2020, for the next 20 years of our plans. We provided a 10-year visibility, but I think it's a bigger plan. We believe that the virtual world of modeling, simulation, and large data science are going to help the real world being improved and being more sustainable. That's not a light commitment. I believe we are proving it and making it happen. I think you will see today that it's even more real than what people might even think of.
We are updating our financial outlook and providing, because of the complexity, and Pascal will give you a very comprehensive view of that, a framework of thoughts, because it's very difficult to provide one number without having the articulation of the basis of it. Let's start with the business highlights. More than ever, we believe that our belief is having an impact. The virtual world extend and improve the real world. For 40 years, Dassault Systèmes has been making step major breakthrough to help the industry work differently. You are now familiar with the value of digital mockup, the value of life cycle management, the value of the experience economy, where product is not enough, experience is the value, on the decision that we made to make those technology available for life, not only for things. We call this the virtual twin experience of human.
Frankly speaking, despite this pandemic, it providing a very special light on why Dassault Systèmes is Dassault Systèmes, on what we are doing every day. We want to reveal a few essential elements. As you know, we have a comprehensive set of brands on one platform, the Experience platform, which is the collaborative multidiscipline platform. I would like to provide some quick highlights on the impact of BIOVIA, which is about modeling and simulation in the biotech world, on the material science world. The power of simulation to predict. The value of a powerful Medidata platform to improve treatment and practices. On two side notes, but which are important, open innovation those days are becoming critical to bring talents together to provide solutions that were not expected before, and also the education online with the 3DEXPERIENCE education infrastructure.
Briefly, BIOVIA is being used to really refine our understanding about the SARS-CoV-2 on really the phenomenon related to this understanding from the DNA and the behavior of this virus, how it could be mitigated. That's a very real illustration why we invest in science at Dassault Systèmes. I think this acceleration of adoption BIOVIA is real also in our members. The second thing, which is another extreme, which is very different, which is related to the reveal that was done in our cooperation in China on the capacity to really. Now I am on page 12 of the presentation, the capacity to do modular, safe, simulation-based, validated infrastructure and secured hospital. There is a short video of one minute here. Please launch the video.
While the world currently faces the threat of COVID-19, no country has dealt with it longer than China. Earlier this year, facing growing infections and dwindling hospital beds, the Central South Architectural Design Institute Co., Ltd undertook the incredible challenge of erecting multiple makeshift hospitals in a matter of weeks. In addition to the logistical challenge of building a medical facility on such an accelerated deadline, there are significant safety concerns that had to be addressed as well. They needed to engineer an HVAC system that minimized the risk of infection for hospital staff and non-infected patients. The answer was simulation. By working with fluid solutions from SIMULIA, designers were able to test their proposed HVAC systems with multiple ventilation layouts in order to minimize pollution dispersion.
These simulations were performed on individual hospital rooms, as well as on the ventilation flowing out of the facility itself, in order to keep everyone, staff, patients, and the general public, as safe as possible. As a result of this work, the engineers at Central South Architectural Design Institute were able to create functional hospitals that met the needs of the country. In fact, they were so happy with the results, they even sent an official note of thanks to SIMULIA for their contributions to the effort. As the people of the world currently look to minimize their potential exposure to COVID-19, we at Dassault Systèmes SIMULIA are proud to know our technology has made a small but positive impact during this global health crisis.
I hope you could all see in the streaming about this video. For those of you who have been following us in the manufacturing sector, it looks obvious. The reality, when you look at the world today, even advanced hospital were having extreme complexity to just establish confinement area. We believe that this situation is a real catalyst to really change the way virtual twin experience can be used for infrastructure. I think more to come, we announced today a cooperation with a gigantic group in China called Aden. They are providing facility management for sophisticated mission-critical infrastructure, and we have decided to work together to create virtual twin experience of critical infrastructure, so they can be used for construction, manufacturing, operation, and maintenance with smart buildings. The second, of course, important.
The third point that I want on the COVID-19 line is the acceleration of multidimensional trial powered by Medidata. Clearly, the Medidata platform is a unique science-based platform to be empowering almost 60% of the worldwide trial actually going on with COVID-19. We have seen it doubling recently. We are leveraging the AI on the gigantic data from the past clinical trial to help establish synthetic arms so we can improve the speed at which discovering can be done on the quality of clinical trial, including the patient journey. You may have noticed today an announcement, which is not a minor one. It's called myMedidata. This idea is to really continue to make this infrastructure so easy to use by patients themselves that, in fact, the data collection consent on data collection will become something useful for the patient and essential for the organizations which are working on discovery.
That's the meaning of the announcement today. Once again, there are many competitors in this area doing digital documents. We are putting science at the core of what is needed for this industry. I'm always astonished to see some successes of digital document companies, because I think at some point in time, it's going to be absolutely useless and the virtual twin of phenomenon will win, as it did in aerospace, automotive, and other manufacturing sector. Medidata adoption is going extremely well, and thanks to our friend on the team. We feel very well together despite the fact that we have been only together for five months. We continue to win new accounts. With PPD, a big CRO, contract research organization, a very large one, has made the decision to use Medidata clinical trial and also the data science, data analytics, and predictive modeling.
There's a difference between document-based and science-based. You cannot predict with document. You can predict with modeling and simulation. myMedidata, as I shared with you in the announcement today, I'm excited with that. This is the kind of result of working together and convincing the team, the genius of Medidata, that one step further is possible, and myMedidata is one step further. There is a video. I am now on page 16, and there is a video which is 23 seconds. Please run the video. I think it's easier to see the video on the real experience of the product than it is to look at the PowerPoint. I hope you notice the simplicity, the efficiency of such kind of approach.
myMedidata, I think, will be something that is going to be game changer to expand from professional clinical trial to use the infrastructure for more generic therapeutics implementation. Of course, the Experience Lab is open innovation. We continue to support it at our own cost by providing this infrastructure for so many innovators around the world. There are over 100 worldwide projects going on with extremely innovative people to find new solution for mask protection, new solutions for even respirators on medical equipment. Even frugal engineering for countries where the healthcare system is less developed, and they will have to face this pandemia, too, unfortunately. We are working on those topics, and I think the team is highly excited to connect with universities, startups, and so on.
