Simon AZOULAY, Chief Executive Officer, presents six priority areas, 2006 results and the ALTEN Group’s development strategies.

1. Strong, well-controlled growth

The ALTEN Group has always known how to combine organic growth with growth by acquisition at a sustained pace whilst remaining in control of its organisation and the risks.
In 2006, we achieved a turnover of e576m and a growth figure of 32%, mainly organic growth (17.8%). In this respect, 2006 was more than satisfactory.
The Automobile, Aeronautics and Telecoms sectors were dynamic.
Such performance is all the more remarkable in that it was achieved amid particularly competitive conditions in France.

2. We still came up with the results

Our operating margin stood at 13.1% in 2006, down slightly in comparison with 2005.
This was due to a reduced number of business days and the consolidation of several companies we acquired being less profitable than other Alten Group entities.
The margin is nonetheless quite high for the sector and provides the ALTEN Group with an excellent potential for investment in its sector.
Salary control and growth partially compensated for the low rise in client rates.

3. A clear strategy

Today, the ALTEN Group is the number one Advanced Technology Consulting firm in Europe with more than 9,000 employees and consultants involved in providing high value-added services.
The market we are dealing in is buoyant. There is an increasing need for technical design in R&D or for infrastructures (+7% per annum).
Clients favour companies of a critical size with significant international business.
All this means we can anticipate strong growth prospects over the coming three years.
ALTEN is becoming a force to be reckoned with in the market and will be able to attract the most talented and best meet clients’ expectations by offering a complete package and deploying it on an international scale.

There was even more focus on outsourcing R&D in 2006. Whilst the decrease in the number of suppliers is interesting from a commercial point of view, it places customers in a better position to negotiate prices.
Strong pressure on prices and margins accentuates the insecure position of many medium-sized entities that are agreeing to carry out projects under dangerous conditions and showing low levels of profitability.
Up until now, ALTEN has been able to maintain a strict management policy whilst increasing its market share.

4. A strong desire to develop on an international scale

The ALTEN Group’s international business accounts for more than 25% of its turnover and a technical labour force of more than 2,000 employees.
Strategic development regions include Germany, Benelux and Spain. In each of these three regions, we have approximately 600 employees and the prospect of quickly reaching a critical size of more than 1,200 people in each case.
We are already beginning to see new frontiers take shape: the United Kingdom, Italy, Romania, The Czech Republic, Poland, etc.
These countries are destined to quickly become further engines of growth.
The rate of R&D outsourcing in Europe is believed to be between 10 and 15% according to the country; in France it is 27%. Structurally, there is a significant increase in demand. Finally, international margins are higher than those in France.
This situation places us in a position to seize opportunities for development more quickly.
Through the sustained pace of our organic growth and thanks to the financial resources we have for growth by acquisition, we remain confident in our objective to achieve a third of our turnover through international business from 2010.

5. A market that is undergoing considerable change

Today, the number one change lies in the promotion of the engineering profession in European technical courses of study. Today we are experiencing an unprecedented paradox - on the one hand, the need to meet the increasing technological requirements of our clients and, on the other, a considerable decrease in the number of students opting in favour of courses in finance and management rather than purely technical subjects right from the start of their higher education. Advanced Technology Consulting firms are naturally affected by this phenomenon and need to take action to promote the profession more.

The second change is to do with the increased demand for the provision of services in the form of work-packages or on a fixed price contract basis. Today, approved companies have to be able to offer their clients a broad range of disciplines, skills and packages (Project Management, Integrated Projects, Fixed Price Contracts, etc).

Lastly, our clients are looking to outsource to service providers in Eastern Europe and Asia.
We believe that R&D services with high value-added will be little affected by this over the coming years, but we need to adapt to accommodate these particular demands.
We have increased our Near-Shore and Off-Shore package and it should account for approximately 5% of our turnover during the course of 2009.

6. Ambitious development prospects

2007 is going to be an important year for the Group’s future. Our objectives are ambitious, but realistic. By maintaining our organic growth in France and Europe, as well as our targeted growth by acquisition, in two or three years time we should be able to achieve a work force of 12,000 employees, including 30% on an international scale.

The ALTEN Group is ready to take up the challenges and consolidate its leadership.

Innovation is more than ever the key to economic development and the technological requirements of major accounts in industry and the service sector in France and Europe are greatly increasing.
Our clients will move towards the role of integrator and strategist and will increasingly assign their consulting and design projects to Engineering Consulting Firms.

> Through its image and dynamism, ALTEN will be able to attract the best talent and remain its clients’ preferred partner.

Simon Azoulay

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