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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
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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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%
In millions of euros
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A solid financial structureASSETS LIABILITIES
Cash
Fixed assets
Shareholder’s equity + provisions
Financial Debt
13.0
41.3
4.6WCR
In millions of euros
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
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: 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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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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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
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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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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Acquisition of main ESDS assets
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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Acquisition of main ESDS assets
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
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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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%
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LINEDATA LINEDATA SERVICES GROUPSERVICES GROUP
Questions & Answers