H1-07/08 results

& outlook

SFAF meeting

Palais de la Bourse- November 14th 2007 -

Bernard HuvéEric Matteucci

2

SII in brief

Sales of

€127min 2006/07

Operating margin:

9.2% of sales

Staff growth

Financial strength and sustainability

• Launched in April 1979

• Financial position:

• Net cash flow €12m

• Shareholders’ equity €40m

Various activitiesSales growth

Integrated systems

Networks & TelecomsThird-party maintenance

40%

R&D outsourcing

R&D consultingResearch and development

Process, industrialisation

60%

Development and consulting

Contracting assistance

Various and non-IT

IT services

0

20

40

60

80

100

120

140

97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07

0

200

400

600

800

1000

1200

1400

1600

1800

97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07

IT engineering and consulting

3% 5%

92%

3

Breakdown of sales/clients by sector

New clients in H1-07/08 includeCoface, Rio Tinto, Auchan, Arcelor, Smiths and RATP

SII in brief

Sales by sector transportation

Banking, Insurance 7%

Industry 57%

Telecom and Media 17%

Transportation & Tourism 6%

Utilities 3%

Other services 6%

Public services 3% Trade, retail 1%

Electronics 20%

Aerospace 25%

Defence 14,3%

Automobile 13,3%

Other 11%

Digital TV 7.8%

Payment terminals 6.3%

Railroad 2.3%

Industry breakdown

4

SII in brief

Breakdown of sales by type of client

20 biggest customers = 70% of sales Alcatel IBM DCN Safran EADS Siemens France Telecom Thales Gemalto Thomson

Low dependency (except in terms of referencing) Multi-company client base Multi-site company

Breakdown of sales/type of customer

92% 4% 4%

Big account SME Miscellaneous

5

CMMi, means of industrialisation

Quality insurance, a pioneering approach SII is one of the oldest IT service companies with ISO9001 certification (1992) Broad scope (activity, branches)

CMMi model, SII still leading the way in quality insurance CMMi – a model for checking IT systems’ development potential

Use of CMMi methodology since 2004 More than 50% of activity is CMMi assessed (2 or 3) Investment of around €200k per year between 2004 and 2009 to increase brand

awareness and profitability

CMMi, advantages for clients, employees and the company Clients: managing quality, scheduling and requirements Employees: working in an environment where processes are formalised Company: controlling commitments, monitoring hazards, managing risk

SII in brief

6

Nine profit centres in France, developments abroad Light structure Fully autonomous managers Local service Local roots Virtual real-time reporting

The benefits of a medium-sized player Decentralization/Dispatching responsabilities Commercial dynamics and steady customer relations Flexibility & local reactivity

SII is “outperforming” its sectorAverage annual growth of 23%

in sales and operating income over 10 years

SII in briefAssets: responsiveness, flexibility and sustainability

7

Summary

H1-07/08

H1-07/08 results

2007/08 trends

8

Technology consulting: structural growth

A booming market driven by R&D outsourcing and embedded systems Essentially provided by French companies

High employment 3,500 net job starts forecast for 2007 in companies with

more than 10 employees (source: OPIIEC)

Structural growth Acceleration in the rate of innovation and time-to-

market R&D outsourcing strategy

• Internal focus on “core, core business” Search for specific expertise

Technology consulting +7%

+6.0%

+7.0% +8.0%

ISTI* Embedded softwareservices

R&Doutsourcing

*ISTI: Information, Science, Technology and Industry

Source: press conference – Syntec Informatique October 2007.

H1-07/08Confirmation of sector growth

9

Continued pressure on prices Offshore – Near-shore Fragmentation of sector*

• €5.3bn of sales in France• 65,000 jobs• 4,600 companies, including 605 with more than 10 employees

Buyers’ market

Recruitment problems

Industrialisation still greater for “sounder, cheaper, faster” operators

* Source: press conference – Syntec Informatique October 2007.