It's the real power of open innovation with experience-based design, production, and using 3D printing and other techniques to really provide those results. You see here several example in simulation, creating new type of low-cost medical equipment, as well as, of course, data intelligence on global collaboration. On the education side, we have created a classroom environment, which is 3DEXPERIENCE-based classroom environment. I think there is a video here, so we are going to launch the classroom video conference right now.
In the challenging current context of having to set up virtual classrooms almost overnight, why not use the 3DEXPERIENCE platform to take complete control of your digital teaching resources? With our ready-to-use solution, you can continue to perform your teaching tasks in a totally connected environment. You can engage directly with your students and easily organize your learning program to meet your immediate needs and long-term goals. Are you ready? Let's get started. Welcome to your dashboard, your workspace for managing your virtual classrooms. To help students feel connected with their classmates, you can use this space to show your school's webcam or even the class photo. You can also include a video presenting the learning program for the week ahead or highlight key points using the notes tool. The My Schedule tab is for you to organize your teaching schedule and share it with your class.
You can include individual and group tasks for your students and monitor in real time their project. In the Resources tab, you can plan each lesson, including all tasks and content. You can access all Dassault Systèmes learning material. Interaction is at the heart of the learning process, so the My Class tab is like your own private social network to share and discuss details with your students, work together, and recreate that sense of togetherness you have in your normal classroom. The conversation feature lets you chat directly with students and share video and audio content, either individually or in groups. The 3D tab gives you the 3D overlay when using SOLIDWORKS and CATIA, for example. Your virtual classroom is ready. Are you?
Experience-based training, I think this is a breakthrough. We are using it for our partners, by the way. We are re-satisfying all our people in the company. Speaking about our people in the company, believe me, I am on page 20, young talents redefine the workforce of the future. It's happening inside Dassault Systèmes too. I was amazed to discover certain cockpits that people have been setting up at home, like the one at the center page here, where this is a friend of one of our colleague in Dallas, in America, Texas. You see how people are setting up cool environment. Some of them are even better than what they have at the office. I think there will be a before and after.
I believe that when it comes to Dassault Systèmes, using the 3DEXPERIENCE platform everywhere, we are removing our CRM, we are removing our HR system, we are removing our supply chain system. We are using one platform, 3D collaboration, to connect all those elements together. It's getting some results. By the way, we are learning how we should sell our own platform in a better way. I want to go back page 21. On this environment, I think customers are also realizing that the answer of integrated collaboration goes beyond just working from home. It's a different new set of practices. Of course, despite the bad and difficult things related to this incredible difficult situation, the pandemia, I believe people are discovering new practices, new ways of working.
We are taking advantage of this to really make sure we can provide to our clients new visibility on how they could do differently at a lower cost and more efficiently. This weekend, we are going to put online our next evolution, major evolution of 3DEXPERIENCE platform. By the way, simply said, we are going to use our own platform as a channel. The platform itself will connect users, companies, and partners in one, what we call infinite loop of continuous relationship. The platform will have integrated marketing element in it. In fact, what are the solutions, the roles, the processes for each industries? You can navigate. Customers will be able to navigate the platform to look at what other industries are doing, what they could learn from other industries, and all this online. There is a snapshot of this on page 23, which looks complex.
Let me tell you, we have done a platform that integrates all traditional dispersed tools and toys that you can find on mobile. Connecting conversation, community, dashboarding, pipeline of ideas, program management, to-do list, 3DEXPERIENCE themselves, video conferences, all in one for $37.5 per user per month. $37.5 per user per month, EUR 37.5 per user per month. You have all of this. Customers are discovering the power of this integration because ideas, people, and data, and processes are all connected, which is not the case of any platform available today on the market. Of course, our goal is to serve our customers first, those doing complex things, but I believe this is really why our platform is now being used for all other activities inside Dassault Systèmes, including replacing this CRM system, the supply chain system. It's also our platform for development.
All our software is under control of this platform, and all the collaborative processes under the control of this platform. So the consequences are significant. To conclude, I want to cover briefly three big sectors of the economy. You have understood now that in life science and healthcare, there is something significant happening, and it's needed, and it's revealed here, and we are focusing on that, on personalized knowledge capitalization, reinventing the value chain, transforming the research, development, clinical trial, and manufacturing, and of course, being able to build the total quality discipline. Celsion adopted Medidata for something specific which is going to be probably a first in the world. They are using Medidata for synthetic control arm. What does it mean? When you do clinical trial, you have two group of patients. One group will get the therapeutics, another group will get nothing. Okay. Water, basically.
Basically, what we think we can do is, based on the data science, we can simulate what we call a virtual arm of comparison, synthetic control arm, and help improve clinical trial by having different kind of comparison. This is a very profound evolution. FDA is involved in that process. They like the approach. Basically, the placebo for one group could also be powered by the comparison to virtual synthetic control arm. We believe that this is the future, and it's essential to improve that sector. Related to infrastructure and city, we have selected the example of the cooperation with Aden. There are many more we need to work on. This sector has been improving slowly in the past 45, 50 years. We believe that modular, applying the manufacturing discipline to construction is still a very valid point.
I am on page 27 with the modular architecture that we are deploying with Aden through this cooperation. In the manufacturing sector, we believe that it will be a before and after, because both supply chain will be restructured and as well as the way the manufacturing processes are working on the supply chain. You see this illustrated in page 28, 29. On page 29, we believe that the supply chain, which are very static in poor ERP systems today, can be much more agile and dynamic with resource reallocation based on the needs, on sensitivity of the geographies or sensitivities of the suppliers involved. On this real-time, we have the technology for that with DELMIA Quintiq. We are demonstrating that it can work in so many sectors, distribution included.
