Microsoft PowerPoint - SFAF Presentation - Sept 18 2007 FINAL

September 2007

Q2 2007 EARNINGSSFAF PRESENTATION

François LEGROS, Chairman and CEOAndrew LAZARUS, EVP and CFO

September 26, 2007

Page 2September 2007

Content

Q2 2007 Highlights –François Legros, CEO

Financial Performance –Andrew Lazarus, CFO

Conclusion –François Legros, CEO

DISCLAIMERThis presentation may contain some statements that constitute forward-looking statements. Forward-looking statements are statements other than historical information or statements ofcurrent condition. They may appear in a number of places in this presentation and include statements concerning Genesys Conferencing's intent, belief or current expectations regardingfuture events and trends affecting Genesys Conferencing’s financial condition or results of operations.

Forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-lookingstatements as a result of various factors. Some of these factors are described in the paragraph 4.5 of the Document de Référence, filed with the Autorité des marchés financiers undernumber D.07-551 on June 5, 2007. Although Genesys Conferencing’s management believe that their expectations are reasonable based on information currently available to them, theycannot assure you that the expectations will prove to have been correct.

Accordingly, you should not place undue reliance on these objectives. In any event, these statements speak only as of the date of this presentation. Except to the extent required by law,Genesys Conferencing undertakes no obligation to revise or update any of them to reflect events or circumstances after the date of this presentation, or to reflect new information or theoccurrence of unanticipated events.

September 2007

Q2 2007 HIGHLIGHTS


Q2 2007 Highlights

Q2 2007 Accomplishments

Continued strong adoption of“multimedia collaboration”platform

Strong revenue growth in euros, despite the weakness of U.S. dollar

Improved operating efficiency

Improved profitability

Increasing 2007 Revenue Target

Issuing 2007 EBITDA Target

Secured Funding Flexibility

September 2007

Q2 2007Financial Performance


Operational and Strategic Accomplishments

Migration from legacy attended services to automated / (GenMC) services. Reduction in direct costs.

Automated and consolidated back-office functions. Reduced headcount.

Increased R&D expenditures to develop GenMC 4.0. Increased S&M expenditures.

De-leveraged balance sheet. De-registration from SEC.

Optimizationof Cost

Structure

CorporateFinance

Initiatives

Reinvesting inLong-Term

Growth

Product Refocusand Operating

Leverage


Financial and Operating Reorganization Metrics

39Number of Call Centers

Vienna, VAMontpellier, FranceAdministrative Headquarters

0.7x6.4xNet Debt / Adjusted EBITDA (3)

61.5%56.6%Gross Margin %

17.2%45.2%Attended Revenue as a % of Total

82.8%54.8%Unattended Revenue as a % of Total

€30.0

€64.4

567

381

948

2007 (1)

€125.1

829

290

1,119

2002

5-year Cumulative R&D and CapEx (2)

Total Debt

General and Administrative Staff

Sales & Marketing and R&D

Total Number of Employees

(€in millions)

(1) 2007 financials based on Q2 data only and are annualized; employee numbers based on Q1 data.(2) Based on 2002 –2006 Annual data; Includes €7.6 million in capital expenditures spent on the acquisition of businesses.(3) Adjusted EBITDA excludes stock-based compensation, restructuring charges and other non-recurring items.

91

171

262

€95.1

5.7x

31.5%

15.3%

31.7%

6

8.7%


€ 35.9€ 34.1

€ 37.7

€ 36.2

€ 35.2

744.1694.3

569.4 556.9

604.7

25

27

29

31

33

35

37

39

Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 20070

100

200

300

400

500

600

700

Inm

illio

ns

ofm

inu

tes

Revenue and Volume

Revenue inMillion Euros

Volume inMillion Minutes

Q2 2007 vs Q2 2006Revenue up 5.1 %Volume up 30.7%


Revenue

SECOND QUARTER

37.835.9TOTAL REVENUE

0.70.7Genesys Video Service

6.57.0Genesys Event Service

30.528.1Genesys Meeting Center

20072006(Revenue in million euros)

Genesys Meeting Center revenue upExpected decline in legacy attended

conferencing services

€2.4 or 8.4%

€0.5 or 7.1%

Stable

€1.8 or 5.1%


Second Quarter 2007GenMC Revenue Analysis

(in millions euros)

30.528.1

(1.1)

(5.8)9.3

0

5

10

15

20

25

30

35

40

Q2 2006 Revenue Volume Price Currency Q2 2007 Revenue

Volume growth offsetsnegative impact ofprice erosion and FX


2007 Revenue Target: Increased

This statement contains forward-looking information regarding Genesys Conferencing’s financial outlook, based oncurrent expectations and on the current value of the U.S. dollar to the euro. Actual results may differ materially andthe company may not update any forward-looking statements made in this press release.

100

110

120

130

140

Previous New

2007 Revenue Guidance

Strong adoption of Genesys MeetingCenter during the first half of 2007

€138 to€142

(in millions euros)

€143 to€145


Quarterly ConsolidatedIncome Statement

NANA16.6%15.1%EBITDA Margin

0.814.8%6.35.4EBITDA*

2.2215.7%1.2(1.0)Net Income

44.9%

2.8%

10.5%

NA

8.7%

2.1%

-2.7%

NA

-2.4%

-9.8%

5.1%

Variance%

1.1

0.6

0.1

(0.3)

0.7

0.2

0.0

NA

(0.5)

(1.3)

1.8

Variance€

3.62.5Operating Income

19.620.2Operating Expenses

0.60.6Amortization of Intangibles

1.21.1Research & Development

0.3-Restructuring Charges

7.48.1General & Administrative*

10.210.4Selling & Marketing

61.5%63.1%Gross Margin

23.222.7Gross Profit

14.513.2Cost of Goods Sold*

37.735.9Revenue

Q2 2007Q2 2006**IFRS –In million euros

2006* vs 2007

•Excluding stock based compensation** Q2 2006 excludes the previously reported non recurring items in the Q2 2006 earnings press release


2007 EBITDA Target

This statement contains forward-looking information regarding Genesys Conferencing’s financial outlook, based oncurrent expectations and on the current value of the U.S. dollar to the euro. Actual results may differ materially andthe company may not update any forward-looking statements made in this press release.

