H1_03.ppt

Reproduction interdite - Propriété exclusive de Linedata ServicesSeptembre 2003 - 1

LINEDATA LINEDATA SERVICES GROUPSERVICES GROUP

Half-year results 2003September 2003

Reproduction interdite - Propriété exclusive de Linedata ServicesSeptembre 2003

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Contents

Key facts of the Linedata Services Group

Half-year results 2003: well controlled margins

Asset Management: confirmed position as a world leader

Leasing and Credit Finance: maintenance of strong growth in Europe

Employee Savings: creation of a major player in individual and company-sponsored savings schemes

Conclusion


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Asset Management : US / France / Luxemburg / UKEmployee savings : FranceLeasing and Credit Finance : Germany / France / Tunisia

Software DeveloperSystems Integrator

Processing Service Provider

A worldwide presence in the main financial markets

A major player in financial IT services


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An eventful and positive first half

Asset Management: Group’s positions strengthenedExternal growth: Thomson Financial’s PIMS assetsAn increasingly comprehensive and international range of products

Leasing & Credit Finance: Increasing return of previous investments

Employee Savings: Preparation of ESDS acquisition to create a key business line

New growth drivers with strong potential

Unfavourable external factors: Exchange rate, less favourable economic environment


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An eventful and positive first half

Company evolves to optimise management of future growth

Strengthened managementPascal Xatart appointed as Managing Director of Asset ManagementGilles Labossière becomes the new CFO

ASP data centres transferred to Atos OriginFlexibility and 24-hour serviceInternational support

Offices reorganisationUK: ICON / IASII and LongView teams at the same site in London


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Contents






Conclusion


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Half-year results 2003: consolidation of growth

Overall growth of 3.3% excluding exchange rate effect (- €1.6M due to exchange rate)Negative organic growth excluding exchange rate effect35% of revenues out of international business

In millions of euros

2001 20022000

23.7

38.5

47.6Half-year sales

In €M

2003

47.5


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Half-year revenues 2003

Leasing & Credit Finance25.6%

Asset Management53.6% Employee Savings

20.8%

Breakdown by business unit

Asset Management : Sales at €25.5M, down 5.9% Leasing & Credit Finance : Sales at €12.2M, up 18.6%Employee Savings : Sales at €9.9M, down 2.8%


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Asset Management: First half of 2003: consolidating our performance

€3M behind forecasts

Two simultaneous eventsLonger decision-making times : postponement €5.0M in revenues for new clients: 25% of those booked for H1 03Less growth in existing client base (ASP contracts)

Development according to geographical locations:US

Market plan in USD on track with growth plan in USD 4 new clients signed (Sun Trust, Bank One, Liquidnet and UBS Zurich)

UK

Market plan in GBP on tracks with growth plan in GBP2 new Icon clients (Bealfour Beatty PF, West Yorkshire PF),

Continental EuropeRecurring business, but less growth, 2 major accounts signed (HSBC/Vernet Valor and Groupama)


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Leasing & Credit Finance: targets exceeded

Ekip deployment picks up in Europe

A key step towards “consumer credit”:

A high-potential market: A major agreement with Lukas Bank

one of the leading Polish banksover 2 million contracts eventually

Go-live at several clients: Credit Plus AG, Deutsche Leasing, PSA Germany


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Employee Savings: a consolidated first half of 2003

Number of employee accounts under management continues to grow:

7.4 million accounts on June 30, 20037% growth over December 31, 2002

New services deferred:Bespoke developments and additional modulesLooking to reduce expenses following COB/CMF directives to separate management and accountingAwaiting Fillon law measures


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Half-year results 2003: margins consolidated

Operating income 7.39

H1 2002

Operating margin

Net income before goodwill

15.56%

4.41

Net margin before goodwill 9.3 %

7.42

H1 2003

15.60%

4.61

9.7%

+0.41%

Var

+4.53%

Sales 47.49 47.57 +0.17%

Strong profitability maintained despite decrease in growth, due to:

Rigorous management of operating expenses and economies of scaleASP model

R&D: 8% of sales (compared with 7% in H1 02)

Group net income after goodwill 2.74 2.78 +1.46%



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A solid financial structureASSETS LIABILITIES