As a conclusion, we spent time on February 6, 2020, to formulate what will be the big plan for Dassault Systèmes for the next 20 years. We gave you some indication for the next 10 years. We had the November meeting in New York for healthcare and where we explain what we are doing in life science. I believe we are really walking the talk more than ever, and we are very proud at Dassault Systèmes to be at the center of what should be improved for healthcare and research in life science. With that, I give the floor to Pascal because he has interesting things to share with you. Pascal, back to you.
Thank you, Bernard. If we go to page 32, and we say a few words about the quarter. First of all, I think this quarter revealed a lot of things of what we have been told to you for almost a few years. Point number one, if you take all Bernard's example he used, no one is having any more doubt on the meaningful things we do, because what we do is critical not only to manage the crisis, you have seen it with Medidata and all the clinical trials, but it's also needed for after the crisis because things will not be the same. The second thing is being able to a certain extent, pre-announce 18 hours after the closing of the quarter, I mean, the commercial closing, not the financial closings. It's a proof point that we are fully operational.
To do so, in fact, we are using 3DEXPERIENCE platform as a way to run our business. I'm sure you understood from Bernard's presentation that we are also using the 3DEXPERIENCE platform as a channel. It's a way for us to engage with customers. It's a way also to engage with our partners. That's the reason why we are fully operational. The last point, the last highlight for the quarter is, I think you have the proof that our business model is resilient. If you look at the P&L, again, taking the revenue, EUR 1,144,000,000, which is 2.5% short compared to the guidance we gave to you. In a pure reporting line, including the currency effect, we are on the guidance. If you zoom, 17% growth for the total software revenue.
As we stated to you, the quarter performance is coming from the license, - 20% compared to our objective, which was flat to -5%.
New license.
The new license. The recurring revenue is on target, with 30% growth compared to the 28%-30% we were targeting. More important, the operating margin is also on target and to a certain extent, on the high end of the target with 29.2%, which is a good demonstration of our ability to react quickly to put the right measure in place to counterbalance the lack of revenue coming from the new license. Last but not least, the EPS is at the high end of the guidance, which is not only the proof that we are managing properly the cost, but also we are keeping our commitments to you guys to be on target on this topic. That's the key highlight for the quarter. We go page 33, if we look at the different sectors, you have different dynamics.
Let's start with the manufacturing industry, which represents 70% of the revenue of Dassault Systèmes. These sectors have been, for us, heavily impacted by mobility and transportations. We had this, to a certain extent, this concern, starting last year with the supply chain. Now we see the OEMs being impacted by the situations. The good news is really coming from the aerospace because unsurprisingly, the aerospace is growing at double-digit for Q1. We do not expect to have the same trend for the rest of the year, but it's a proof again that our model is resilient, and when people are really in a tough time, we are giving to them a way to manage the situations. Consumer packaged goods, retail is also growing at double-digits, which is obviously driven by the consumption, and also the good performance.
It's also highlighting the fact that we made a lot of progress in this space. You remember a few years ago, it was almost anecdotal, and now it's becoming to be critical, in what we do. If you move to the infrastructures and cities representing 10% of the revenue, we are growing at double-digit despite the fact that these sectors have been severely impacted by the crisis. If you take the oil and gas, if you take the constructions, all those sectors are suffering, but we are finding our way. That's my message to you. In life sciences, we are representing 20%. It's the second largest industry after transportation and mobility. We are growing at double-digit with Medidata being right on plan. BIOVIA also growing nicely, especially on the recurrent part of the revenue.
I will come back to some statistics for Medidata afterwards. A good example of the momentum we have in life sciences is Hyundai Pharm. It's a Korean company doing pharmaceutical products, but also health food drinks and so medical equipment's. They have decided to select our solutions, Medidata, to do many things. Not only to manage the, what we call the electronic data capture, which is almost all the data you need to input into the system to do the trial. Also the supply chains, all the targeted source data, but more important also the electronic trial master file. Why I'm saying that is because it's a win against Veeva. As you may know, Veeva is a new player in this field, and the way they usually enter into this space is by targeting the document management, which is so-called the electronic trial master file.
There is a limitation, and this is a proof. People, they want to have only one single source of truth. This documentation has to be generative. There is no way you can manage a single source of truth with documents. The way that it's fully integrated, it's a way to understand how we counterbalance their value proposal and how we are displacing them, even if we are not fighting on a day-to-day. Moving to a next topic, which is related to the infrastructure and cities. Logistics is becoming critical also for us. Bernard stated out clearly because the supply chain management will not be the same. This ability to replan on a constant basis to be dynamic is also new because it's a combination between the modeling and simulation capabilities with the optimizations.
Most of the players are coming from the optimizations, but they do not have the ability to develop the models. When it's normal, it's relatively easy to do, but when you have a crisis, the optimization doesn't work. You need to evaluate a built-in set of scenarios in order to take the decisions. That's what this proof point is about. Going to page 36 and zooming to the different product lines, you will notice that with the new way we are reporting. For all the software related to what we call the industrial innovations, you can see the overall performance for the quarter is -1%, which is strictly in line with the performance of CATIA, and the performance for ENOVIA is -11%. What could we say?
We can say for those two brands, which represent the bulk, clearly, the recurrent revenue is growing extremely well but has been offset by the decrease in new license. Especially, for CATIA and ENOVIA, transportation and mobility still represent a significant part of their revenue. That's where it's coming from. We should notice also that DELMIA is growing at double-digit. Because all this crisis is highlighting the fact that you need to prepare how we're going to restart. You need to do a lot of engineering upfront. That's the reason why, we have a good momentum with DELMIA. Zooming to the life sciences, the + 384%. The point is, Medidata is right on plan, growing at 13%, one, three, which is fully in line with the plan.