H1-07/08Confirmation of sector growth

10

07/08 priorities

Recruitment Keep technical and human criteria Limit wage spirals

Selling prices Arbitrate between growth and profitability Select clients

Industrialisation Continue CMMi deployment (2004/2009) Reduce cost prices (work package)

International development After Poland and the Czech Republic…

Reminder of the four challenges facing SII

11

H1-07/08

Structural costs under control

16%

17%

18%

19%

20%

21%

22%

23%

24%

25%

26%

97/98 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08e

Change in structural costs

SII definition:

(Total costs – payrolls of billable employees – subcontractor costs) / total costs

12

H1-07/08

Inter-contract rate

2,5

3,5

4,5

5,5

6,5

7,5

8,5

avr-0

5

mai-

05

juin-

05

juil-0

5

août-

05

sept

-05

oct-0

5

nov-0

5

déc-0

5

janv-

06

févr

-06

mar

s-06

avr-0

6

mai-

06

juin-

06

juil-0

6

août-

06

sept

-06

oct-0

6

nov-0

6

déc-0

6

janv-

07

févr

-07

mar

s-07

avr-0

7

mai-

07

juin-

07

juil-0

7

août-

07

sept

-07

1000

1200

1400

1600

1800

2000

2200

SII:

(billable - billed) / billable

H1-07/08: back to normal

Inter-contract rate

Change in headcount (end of month)

% Employees

13

Increased weight of work package services Commitment to results vs. resources Outsourcing of tasks Global contracts vs. one-off expertise

H1-07/08

Work package development

Work package

Fixed price

Time & material

Other

91% 84% 78% 73% 68%

02/03 03/04 04/05 05/06 06/07

8%13%2%

14%14%

13%

6%11%

16%

66%

13%

19%

S1 07/08

14

H1-07/08

Further growth in European network

0-100Lille, Strasbourg, Warsaw, Brussels, Prague

100-200 Nantes

200-500Aix, Rennes, Sannois,

Sophia, Toulouse, Vélizy

Geographic breakdown of salesStrasbourg

Vélizy

Sannois

9 branches11 offices

Toulouse

Bordeaux

Nantes

Le MansBrest

RennesCaen

Lannion

Niort

Sophia

La Ciotat

Aix

Lyon

Vitrolles

Lille

Warsaw

Prague

Brussels

Headcount

Montpellier

Tours

Rest of France68%

Paris area30%

International2%

15

H1-07/08

International developments

Development on domestic markets

Poland (January 2006) From zero to 65 employees 11 local IT system clients (2/3 of sales) (Banking/Insurance – Telecom operators

and equipment manufacturers)Pekao, Axa, Citibank, Société Générale, Allianz, Ericsson, FT

One R&D client (1/3 of sales): Gemalto

Czech Republic (May 2007) 5 employees Gemalto "client sponsor" for R&D outsourcing

Belgium (September 2007) Start-up period

16

Summary

H1-07/08

H1-07/08 results

2007/08 trends

17

Key figures

Sales (€m)

+14.7%

H1-06/07 H1-07/08

Operating income (€m)

Operating margin of 7.3%

+1.4%

H1-06/07 H1-07/08

4.834.83

Net income (€m)