Cash

Fixed assets

Shareholder’s equity + provisions

Financial Debt

13.0

41.3

4.6WCR


85.3 52.6

Gearing ratio reduced to 55% (compared with 64% in H1 2002)€5.2M Cash Flow (compared with €3.1M in H1 02) = 11% of revenues€4.3M Free Cash Flow (before dividends) (compared with €2.1M in H1 02) = 9% of revenues

On June 30, 2003


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Contents






Conclusion


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Asset Management: current situation

Euroland Assets Under Management

10,000 bn

1600 bn AUM on Linedata

Services’systems

More than 15% of European assets daily on Linedata Services ‘ systemsLinedata Services serves 180 clients in 15 countriesVia two “regional” solutions: Icon (UK, Scandinavia and Middle East) and Chorus (continental Europe)

Back Office


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Asset Management: current situation

Euroland + North America: a market of over 20,000 users Linedata Services: 3,000 users on a daily basisLinedata Services serves 85 clients on 120 locations in 15 countriesVia two “global” products: LongView Trading System (Front) and Spice (Middle)

Middle & Front Office

Linedata Services: 3,000 users

World: 20,000 users


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Asset Management:an organisation on the offensive

After 5 acquisitions in 5 years, Asset Management has reorganized:

1 head office and 1 sales/development department

4 operational departments per geographical area:North America (80 people)UK, Scandinavia and the Middle East (120 people)Benelux, Switzerland and Germany (30 people)France and South Europe (80 people)

2 product development centresBoston: Middle and Front OfficeParis/London: Back Office

1 operational centre (ASP) Atos Origin (operational centers in France and UK)


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Strategy based on 3 factors:

Coninually improving product rangeFinancial Data Back Office Middle Office Front Office ECN/ATS

Combined with a unique range of servicesSale of software FM (Facilities Managament) ASP (Application Service Provider) BPO (Business Process Outsourcing)

Accessible from all client sitesContinental Europe UK and Scandinavia North America Middle East Asia

Flexible business model

- ASP or Licences- Single product or Comprehensive solution

Services

Products

Locations

Asset Management: focusing on growth


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Areas of significant growth

Cross-SellingLinedata Services works for over 200 prestigious clientsSeeking to combine their solutionsIn most of their locations

A ROI-oriented offeringLinedata Services provides a unique and constantly developing range of productsAssociated with Added Value and cost-saving servicesROI-oriented

An economic climate encouraging “unification”The current economic situation discourages global playersAnd encourages search for local partnersWith a player seeking unification: Linedata Services


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Conclusion


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Leasing & Credit Finance: a high-potential market

500 million euros in outstanding credit in Europe (=US)75 million loans, including 7% managed by Linedata Services 75% of loans in 4 countries: Germany (23%), UK (22%), France (17%) and Italy (13%)

Leasing 36%

Car Finance 34%

Analysis of credit market in Europe in terms of outstanding credit

Consumer credit 28%


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Leasing & Credit Finance: fully exploit our potential in Europe

Supporting major accounts internationally

Strengthen our presence in EuropeUse our capacity to handle large volumes (PSA, LUKAS)Extend our contracts to a multi-national levelIncrease strategic partnerships

Pre-sale, integration (Accenture)Additional functional services (Bynx)

Continue development of ASP model with international clients

Prestigious reference in 2002: Toyota Financial ServicesLeading international reference in 2003: FranFinance Suisse(Société Générale Group)


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Contents






Conclusion


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The French individual and company-sponsored savings schemes market: current situation

10 million employees, including 7.4 million managed by Linedata Services

Number of policy holders increasing by 10% each year

The gradual effect of the Fabius Act on SMEsPotentially 6 million additional accounts

Few laws in Europe compare

Employee Savings: great potential for small and medium size

companies


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The French individual and company-sponsored savings schemes market: current situation

Individual savings: Essentially Life Insurance with 18 million policy-holders, including 1/3 of retirement policiesPEP/PEARetirement savings for self-employed workers (Madelin, ex-Coreva) and civil servants (Prefon)

Company-sponsored savings: Additional Retirement Savings for employees:

Articles 39, 82, 83, IFC, etC.1 million subscribers

Similar plans in the main European countries

Insurance-based retirement savings plans


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The French individual and company-sponsored savings schemes market: significant developments