We can notice that not only we have a lot of competitive displacement this quarter, but also, we start to achieve a certain critical mass. Now we have 1,500 customers with Medidata. Definitively, we are accelerating in new geo, and later in the presentation, I will give you the example of what we do in China. We start to have the synergy in place to expand the geographic scope with them. Zooming to the mainstream innovations, and in this category, you have several brands, including SOLIDWORKS, Centric PLM, 3DEXPERIENCE. You see that we are growing at 2%. SOLIDWORKS dynamic have been relatively correct compared to the situation, + 3%. If you zoom a little bit, in fact, in the 12 geo we are serving, more than six of them, they were growing on the new license.
The counter-performance is really on the new license, is coming from Asia specifically. The recurrent revenue is still good for SOLIDWORKS, is growing at +6%. Centric PLM has been impacted by the situations because as you may know, in the fashion and luxury goods, China does represent a significant part either of the supply chain or the market, the demands. That's the reason why, in term of new license, they decreased by 20%. We have good reasons to believe that, before the end of the year, it will restart. Zooming to the geo, page 37. Let's start with Asia. If you look at Asia, most of the country has been in lockdown almost starting January, was the case for China as well as Korea. Later in the quarter, we had India and Japan. The growth for the quarter is +7%.
On an organic basis is -1%, which is not so bad compared to the situations. Zooming specifically on China, we saw the last month of the quarter in March, some rebound. It's probably too early to express that it's starting again. We saw rebound in unexpected sectors, which is the transportation and mobility, as well as the high-tech. We have good reasons to believe that the pipe will continue to grow in Asia in the rest of the year. Zooming to Europe, the growth is +2%. On an organic basis is -5%. Europe is almost split in two different parts. The north is on plan, growing on the recurrent part of the revenue, including also the new licenses. The south part of Europe, specifically France, Italy, and Spain, has been heavily impacted by the lockdown.
This is where we saw the majority of the decrease of the new license. Germany was also impacted this quarter. Americas, the growth is 46% for the quarter. Obviously, you have the contribution of Medidata. On an organic basis, the growth is plus four. As I was telling you, we had a good momentum in aerospace this quarter in Americas. If we go to page 38, here is a good example of what we do with Medidata. R&G is one of the largest contract research organization in China. We have been able to expand what we do with them, specifically related to the COVID-19. As you may know, Medidata, they have a significant footprint in the U.S. China and Europe and Asia and Europe still represent, I would not say an untapped market, but a market where they can improve significantly their footprint.
Here you have a proof point that we are gaining momentum into this space. Page 39, zooming to the growth. Clearly, the total revenue and the software revenue growth is fully online, with +19%, +17% on both cases. On an organic side, the organic revenue, whatever it's the total revenue of the software revenue, is -1%, excluding the currency effect. If you split and you go to page 40, if you split the software revenue between the license and the subscription and support, the license organic growth, in fact, is decreasing by -20%. Subscription and support is growing at +30%, and on a pure organic basis, is growing +5%, which is, again, a good demonstration of the solidity and the resilience of the model. Zooming to the services revenue, page 41.
The services revenue is growing at +14%, excluding the currency effects. On an organic side, it's +1%, which is, again, not so bad compared to the fact that many of our customers, they either postpone some of the projects or sometimes they did not open their facilities for our teams, or they did not want to have our teams to work remotely using their information systems. We have developed many new offers in order to counterbalance these situations. We are managing the low utilization rate due to the restrictions. You can see this has an impact on the gross margin, but the gross margin is still positive at 2.9%. Zooming on the operating margin, page 42. As I was telling you, I think I did well during the quarter to take the right measure at the right time in order to deliver on targets.
Here you have the comparisons compared to initially what was the expectation. What you can see is we have been able to improve by half a point, the core. Which basically means we are improving our core activities in term of productivity. The currency effect is having a slight effect. From the dilutions coming from the acquisitions, Medidata did a little bit better compared to the plan. This gave us the ability to offset the counter-performance of Centric PLM and IQMS, because they were slightly below in term of operating margin. Moving to the EPS, page 43. The EPS growth is driven obviously by the top line and especially the recurrent revenue, the good margin, but also, this quarter, a lower tax rate at 24.3%.
Here you have the full effect of the different tax regime, whatever is the new French tax regime for the software or the U.S. one. Also, the fact that for this quarter, we were probably more weighted on Americas in term of the revenue. If you look at the good performance of Medidata combined with the good performance of Americas at large, we had this mix effects, which is explaining the fact that the tax rate is a little bit below than what we were expecting. Moving to the cash flow. The cash flow for the quarter for Q1, is reaching EUR 458 million. Slight decrease compared to last year. I will give you more detail. In fact, it's mainly coming from the DSO.
We have three days additional DSO. The DSO impact is the fact that Medidata, in term of the payment terms, they are much more close to 100 days, which is not the standards at Dassault Systèmes. We will continue to align that practice accordingly to what we do. For the rest, you can see that in term of capital expenditure, we expanded our facilities in India because we are reinforcing our activities in these countries. We also did some share buyback to offset, in fact, when we did the acquisition of Medidata, at the time of the closing, we have convert all their long-term incentive plan with Dassault Systèmes shares. The few weeks before the windows closed for us, in order to do it, we bought some shares in order to cover all the plan for 2020, 2021 and 2022. That's what we can say.
In terms of for the full year, we will probably have some impact on the cash flow. The reason is because we extended the payment terms for the partners. Usually, they are at 30 days, and given the situation, we gave to them 30 additional days until June. It's also a way for direct sales when the customers are coming back to us, we need to renegotiate sometimes the recurrent part of the revenue. We prefer to extend the payment terms rather than to negotiate the maintenance and the subscriptions. Why I'm saying that? For the full year, maybe we could have an impact on the cash flow, which is close to EUR 200 million, which is nothing compared to our ability to generate the cash. I think we are in a good position.
