Assystem — Interim / Quarterly Report 2012

Sep 11, 2012

Sustained strong, profitable growth in first-half 2012

• Full-year targets confirmed

• Improved free cash flow

(Paris – 11 September 2012 – 5:35 pm) – The Supervisory Board of Assystem S.A. (ISIN: FR0000074148 - ASY), a leading innovation and engineering consultancy, met on 10 September and reviewed the financial statements for the six months ended 30 June 2012.

The Statutory Auditors have conducted a limited review of the interim financial statements.

(in € millions)	First-half 2012	First-half 2011
Income statement highlights
Revenue	427.1	374.3
Operating profit on business activity1	28.2	25.4
% of revenue	6.6%	6.8%
Operating profit (OP)	26.9	26.6
% of revenue	6.3%	7.1%
Net profit – Group Share	14.6	14.5
Cash flow highlight
Operating free cash flow2	1.6	(16.6)
Balance sheet highlight
Net debt3	12.3	8.4
Per share data (€)
Basic earnings per share	0.76	0.75
Diluted earnings per share	0.69	0.70

"In 2012, Assystem is pursuing its strategy of strong, profitable expansion in leading industries enjoying long-term growth dynamics and where we can leverage powerful competitive advantages, particularly aerospace and energy," commented Dominique Louis, Chairman of the Management Board.

"In the latter market, we have stepped up deployment in the Oil & Gas segment, thanks to our recent entry into the Middle East. Assystem has already submitted bids to a large number of international tenders, where its expertise in safety and complex project management has made all the difference. Based on the dynamic that we've built up in recent years, we are confident that we will meet our fullyear targets of organic growth in excess of 5% and an operating profit (OP) of 7% to 7.5% of revenue."

1 Operating margin on business activity (in on % of revenues): operating income, before expenses related to stock grants and stock options, acquisition costs and gains or losses on disposals of activities and income and expenses related to unusual or infrequent events.

² Net cash flow from operating activities, less capital expenditure, net of disposals.

³ Long-term and short-term debt less cash and cash equivalents and fair value of interest-rate and currency hedging instruments.

ANALYSIS OF THE FIRST-HALF 2012 INCOME STATEMENT

Geographical breakdown of Operating Profit (OP)

€m	First-half 2012	% of revenue	First-half 2011	% of revenue
France	16.9	6.4%	18	7.2%
International	10.0	6.2%	8.6	6.9%
Total	26.9	6.3%	26.6	7.1%

Consolidated revenue stood at €427.1 million in first-half 2012, up 14.1% as reported and 5.7% at constant scope of consolidation thanks to strong expansion outside France and in promising new markets.

Operating profit was stable at €26.9 million for the period, reflecting the investments committed to drive future growth and attesting to the solid performance by the nuclear and aerospace businesses.

Despite a relatively unfavourable business environment, in particular due to the troubled auto industry, operating profit in France amounted to 6.4% of revenue.

Outside France, operating profit rose during the period. Consolidated operating margin was impacted by the consolidation of MPH in the first half. Performance in the United Kingdom remains as robust as ever, as well as in the embedded systems business in Germany.

The operating margin on business activity was 6.6% in the first half, compared to 6.8% in the yearearlier period.

Net financial expense reflected low net borrowing costs (€1.8 million). The effective tax rate stood at 29%, comparable to full-year 2011.

Net profit Group Share ended the period stable, at €14.6 million.

The Group is continuing to generate operating free cash flow, which rose by €18.2 million over the first half compared to first-half 2011.

After financing acquisitions and paying €8.4 million in dividends, Assystem's net debt stood at €12.3 million, compared with €8.4 million at 30 June 2011. This confirmed the solidity of its financial position, with gearing of less than 6%.⁴

OUTLOOK

Thanks to its clear visibility on the second half, Assystem has confirmed its full-year target of more than 5% organic growth and anticipates that reported growth will exceed 10%. The Group also expects its second-half operating margin on business activity comparable to the year-earlier figure, and is aiming for a full-year operating profit (OP) of between 7% and 7.5%, in line with its normalised target.

In addition, Assystem is continuing to review possible acquisition opportunities. In today's economy, it is taking a particularly selective approach to this process, even as it retains its overall growth objectives, notably in the global marketplace.

⁴ Gearing is measured as the ratio of net debt to consolidated equity plus provisions and contingent liabilities (including employee benefits).

2012 INVESTOR CALENDAR

Assystem's interim results will be presented at 8:30 am on 12 September. The presentation, as well as all of the interim financial report, may be downloaded from www.assystem.com.