-1.6%

H1-06/07 H1-07/08

4.904.90

58.7458.74

67.3567.35

3.203.20 3.153.15

Results in line with company’s business plan

Structurally negative seasonal factor in H1

18

2.18

Breakdown of overheads

€4.90m+1.4%

Sales Operatingincome€67.35m

+14.7%

Outside purchases

Other operating income

Salaries and payroll costs

Taxes

0.24 6.67

53.06

0.78

Provisions

19

H1-07/08 results

€mH1-06/07 H1-07/08

Sales 58.74 67.35 +14.7

Operating income 4.83 4.90 +1.4

as % of sales 8.2 7.3 -0.9 pt

Financial income 0.12 0.15 +25.0

Taxes 1.75 1.88 +7.4

Net income (group share) 3.20 3.15 -1.6

as % of sales 5.4 4.7 -0.7 pt

Average headcount 1,704 1,927 -

Headcount at period end 1,755 2,028 -

20

Cash flow table

€m H1-06/07 H1-07/08

Cash flow ratio 3.50 4.09

Change in WCR -4.10 -2.15

Cash flow -0.60 1.94

Investment (including takeovers) -0.30 -0.63

Financing (including dividends) -1.50 -1.43

° Free cash flow -2.40 -0.12

Purchase of shares -1.12 -0.18

° Net cash flow -4.20 -0.30

H1-07/08 results

Change in WCR = ¼ of sales growth

21

A healthy financial structure

€m

Balance sheet

IFRS30/09/2006

Non-recurrent5.9

WCR18.6

Cash flow10.5

Shareholders’ equity34.5

Non-recurrent0.5

IFRS30/09/2007

WCR22.2

Cash flow12.0

Shareholders’ equity40.0

Non-recurrent0.6

Non-recurrent6.4

22

SII on the stock market

Shareholder structure at 30 September 2007

Source : SII

3,000,000 shares

Float 20,3%

Management 62,4%

Autodétention 9,8%

Parvus AM 7,5%

23

SII on the stock market

25

30

35

40

45

50

Oct2006

Nov Déc2006

Jan2007

Fév Mar Avr Mai Jun Jul Aoû Sep Oct2007

SII SA CAC 40 (FR) Akka Technologies SA Alten SA Altran technologies SA (FR Listing)

Comparative one-year share performance

24

Summary

H1-07/08

H1-07/08 results

2007/08 trends

25

SII is structurally outperforming the S&S sector

Source: press conference – Syntec Informatique October 2007.

An increasing ratio

Changes in GDP growth, investment, S&S and SII

-5

5

15

25

35

45

55

65

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

PIB SS Invest. SII

26

Demand to remain firm

Further investment in companies Catching up on previous underinvestment Technological innovation, spreading of embedded electronics Upgrade of information systems Numerous projects

More outsourcing Increasingly complex projects Refocusing on core business Retirement of baby boomers

Current issue: recruitment Problems with hiring in some skills Maintain quality and profitability criteria SII: 700 new engineers expected for 2007/08 Slight drop in turnover (22% to 17.5%) since the beginning of the FY

Outlook for 2007/08

27

Almost stable pricing tariffs Demand-side pricing power Heavy competitive pressure Indirect pressure from offshore

Scissors effect: selling prices – cost prices Wage pressure Shortage in some areas

Outlook for 07/08 A restrictive “daily rate–skill–wage” comparison

28

SII: constant quest to improve profitability

Continued rigorous management

Possibility of near-shore operations

Growth/profitability arbitration

Need to avoid a deflationist approach… …that could lead to rejection of assignments

The real issue: improving production processes Service contract or work package: “coming up trumps” CMMi

Outlook for 07/08

29

Outlook for 07/08

1. Limited risks Clients: major, loyal customers Technological history and background Quality control: long-term and distinct

2. Simple, insurance operating model One company, several profit centres Decentralised structure, local services Corporate culture: technical and service

3. A sound financial base Steady cash flow generation Satisfactory cash flow No financial debt

Ongoing strengths

30

Establish board of directors and supervisory committee Board of Directors

Eric Matteucci for general operations; chairman of the board Patrice Demay for development in France; member of the board Jean-Paul Chevée for international development, member of the board

Supervisory Committee Bernard Huvé, chairman of the supervisory committee

Increase share liquidity Increase shareholders’ equity through incorporation of reserves Freely allocate six shares for every one currently held Increase number of shares sevenfold

Thus structured,SII will be able to overcome new challenges

The new team aims to continue the “SII adventure”

Extraordinary Shareholders Meeting 20 December 2007

Resolutions

31

Targets for 07/08

Economic assumptions Sustained demand

Growth of 6% to 8% according to Syntec Informatique Pressurised margins

2008 prices = 2007 prices + ε

SII targets Sales €145/150m (organic growth of 15%) Operating margin 10% (gain of 0.8 point) Recruitment of 700 people (386 at end-September)

Confirmation of previously announced targets

32

Upcoming dates

Shareholders meeting (extraordinary): 20 December 2007

Q3 sales: 14 February 2008

Annual results and SFAF meeting: 15 May 2008

Shareholders meeting: 18 September 2008