Coming to the dividends, we confirm that we're going to pay our dividend on time at EUR 0.70, which is an increase of 8%. Why so? Because we think we had a good practice we have developed over the year. Remember, the payout for the dividend is only a third of the net income in the IFRS. I think it's a good practice, and this practice is still valuable in this timeframe. Moving to some details of the cash flow. I already commented it, so I do not want to spend too much time. We can jump to the financial objective for 2020. Let's go to page 47. Here, the way we have developed a framework, and the framework is based on one goal, which is easy for you to understand.
We are committed to maintain the EPS level at the same level that it was in 2019. If there is one thing you should remember about what I want to say, is this. Okay? That's our commitment, and you will see for the full year, we are targeting EUR 3.55 EPS on the low end of the guidance, and 3.72% on the high end, which is nothing more being flat or +2%. After, we build the revenue, the top lines. The way we did it is by developing a scenario. This is what I will explain to you right now. The scenario we are seeing is a significant decelerations in Q2. It's not us telling this, it's all the economists. A progressive recovery in Q3 and Q4. What does it mean concretely? Q1 of the new license, we were at -20%.
Q2, we are expecting to be -30%. Q3, we are expecting to be almost close to -20% and do the balance in Q4, which basically means -11%, -12%. This gives you, for the full year, a new license revenue decreasing by between -20% and -17%. If I zoom on the recurrent revenue, the point is the following. We have been able to demonstrate in Q1 the solidity of this recurrent revenue. We have to take into account the fact that we will not have the contribution of the new license at the same level that we were expecting. I factor this into the guidance. The second thing I took into account is the fact that we expect to have additional churn, mainly coming from the mid-size market. I took one point additional churn in my guidance.
That's the reason why we are landing to +26% to +27% FX for the full year. I checked these assumptions related to what happened in 2009. When we had this crisis between 2008 and 2009. To a certain extent, I discover that we are almost on the same patterns. That's the way I did my sanity check. For the savings program, the way I computed it is relatively also easy to understand. The gap in term of revenue coming from the activity is EUR 370 million. If you offset some currency effect, the pure gap will be EUR 340 million. The saving plan has been designed to offset half of the gap. Half is coming from non-related personal cost, and the other half of the saving plan is coming from personal cost.
The half coming from the non-personal cost, the way I did it is I look at the cost structure for 2019, and I said, because I'm keeping the commitment to maintain the EPS level at the same level than 2019, the cost structure should be equivalent to 2019. That's the way I did it. I rebased the budget accordingly. For the personal related costs, the commitment we took is point number one, we will not lay off. There is no reason at this stage to consider this. If the situation is going very bad, maybe we will have to reopen this discussion, but at this stage, there is no reason to do it. Why so? Because we want to keep the capacity we have. As you know, in our sectors, hiring people, training people take times, and it's a lot of investment we are doing.
If we can preserve this investment, it's the best things we can do. Nevertheless, I'm taking some measure. The measure I'm taking is to maintain the same number of people we have end of March for the rest of the year. The way I will manage it is by being very selective on the hiring, and I will, to a certain extent, hire as much as people than the one we are leaving. That's the way I'm going to do it. If you compute those numbers and you go to page 48, you have the impact compared to the previous guidance. For the new license, we are decreasing by 25 points the guidance, being +5% to 10% and now being -20% to -17%.
If you look at the subscription and support, we are decreasing by 1.5 the guidance, moving from 28- 26, 27. On the services side, we are decreasing by 13 points, decreasing from 19% to between 5%-7%. You have, on the slide, the impact related in EUR. Moving to the operating expense, page 49. You have the frameworks I just explained to you. We did almost EUR 35 million saving in Q1, and I going to do EUR 135 million saving for the rest of the year. I already explained my saving plan. If you go to page 50, you have the valuation of the revenue and the EPS. Moving from EUR 4.84 billion- EUR 4.005 billion and EUR 4.055 billion, the new guidance at the revenue level.
On the EPS, moving from EUR 4.15- EUR 4.20 to EUR 3.65- EUR 3.72, which is the new guidance for the EPS. Last slide, which is slide 51, you have the numbers for 2020. I will not comment it again because I already did it. You also have the guidance for Q2. As I was telling you, I'm expecting a decrease of the new license between -28% and -31%. A recurrent revenue, which is consistent with what we saw for a certain extent in Q1. I'm expecting the recurrent revenue to be probably a little bit more impacted H2 due to the lack of new license and probably the churn increasing a little bit. The services revenue being -3% to +6%, depending if we are capable to work differently with some of our customers.
On the operating margin, the operating margin will be between 25% and 26.5%, which leads to an EPS of EUR 0.72- EUR 0.77 for Q2. Before to open the Q&A sessions, a few additional things I would like to share with you. The first one, I will do road show in the coming weeks, and I will participate to many virtual events. We'll have an opportunity to meet virtually and to discuss more in depth these presentations. The second thing is our annual meeting will be behind closed doors, but we will keep the date, and the date is May 26th. Last but not least, we decided to postpone the capital market date. It was initially planned to be mid-June, the 12th.
We came to the conclusion that not only was not probably the best usage of our time, the management time, given the situations, but also I think we will have a much better visibility for the full year. The goal of the capital market day is to make a status on the six-year plan. I think we will be in a much better position to share some analysis and highlight at that time. The new date is in November, and November the 17th. That's the new date for the capital market date. That's it for me. Now we are ready to take the questions.
Thank you, ladies and gentlemen. We will now begin the question and answer session. As a reminder, if you wish to ask a question, please press star and one on your telephone. If you wish to cancel your request, please press the hash sign. Once again, star and one to ask any questions. We will now take our first question, which comes from the line of Adam Wood from Morgan Stanley. Please ask your question, your line is open.
Hi. Good morning, everybody. Thanks for taking the question. Maybe just first of all, I wanted to possibly dig in on the Asian side of things. You've obviously got quite a big business in Asia. It was very helpful to see a little bit about what you're seeing at the end of the quarter. Maybe could you go into a little bit more detail there around how new licenses performed through the quarter, any help on close rates, renewals on recurring, and then particularly over the last few weeks, what you've started to see in those countries as those lockdowns have ended and maybe business is probably not back to normal, but at least is starting to move in that direction. Any help of what we could learn from that in more detail would be really interesting.