12 November 2012, after close of trading: Quarterly business review, third-quarter 2012.

Assystem is an international Engineering and Innovation Consultancy. As a key participant in the industry for more than 40 years, Assystem supports its customers in developing their products and managing their capital expenditure throughout the product life cycle. Assystem employs more than 10,200 people worldwide and reported nearly €850 million in pro forma revenue in 2011. The Company is listed on NYSE Euronext Paris – Compartment B - Code ISIN: FR0000074148 – ASY. For more information: www.assystem.com

CONTACTS

Gilbert Vidal Chief Financial Officer Phone: +33 (0)1 55 65 03 10

Agnès Villeret/Lucie Larguier Citigate Dewe Rogerson

Phone: : +33 (0)1 53 32 78 95 / 84 75 – lucie.larguier@citigate.fr

Pauline Bucaille

Vice President, Corporate Communications and Investor Relations Phone: : +33 (0)1 55 65 03 08 – pbucaille@assystem.com

APPENDICES

• OPERATING PROFIT BY BUSINESS UNIT

€m	First-half 2012	First-half 2011
Infrastructure Engineering & Operations*	11.0	10.0
Aerospace Mechanical Engineering	9.5	6.6
Technology & Product Engineering	6.8	9.7
Other businesses	(0.4)	0.3
Total	26.9	26.6

* Previously known as Plant Engineering & Operations

• SHARE CAPITAL AT 31 AUGUST 2012

Shares outstanding
Ordinary shares outstanding	20 734 278
Treasury stock	1 744 825
BSAR 2013 redeemable share warrants outstanding1	4 892 734	Prix d'exercice : 35,00 €
BSAR 2015 redeemable share warrants outstanding2	3 155 419	Prix d'exercice : 11,10 €
Stock awards and performance stock awards outstanding	233 760
Weighted average shares outstanding (at 30 June 2012)	19 096 691
Diluted weighted average shares outstanding (at 30 June 2012)	24 258 196

¹Parity: 1.0; Expire: 31 July 2013; Enforcement call starting date: 31 July 2010; Enforcement call share price: €52.50. ²Parity: 2.0; Expire: 9 July 2015; Enforcement call starting date: 9 July 2013; Enforcement call share price: €15.54.

• OWNERSHIP STRUCTURE AT 31 AUGUST 2012

%	Shares	Effective voting rights3
Dominique Louis/HDL/H2DA4 /CEFID5 /EEC	26.8	31.0
CDC Group6	16.2	24.5
Members of the Supervisory and Management Boards	3.6	5.4
Employee Mutual Fund	1.1	1.8
Free float (including employees)	43.9	37.3
Treasury stock	8.4	0.0

3 These voting rights differ from the theoretical voting rights used in the calculation of threshold crossing.

4 Held by HDL (60.5%) and certain members of the Management Board.

⁵Held by HDL, Dominique Louis and Michel Combes.

6 13,7% held by FSI and 2.5% by CDC EVM.

• CONSOLIDATED BALANCE SHEET

In millions of euros
ASSET	30 June 2012	31 Dec. 2011	30 June 2011
Goodwill	118.6	114.0	92.7
Intangible assets	5.2	5.4	5.8
Property, plant and equipment	20.2	16.5	15.0
Investment properties	1.4	1.4	1.4
Investments in associates	0.7	0.6	0.6
Available-for-sale assets	3.3	3.4	3.3
Other non-current financial assets	7.3	7.1	4.8
Deferred tax assets	3.8	6.1	1.9
Total non-current assets	160.5	154.5	125.5
Available-for-sale-assets			1.0
Trade receivables	272.4	250.3	242.0
Other receivables	28.4	26.7	23.6
Corporate income tax receivables	5.4	1.1	3.9
Other financial assets	0.1
Cash and cash equivalents	129.7	151.8	63.9
Total current assets	437.0	429.9	334.4
TOTAL ASSETS	597.5	584.4	459.9
EQUITY AND LIABILITIES	30 June 2012	31 Dec. 2011	30 June 2011
Share capital	20.7	20.4	20.4
Share premiums	69.1	66.2	66.0
Consolidated reserves Profit for the period	74.3 14.6	42.5 41.0	47.7 14,6
Equity, attributable to Assystem SA	178.7	170.1	148.7
Minority interests	4.6	2.9	2.8
Consolidated equity	183.3	173.0	151.5
Bond loans	105.3	103.9	47.7
Other non-current financial and derivative liabilities	7.0	6.5	2.1
Provisions	0.8	0.8	0.6
Employee benefits	14.5	14.3	14.9
Other non-current liabilities	7.4	0.4	8.0
Deferred tax liabilities	0.5	0.4	0.1
Non-current liabilities	135.5	126.3	73.4
Bond loans	24.4	24.4	16.3
Other current financial and derivative liabilities	5.4	4.7	6.2
Provisions	8.4	10.8	6.7
Trade payables and related accounts	43.6	40.5	35.6
Corporate income tax liability	2.4	2.6	2.6
Other current liabilities	194.5	202.1	167.6
Current liabilities	278.7	285.1	235.0
TOTAL EQUITY AND LIABILITIES	597.5	584.4	459.9

