Sword Group — Earnings Release 2018

Jan 24, 2019

Financial Announcement

Windhof - January, 24th 2019

SWORD

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Sword Group - 2018 Fourth Quarterly Results

Consolidated Revenue: €47.7 M (Constant standards)

Proforma perimeter Organic Growth: + 21.4%

2019 Revenue Target over €200 M

Year 2018 has been marked by 2 sales, Sword Performance, sold at the beginning of the second quarter of 2018 and Sword Apak, sold at the beginning of the 4th quarter 2018.

The profitability of the remaining perimeter (proforma) has increased (12.5% in 2018 compared with 11.1% in 2017).

The increase in consolidated profitability between 2017 and 2018 can be explained by the sale of Sword Apak.

Year 2018 has been characterized by the following strong points:

• Strong internal growth,
• The sale of Sword Apak which has enabled the Group to attain a net cash position of €86 M after paying an exceptional dividend,
• Reinforced coherence in Group offers.

As a reminder, the cash remaining after the payment of exceptional dividends will be used for financing:

• Internal growth,
• New initiatives,
• More important acquisitions.

In sectorial terms, the breakdown of consolidated organic growth at constant exchange rates and on a like-for-like basis on December 31st is as follows:

• Software: + 6.1%
• Services: + 22.0%
• Total: + 18.3%

In sectorial terms, the breakdown of proforma organic growth at constant exchange rates and on a like-for-like basis (without taking account of the companies sold over the whole 2018 year) is as follows:

• Software: + 18.5%
• Services: + 21.8%
• Total: + 21.4%

[...]

The press release will be published on the web sites here after: Thomson Reuters and Sword Group. It was also sent to the "Commission de Surveillance du Secteur Financier (CSSF)" and saved on the Luxembourg Stock Exchange's website.

Market	ICB 9530	ISIN Code	Indices	Sword-group.com
Euronext Paris	Software & Computer Services	FR0004180578	CAC® Small	CAC® All-Tradable
Compartment B			CAC® Mid & Small	CAC® All-Share

Sword Group - 2, rue d'Arlon L-8399 Windhof - investorrelations@sword-group.lu

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CONSOLIDATED ACCOUNTS AT CONSTANT STANDARDS

Year (i) (i)
€M	2018	2017
Revenue	194.3	173.5
EBITDA	27.2	27.8
EBITDA Margin	14.0%	16.0%

Consolidated organic growth at constant exchange rates and on a like-for-like basis: +18.3%.

CONSOLIDATED ACCOUNTS AFTER TAKING ACCOUNT OF IFRS 15 IMPACTS

€M	2018 (i) (ii)
Revenue	191.5
EBITDA	26.6
EBITDA Margin	13.9%

2018 proforma (without taking account of the companies sold over the whole 2018 year) is €168 M; an increase of +21.4%.

(i) Non audited figures
(ii) Percentages calculated based on the figures in €K

POST-CLOSURE EVENTS

As from January 2019, the Group will consolidate the two companies TIPIK and Magique Galileo in its accounts.

TIPIK will provide the Group with its technological expertise in digital communications; its budgeted revenue for 2019 is €10 M.

As far as Magique Galileo is concerned, it was bought for the quality of its risk management products designed for the Banking/Insurance sector. This entity's budgeted revenue for 2019 is €1.5 M.

TIPIK will be consolidated in the Services division on account of the complementarity of its offers with those that already exist in the Group.

OUTLOOK FOR 2019

These various elements enable the Sword Group to target provisional revenue of €200 M⁺ with an EBITDA margin of 13%⁺.

The budget takes account of organic growth of 12%⁺.

This growth is confirmed by the size and quality of its backlog.

The press release will be published on the web sites here after: Thomson Reuters and Sword Group. It was also sent to the "Commission de Surveillance du Secteur Financier (CSSF)" and saved on the Luxembourg Stock Exchange's website.

Market

Euronext Paris

Compartment B

ICB 9530

Software &

Computer Services

ISIN Code

FR0004180578

Indices

CAC® Small

CAC® Mid & Small

CAC® All-Tradable

CAC® All-Share

sword-group.com

Sword Group - 2, rue d'Arlon L-8399 Windhof - investorrelations@sword-group.lu

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