Maybe just to dig in on the recurring revenue side. I guess a lot of investors would see the exposure you have particularly to automotive and the auto supply chain, and then possibly also to aero, and feel that only taking one or two points out of the recurring growth is a little ambitious. Maybe could you just go into a little bit more detail there, whether that's comparing to the financial crisis or explaining what you're seeing in those sectors to justify why that's realistic and especially maybe talking about what you're thinking about from a new rental or new subscription business, that would also be useful. Thanks very much.
Thank you, Adam, for the question. Pascal.
Yep. I'm going to take probably the two questions. Bernard, feel free to add what you want. Asia, overall, the new license decreased by - 20%. It was relatively consistent across the different countries. It was less in Japan, if I look at Korea and China, it's also the same. However, the recurrent revenue was strictly in line with our expectations, that's a point which is probably good to notice that when I was stating that the organic growth for the recurrent revenue was at 5% overall, it's relatively consistent from all the different geos, across the different geos. There is no discrepancy, I do not have seen specifically in China, the recurrent being under pressure in Q1, if it is the questions.
Related to the recurrent revenue, the question is, as I was clearly stating, there are a few components. You remember the recurrent revenue is composed by maintenance and support plus subscriptions. The maintenance and support, keep in mind that we renew 40% of the maintenance and support in Q1. We still have 60% to renew for the rest of the year, but we are close to have done half, which is, given the situation, probably not so bad. That's point number one. Point number two, I do not expect to have churn from the large accounts, as I was clearly stating, but I do expect to have some churn on the mid-size market. The same thing we saw in 2028 and 2029, because some of the companies will probably go to bankruptcy, and I need to factor this.
That's the reason why I took an additional point. On the subscriptions, again, the subscription is composed by renewal and growth. The growth will be impacted the same way than the new license. When I give it to you, - 30% in Q2, - 20% in Q3, to a certain extent, you could extrapolate that the subscription will behave the same way. For the renewal, the thinking process, it's exactly the same than the maintenance and support. I do expect to have an additional churn, probably much more spread across the large company and the small one, because subscription, as you may know, it's relatively easy to adjust depending the capacity. I hope you have all the details, Adam.
That's very helpful. Thank you, Pascal.
You're welcome.
Thank you. Your next question comes from the line of Mohammed Moawalla from Goldman Sachs. Please ask your question. The line is open.
Great. Thank you very much. I had two as well. The first one was just on Medidata, and the life sciences business. To what extent have the customer conversations, Bernard, changed versus, say, the initial point when you made the acquisition and sort of, as we've gone through the kind of current crisis? Anything around decision-making cycles, sales cycles that you can kind of comment on? To what degree, from a competitive standpoint, do you feel that you're kind of more differentiated? The second question was, again, more generally on kind of pipeline and visibility. Do you feel that the kind of license assumptions you have made at this stage in terms of that kind of gradual improvement, what are the kind of key risks around it? Is it simply the duration of lockdown?
Do you see some of your manufacturing customers, for example, really being able to go back to kind of decision-making, perhaps as they were a few months ago? Would that not prolong into next year? Thank you.
Thank you, Mo. Hello. Good to talk to you. Maybe I take the first one, Pascal, if you allow me. Related to Dassault Systèmes on Medidata together, I participated to several reviews with the team, with Tarek and Glen, two co-founder of Medidata, and we participated to top executive calls with the sector. A few observation that might be helpful for you. First of all, I think they recognize we collectively now can set the conversation at the executive committee level of those companies. That's clearly a big step. That's the first thing. The why is because very often the clinical trial process is one piece, which is in some way relatively isolated from the overall CEO preoccupation of a big pharma. Because basically you have to think about the pipeline, you have to think about the commercialization, and you have to think about many aspects.
Together we can have a conversation on digital continuity across research, development, lab test, clinical trial, production. That's visible, and in fact, it's visible on the agenda when we have the calls. The broad connection on the reputation of Dassault Systèmes to provide collaborative platform to extremely large companies for years now on addressing extremely complex problems. The second thing is science. Clearly, what differentiates us, Mo, and there's a cost to it, is the fact that we focus on the science aspect. It is illustrated very well in a few things. Of course, on modeling and simulation side, but also in data science with Medidata Acorn AI. We do things for synthetic control arm that no one else can really do, because you cannot do that from documents. That's becoming visible.
Of course, it takes time for these executive committees to make up their mind about how to evolve with their digital roadmap, but I think we are changing the game of the thought process. Synthetic control arm is
Was new, was going on when we acquired Medidata, and I think together we are really concentrating on that. On the last point, myMedidata, the announcement today, that's part of the result of an intense, passionate conversation between the teams. Really, they love each other. The people love each other, and they know that if we make it so easy, because the statistics for clinical trial, for other medication, other therapeutics, than the COVID-19 situation, patient acquisition is becoming a massive problem for all the industry sector. In fact, it's a problem also for the healthcare system because, as you know, many people having other disease, like in oncology sector or heart vascular, have basically reduced the contact with the medical sector and exposing their own life.
Clearly, the statistics shows that the patient acquisition is becoming something which is critical and which will expose the sector longer term if they don't adopt the kind of platform we have. I think that's the framework, analytics platforms continuity and the breakthrough of synthetic control arm, because I believe that this is quite important. Related to the second question about the key parameters for the restart. Pascal, you have a view, but I want to make a few comments because I was talking with manufacturing, really deep manufacturing companies. Clearly, there is a work of work done by companies now to rethink about the supply chain. Of course, it was triggered by the sensitivity of the supply chain related to its critical exposure. Some of the players becoming bankruptcy. At the same time, consolidation will happen in different sectors of manufacturing.