• CONSOLIDATED INCOME STATEMENT

In millions of euros			30 June 2012	30 June 2011	30 June 2010
Revenue			427.1	374.3	312.4
Employee benefit expense			(304.7)	(263.9)	(232.5)
Taxes and duties other than income tax			(1.0)	(0.7)	(0.8)
Amortization, depreciation and provision expense			(3.7)	(4.8)	(5.9)
Other ordinary operating revenue and expense			(89.5)	(79.5)	(57.1)
Operating profit from business activity			28.2	25.4	16.1
Expenses related to stock grants and stock options			(0.5)	(0.3)	(0.4)
Acquisition costs and gains or losses on disposals of activities			(0.8)	1.5	-
Non-current operating expenses and incomes			-	-	-
Operating profit			26.9	26.6	15.7
Share in profit of associates			0.1	0.1
Net borrowing costs			(1.8)	(0.6)	(1.0)
Other financial revenue and expense			(4.0)	(2.4)	(1.8)
Profit for the period from continuing operations before tax			21.2	23.7	12.9
Income tax expense			(6.2)	(8.7)	(4.9)
Profit for the period from continuing operations			15.0	15.0	8.0
Profit for the period from discontinued operations			(0.1)	(0.3)
Consolidated profit for the period			14.9	14.7	8.0
Attributable :
	To Assystem SA		14.6	14.5	7.3
	To minority interests		0.3	0.2	0.7
In €
Basic earnings per share			0.76	0.75	0.38
Diluted earnings per share			0.69	0.70	0.38
Basic earnings per share from continuing operations			0.77	0.75	0.38
Diluted earnings per share from continuing operations			0.69	0.70	0.38
Basic earnings per share from discontinued operations			(0.005)	(0.015)
Diluted earnings per share from discontinued operations			(0.004)	(0.015)

• CONSOLIDATED STATEMENT OF CASH FLOWS

In millions of euros	30 June 2012	30 June 2011	30 June 2010
OPERATING ACTIVITIES
Profit for the period from continuing operations	15.0	15.0	8.0
Elimination of non-cash and non-operating transactions	15.7	13.3	13.7
Change in working capital requirement	(15.4)	(31.2)	(7.1)
Income tax expense	(9.2)	(10.8)	(2.8)
Net cash flow from discontinued operations		1.0	(2.4)
Net cash flow from operating activities	6.1	(12.7)	9.4
INVESTING ACTIVITIES
Non-current assets – acquisitions	(6.3)	(4.6)	(2.3)
Non-current assets – disposals	1.8 (4.5)	0.7 (3.9)	0.3 (2.0)
Securities purchased Securities sold	(15.8) 0.1	(15.7)	(0.2)
Loans repaid by companies classified as available-for-sale assets	(15.7)	(15.7)	(0.2)
Net cash flow from discontinued operations Non-current assets – acquisitions	(0.3)		0.1
Non-current assets – disposals
Net cash flow used in investing activities	(20.5)	(19.6)	(2.1)
FINANCING ACTIVITIES
New borrowings and other debt Bond and other borrowing repayments	0.2 (0.5)	(26.1)	(0.6)
Interest paid	(2.9)	(1.3)	(1.6)
Dividends paid to shareholders of parent company	(8.4)	(8.6)	(4.9)
Capital increases	3.2	2.0
Purchase and disposal of treasury shares	(0.2)	(1.1)	0.7
Net cash flow used in financing activities	(8.6)	(35.1)	(6.4)
Change in net cash	(23.0)	(67.4)	0.9
Net cash at beginning of period	151.4	127.2	92.3
Effect of non-cash items and exchange rate fluctuations	0.2
Change in net cash	(23.0)	(67.4)	0.9
Cash at end of period	128.6	59.8	93.2