ESI Group: Revenue growth for the 1st quarter of 2013/14: +2.0% to €21.6 million (+6.2% at constant currency)

Regulatory News:

Alain de Rouvray, ESI Group’s (Paris:ESI) Chairman and CEO, comments: "ESI Group has delivered a solid first quarter in terms of revenue growth, despite a negative base effect associated with the depreciation of the Japanese yen and exceptional elements recorded over the first quarter of 2012/13. This positive trend is notably reflected through the success of our offer in BRIC countries, as illustrated by the recent signing of a remarkable Joint Venture contract with the Chinese Aerospace Group AVIC-BIAM. This very positive trend in terms of activity in emerging countries lays witness to the relevance of the Group’s strategy to support their transition towards end-to-end virtual prototyping. These factors are reassuring in the context of a macroeconomic situation that has become more difficult again, whilst the increasing complexity associated with globalisation requires the Group’s internal reporting structure and processes to be adapted.”

1^st quarter revenue

* Revenue includes activity recorded by OpenCFD Ltd, consolidated from September 12, 2012

Reminder: the seasonal nature of ESI Group's Licenses sales usually results in a larger proportion of full-year revenue being recorded over the fourth quarter of the year. The first-quarter evolution is therefore not representative.

Revenue for the first quarter of the current financial year in actual terms totalled €21.6 million, up +2.0% (+6.2% at constant currency) and stable organically on the first quarter of last year. The product mix remained stable compared with last year, with 67% of revenue coming from Licenses and 33% from Services. The substantial increase in activity in BRIC countries (+20%) has continued, with 15.6% of orders over the quarter coming from these countries, versus 13.5% over the 1^st quarter of 2012/13. Especially, sales activity in Brazil was up sharply compared to the same period of 2012/13.

Licenses revenues in actual terms totalled €14.6 million, up +1.3% (+6.3% at constant currency) and +0.6% organically (+5.5% at constant currency). Although negatively impacted by exchange rates, the level of Licenses repeat business remained high at 82% of Licenses revenue. (NB: A repeat rate of 96% reported for the same quarter of 2012/13 was above historical trends thanks to a positive impact of exchange rates and exceptional transactions). Licenses New Business was down -14.6%, impacted by a substantial negative base effect associated with the arrival of major new clients in Europe and Asia during the 1^st quarter of 2012/13. The installed base, meanwhile, was up +5.3%.

Services revenue in actual terms recorded growth of +3.4% to €7.1 million (+5.8% at constant currency) and -1.3% organically.

The geographical split in activity edged towards the Americas (20% of revenue) and Europe (41%), whilst the weight of the Asia zone (39%) was pushed down by the substantial depreciation of the Japanese yen. In the American zone, activity recorded a buoyant increase of +14.9% in actual terms, reflecting a good base level of activity as well as a slight catch-up effect for Licenses following the slowdown observed over the final quarter of the previous fiscal year.

About ESI

ESI is a pioneer and world-leading provider in Virtual Prototyping that takes into account the physics of materials. ESI boasts a unique know-how in Virtual Product Engineering, based on an integrated suite of coherent, industry-oriented applications. Addressing manufacturing industries, Virtual Product Engineering aims to replace physical prototypes by realistically simulating a product’s behavior during testing, to fine-tune fabrication and assembly processes in accordance with desired product performance, and to evaluate the impact on product use under normal or accidental conditions. ESI’s solutions fit into a single collaborative and open environment for End-to-End Virtual Prototyping. These solutions are delivered using the latest technologies, including immersive Virtual Reality, to bring products to life in 3D; helping customers make the right decisions throughout product development. The company employs about 1000 high-level specialists worldwide covering more than 30 countries. ESI Group is listed in compartment C of NYSE Euronext Paris.

For further information, visit www.esi-group.com.

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ESI is the leader and a pioneer in virtual prototyping solutions.

Stock market information

Listed on compartment C of the NYSE Euronext Paris
ISIN FR 0004110310

FTSE 977

Bloomberg ESI FP

Reuters ESIG.LN

Granted "entreprise innovante” (innovative company) certification on January 20, 2000 by OSEO, ESI Group is eligible for inclusion in FCPI (venture capital trusts dedicated to innovation)

Financial schedule

Revenue for the 2^nd quarter of 2013/14 will be published on:
September 12, 2013
(after market)

Our Press Section can be found at www.esi-group.com