The second thing we think is becoming more visible, and I cannot mention explicitly the case, but I think that there will be new mutualization of production capacity between competitors. In some way, when you are using supply chain, that's what is the factor which is happening. I think this will create the need for what we call manufacturing engineering to accelerate not only the product development process, but the manufacturing engineering, the virtual twin of how you produce and manage. Those topics are back. I was astonished how quickly they could be back on the agenda. Pascal mentioned also the logistic aspect, which is becoming something that needs to evolve because the current infrastructure really, if you think about it, the world is still highly static in some of those big, gigantic sectors. It's set and it's very difficult to reshape it. I think this will change.
There will be a before and an after from that standpoint.
Regarding the pipelines, again, when I computed the number, I do the bottom-up approach, not only a top-down. From a pure bottom-up, we clean up the pipelines, and we took almost one by one all the deals we have. Where we are, we are almost 20% below compared to last year after this review. That's where it's coming from. From a behavior standpoint, what do we see? You are right. Part of the plan is based on the fact that we have some duration for the lockdown, and we expect that at least in these countries between May and June, we'll be able to restart completely. Not fully, but restart. China gave some indications to us.
As I was telling you, the last months, we did some significant deals in China with large accounts in the sector where you were not expecting to have those kind of deals, like transportation and mobility. It comes to me, the question is why so? The why so is relatively easy to understand. To restart, you need to behave, you need to operate in a different way. You need a lot of modeling and simulations to prepare what you're going to do. That's the reason why. To come back to your questions, if I look at the pipe, what has been impacted really it's all the large enterprise deals. All the people engaging large project transformations. Right now the mindset is not yet there. It will come again due to the necessity of the crisis, but the mindset is not there.
Mindset is definitely there to buy some roles, processes in order to optimize, to re-engineer, if you want, what you're going to do. We saw a lot of add-on sales, if you want, on the existing customers or install base. Also new customers is coming to us. My last point to you, Mo, is if you compare to 2028 and 2029, there is a big difference. The big difference is the following, 50% of the revenue of Dassault Systèmes now is coming from industry, which is not automotive and transportation, industrial equipment, and aerospace and defense. The other industry are relatively going well in this environment. That's the three takeaways. The next time, if I look at the pipeline.
That's great. Thank you. Very clear.
Thank you, Mo.
Thank you. Your next question comes from the line of Julian Serafini from Jefferies. Please ask your question. The line is open.
Hi. Thank you. I guess my first question is, you made a comment earlier about the strong growth in the aerospace and defense vertical. I guess, can you give us some more insight into what actually drove that? My assumption is that this shouldn't persist through the rest of 2020, but it would be interesting to hear your take or your outlook for that vertical for the rest of the year.
I think on the defense side, many countries are going to continue to fund significant progress, significant programs, because it will be a way to also sustain the economy, not only the defense aspect, but the innovation. I think this is quite well accepted, in many observations of the economic sector. We are benefiting from that, clearly with the different contracts going on. You remember we continue to expand in the shipbuilding and defense sector. We continue to expand in highly sensitive, specialized equipment, in system engineering for defense. Those are things which will have value also for the civil activity. Difficult to say, to predict per quarter, but the trend is more positive in that sector.
Okay. Thank you.
Pascal?
There is maybe a second topic, and Bernard, you touch it. We will see consolidation in aerospace and defense, and especially in the supply chain. Usually, when consolidation is happening, it's an open door for us, because you need to integrate different systems, and you need to have the synergy, the cost synergy, put in place very rapidly. 3DEXPERIENCE platform is very valuable in this specific context. I do expect the consolidation to trigger new programs for us.
Okay, great. Thank you.
Thank you. Your next question comes from the line of Stacy Pollard from J.P. Morgan. Please ask your question. Your line is open.
Hi. Thank you. Well, for me, just maybe the competitive environment. Are you seeing any competitors struggling? Have you seen any changes at all in terms of pricing in the market or any activities that have been more or less aggressive than in the past? A second, just a question on the cloud. Do you think COVID-19 will accelerate the uptake of your cloud offerings? Maybe you can remind us, what percentage of revenues, what you'd like to achieve, and where you're going with that.
Thank you, Stacy. I know you are following us carefully. Thank you, by the way, for that. On competitors' behavior, briefly, first of all, because the reprofiling of the company on the recent moves that you are very aware of in the last six months, we are also learning from our side the new landscape for the competitive landscape. We are having an increased clarity about how we should proceed to basically win. Pascal mentioned several wins, which were, for example, when it comes to Medidata, significant wins on Medidata against Veeva, to name them. In the other aspect of the landscape, I think it's too early to say, but as we are announcing a major evolution of the product portfolio with the cloud platform, which is part of your second question that I will let Pascal address.
I think we communicated at the 3DEXPERIENCE World that the evolution of SOLIDWORKS is with a package which is fully connected to the cloud. It's happening mid-year of this year, where basically the license enablement of the SOLIDWORKS desktop on services will be done, mainly and only from the cloud. We believe that, for $37.5, we can have a better collaborative environment than Dropbox, Slack, and WhatsApp. It's more secure, more integrated, we need to make it visible to the market. To make it visible to the market, this is the approach, making it mainstream. That's at this point in time. I think July will be better, Stacy, to give you more insight about the other trends. Nothing special on that aspect at this point in time.
Just to add two things. As you know, I'm not disclosing the revenue coming from the cloud, and not because I want to hide it. It's because take the example of SOLIDWORKS. What do we do? We are connecting the desktop install base with 3DEXPERIENCE platform on the cloud. The question is, how do I need to account this? From a pure accounting standpoint, that's a little bit tricky. But to a certain extent, you have the strategic thinking behind. The second thing, which is also key to notice, is in these specific environments, many partners cannot visit their customers anymore because they cannot travel. They, like us, have to do it remotely. More and more, they are using 3DEXPERIENCE as a channel to make it happen.