PEIR:An essentially individual retirement savings plan

Open to all French residentsAnnuity paymentWill gradually replace individual measures already in place (particularly life insurance)

PPESVR: A retirement version of the PPESV

Open to all employeesAnnuity payment or lump sumGroup plan subject to company approval

A major event: the Fillon laws2 new retirement savings plans created


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A larger, unified picture

The boundaries are no longer clear

PEE, PEI (profit sharing)

Art. 39, 82, 83,IFC, Madelin

Insurance for life, death, pensions

and PEP

Employee Savings

Retirement Savings

Life Insurance

PPESVR PEIR


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Acquisition of main ESDS assets

A French company specialising in individual and group savings

Founded in 1990Founders and current directors: Jack Hazout, Olivier Réglade and Jean-Marie ValiconRevenues in 2002: €10.6M - Revenues forecast for 2003: €12M 30% of revenues recurrentModel used geared toward an ASP model (monthly billing + hosting)50 employeesLocations: Saint-Ouen & Gentilly1 subsidiary specialising in BPO (22% of Vie Services held with ACMN VIE)


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A comprehensive offering in Life Insurance and Retirement Savings

Master A software: Covers the entire range of personal insurance productsIndividual and group productsLife, funded pension schemes, retirement and pensions (excluding health)Multi-currency and multi-lingualMulti-tiers architecture developed under ORACLE, Web portal, Workflow, GED

3 types of additional offers:Software on siteASP (LDCOM hosting)Delegated management (via Vie Services)


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Prestigious clients in the European insurance sector

Insurance companiesAGF-Allianz, AIG, Erisa, Fortis, Scandia, Zurich Assurances

Mutual insurance companiesACMN Vie, MAAF, MAIF, Mutuelles de France

Pension funds and additional retirement plansAG2R, Ionis, Mederic, Malakoff, Pasteur

Approximately 1 million contracts managed


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Life insurance and supplementary retirementA booming IT market

Life insurance companies’ external expenses: €500M in 2002

Software still only a small part:Approximately 15% of external expenses

A trend towards IT outsourcing:Often simultaneously with internal systemsAlready available with delegated management

Trend boosted by:Need to rapidly adapt to market trendsIncreasing importance of ROI on IT budgets


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ESDS: a solid position in a booming market

Revenues d’Affaires Progiciels en Assurances Vie et Retraite Complémentaire (*)

* Excluding Health

CSC (€21M)

ESDS (€12M)

EDS Solcorp (€5M)

Extel (€3M )

Misc (€9M)

Revenues for Software in Life Insurance &Supplementary Retirement Schemes (*)


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The European market for life insurance and pension funds: great potential for LDS

Life Insurance:World: US = Europe (ahead of Japan)Europe: UK = leading player ahead of France, Germany and Italy

Supplementary retirement and pension funds (Europe):Mature countries: UK, Netherlands, Switzerland and SwedenRecent laws: Germany, Italy, Spain and France

A European industry for IT companies:UK: Marlborough Stirling, Sherwood, Profund, and CominoGermany: FJA, COR AG and VESSwitzerland: Hewitt and Trianon

Potential acquisition targets for LDS


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Individual and group savings: Commercial position forecast for 2004

Leader

2004/2005 launch

Development in Europe

Employee Savings+ Employee Stock

OwnershipRetirement

SavingsLife

Insurance

France

LDS offering

Europe

LDS site


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Contents






Conclusion


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Short and medium-term objectives

Maintaining 2003 financial objectives:10% growth at a constant exchange rate (excluding ESDS integration)An operational margin at least equal to that of 2002

Strengthening our investment capacity:€20M in revenues acquired in 2003 by improving results

Toward a corporate structure producing €200M in revenues at the end of 2005:

Group’s current corporate structure for end of 2003/start of 2004: €115MPotential for growth identified within the 3 main areas of activity


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Investment information

Share price at 22/09/03 : €14.72 Market cap. at 22/09/03 : €142.7MNumber of shares : 9,691,931

SBF 250IT CAC 50Next Economy

Ownership structure

Public : 55%Managers & employees : 38%APEF : 7%

Reproduction interdite - Propriété exclusive de Linedata ServicesSeptembre 2003 - 38

LINEDATA LINEDATA SERVICES GROUPSERVICES GROUP

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