As you may know, you remember what I told you, the opportunity for us is now to have the partners promoting 3DEXPERIENCE platform, and especially on the cloud, because the vast majority of the revenue coming from 3DEXPERIENCE platform is still coming from the direct sales. This timeframe is appropriate to make these transformations, because this is definitively the solution. It's the only way to do it, and no one is arguing about potentially what could be the impact on my compensation, on my revenue plan, on the way I will manage my cash flow, because if they're not selling something, they will not have any cash flow. That's probably one of the opportunity for us in this timeframe, is to accelerate these transformations through the indirect sales. There are partners, by the way, who are really fully aligned.
I'm thinking about one that I usually would avoid to name them to not make too much accounts, but I think TECHNIA, for example, in your north, they are really fully in for the cloud.
Just kind of putting on that question about any pricing discounts or concessions being requested by customers, or do you feel pretty secure in your situation?
Point number one, when people are asking discounts, as you may know, and I was being explicit during the cash flow presentations, open the door to negotiate the terms of payments, but I do not want to change the discount policies. That's the way we behave right now. The reason is because, again, if you look at what we do and you look at the situations, we are bringing to them a tremendous value. Our frustration, Bernard and I, is EUR 1.5 trillion investment on our platform, and we are a EUR 4.5 billion company. To a certain extent, the discount is not the point. The fact for us to demonstrate that we are empathetic with them, there is solidarity with our customers, is to help them on the cash flow.
That's the reason why I stated clearly that on a full year basis, I'm continuing to have probably EUR 200 million cash flow being postponed to 2021.
Very clear. Thank you.
Nevertheless, to promote cloud, that's right, we launch a marketing program whereby you have some incentive, if you are a newcomer and you are starting with the cloud, on the pricing for the first quarter. We didn't change radically our pricing policy.
Next question, please.
Thank you. Your next question comes from the line of Stefan Slowinski from Exane BNP Paribas. Your line is now open.
Great. Thank you very much. Pascal, just a follow-up question on the first question about the non-Medidata subscription revenues. I'm just wondering how you expect those renewals to evolve, I guess, going into next year. You mentioned the one extra point of churn for the smaller customers, potentially difficulty this year, but what about the larger customers? What scope do you see for them to potentially lower their subscription amounts? So maybe if you could help us understand the average timeframe for those contracts. Are they rolling one-year renewals that could be reduced on January 1st of next year, for example? Or are they typically multi-year contracts and therefore there's maybe limited risk to those being reduced in terms of scope?
For the large companies, the vast majority of them are multi-year contracts. Okay? To a certain extent, it's a way to be secure. There is probably one point I did not factor in my guidance, is as you may know, Boeing is going under tremendous pressure. 2020 is a significant year for the ramp-up. Depending the situation for them, if they do not have the people on site or if the situation is complicating the ramp-up, maybe the ramp-up will be postponed. That's probably the only open point I have at this stage.
What kind of impact would that have on your sales? Would you still book the revenue even if that ramp-up is postponed?
No, that's not the way we do.
We usually book the revenue when the license are used.
Yeah. Remember, this year, the plan is for Boeing, it's something I shared, it's EUR +20 million for the full year. We did Q1 on plan. Assuming that Boeing is taking the decisions to ask us to come to a compromise to adjust a little bit, potentially the impact is around EUR 10 million- EUR 15 million.
Okay. Has that been incorporated into your guidance already or is that?
No. Because we are not there. There are many things we can do for them. As Bernard stated, we expect the governments to fund some defense programs to help them. There is a lot of value to accelerate our expansion in this part of the company, because you remember, we are the de facto standard for the commercial side, but on the defense, we are substituting competitors' install base.
Okay. Okay, great. Thank you. Maybe just one follow-up on the cash flow. Just to be clear, you mentioned the EUR 200 million of potential headwinds. Just to be clear, on the full year, what could we expect on the current guidance, the cash flow from operations to be and what about CapEx this year? Thank you.
CapEx will not change, because it's relatively consistent year-over-year. I think 2019 EUR -200 million could be a good base.
Got it. Thank you.
Okay.
We'll take one last question.
Thank you. Your last question comes from the line of Alexander Tout from Deutsche Bank. Please ask your question. The line is open.
Yeah. Hi, guys. Morning. Thanks for taking the questions. Just a few quick ones. Could you please just confirm that your expectation around Medidata growth for FY 2020 overall remains about the same at 13% or any change there? Looks like it might actually have been a bit stronger than that in Q1. Secondly, could you remind the percentage of the recurring revenue base that you consider to be mid-market customers? Just finally, the simulation performance, SIMULIA, in the first quarter and how you expect that to maybe perform over the remainder of the year. Thank you.
Thank you very much for asking.
Okay. Medidata, the plan is still the same, just 13% growth for the full year. By the way, Q1, Medidata is right on this plan. Do not see one single reason to change it. Related to the recurrent revenue coming from the mid-markets. Again, let's slice it. On one hand, you have the maintenance and support, and on the other hand, you have the subscriptions. For the maintenance and support, which represent almost close to 80% of the total recurrent revenue, the percentage is equivalent to the percentage of the revenue coming from the different channels. To a certain extent, 25%, 26% is coming from the mid-market. For the subscriptions, the vast majority is coming from the large corporations. Because you remember it's solutions widely used in aerospace.
Usually in aerospace, all the company we are serving are the large one, with a subscription model. The rest is coming from the simulation. The piece coming from the mid-size market is not the bulk. Do not have the numbers in mind, but it's somewhere around 10%-15% for the subscription.
Great.
Okay?
Yeah.
With that, thank you very much all of you for your questions. We are hosting another call this afternoon at 3:00 P.M. Paris time. You are always welcome if you have more questions. Thank you and enjoy your day. Let's go through this crisis in the most safest way possible. Thank you very much again for your attention to follow Dassault Systèmes.
That does conclude your conference for today. Thank you for participating. You may now all disconnect.