0

10

20

2006* 2007

2007 EBITDA Target

Consistent Revenue TrendsExpense containment

€20

(in millions euros)

€21 to€23


Summary Cash FlowStatement and Liquidity

10.06.4Net Cash

52.949.9Shareholder’s Equity

18.623.2Net Debt

June 30, 2007Dec. 31, 2006

As of,

(2.0)

(1.1)

4.3

2007

3 months endedJune 30,

(1.0)Net Cash Provided by (Used) in Financing Activities

(2.9)Net Cash (Used) in Investing Activities

3.3Net Cash Provided by Operating Activities

2006(in million euros)


Bank Waiver & Amendment:September 2007

• Objectives– Provide the company greater flexibility to explore various corporate financing alternatives

into 2008 and beyond the immediate credit capital market conditions

• Changes– Change Accounting Standard for covenants calculations from US GAAP to IFRS– Defer April 2008 principal payment (7.5 million) to October 31, 2008 (maturity)

– Total amount due at maturity is 18.5 million

– Covenants reset to reflect increase in interest costs and deferred principal– Ability to voluntarily pre-pay principal

• Terms– 150 bps fee on 28 million outstanding payable in three, quarterly payments– Increase in interest rate spread by 100 bps on November 1, 2007 and May 1, 2008

September 2007

Q2 2007 HIGHLIGHTS


The $4.0 billion conferencing and collaboration market is evolving from pure audio tointegrated multimedia and unified collaboration. Usage growth driven by enterprises needs for improved employee productivity, reduction in travel and

increasing need for ad-hoc meetings.

Audio still represents the largest share of the global conferencing market. Move to automated audio conferencing, and resulting commoditization, has resulted in significant price

erosion.

Web collaboration offers value-added functionalities and the ability to integrate with otherenterprise application and productivity tools. Expected to grow at a 31% CAGR through 2010.

Market Overview

Worldwide Conferencing Revenue($ in millions)

Web Conferencing Market($ in millions)

Source: Wainhouse Research Source: Frost & Sullivan

$0$500

$1,000$1,500$2,000$2,500$3,000$3,500$4,000$4,500

2005A 2006A 2007E 2008E 2009E 2010E

Attended Unattended Web

CAGR 5.6%

$584.5

$1,713.0

2006A 2010E

CAGR 30.8%


As corporate networks transition from legacy protocols to IP, their usage ofWeb-based applications accessed over the web increases. The consumer market adoption of similar Web-based applications, such as Skype, is an

indicator of this trend. Expected to accelerate adoption of enhanced Web-based applications, such as GenMC.

GenMC’s hosted platform benefits from the shift towards purchasingtechnology or solutions on a Software as a Service basis. GenMC is a hosted solution that can be accessed over a web browser and delivered from

the vendor’s media servers via a SaaS model that offers several benefits: Advanced communications tools with minimal upfront investment. Eliminates need for upgrades and maintenance by the customer. Rapid set-up and deployment. Service accessible from any device, anywhere, anytime. Flexibility and customization.

The demand for a unified and robust, multimedia IP communications solutionis increasing rapidly as devices and computers can more easily access an IPnetwork and perform more functions. Conferencing and collaboration constitute one of the core elements of Unified

Communications.

Emerging Industry Trends

IP

Network

SaaS

Unified

Communications


Multimedia Collaboration Services Distributed asSoftware as a Service

CustomersCross platform functionality.Unique no-installation.Rapid company-wide deployment.

GenesysIndependent from telecom pricing.Less commoditized.Faster time-to-market.GenMC 4.0 ideal platform for

transition.“One to many”scalability.

Applications accessed via webbrowser & delivered from thevendor’s servers.No conventional licensing fees.No deployment or maintenance

fees.

Industry StatisticsIDC projects SaaS to grow 26%

annually.Gartner Group predicts that by

2010, 30% of new software will bedelivered as SaaS.

Software as a Service Benefits for:


Genesys currently offers a bundled per-minute rate. Multimedia minute pricing is the most cost-effective for enterprises that utilize both audio and web

multimedia conferencing. As customers increase their usage of multimedia conferencing minutes, Genesys’s pricing model

has a clear competitive advantage.

The shift towards integrated communications and web-based collaborationprocesses leads to the adoption of the multimedia minute. Web conferencing is the fastest growing segment in the conference industry and is expected to

represent 24% of the market by 2010.

Genesys’s pricing model is highly flexible and adaptable to various pricingstrategies such as flat rate pricing, bundled and unbundled offers.

Genesys’s uniquely integrated solution generates a significant cost advantage. Traditional CSPs rely on third-parties to provide the expensive web portion. As customers transition to VoIP, GenMC will substantially reduce its variable telecommunications

costs leading to further pricing advantage.

Pricing Advantage


CurrentGenesys

Customer WebPenetration

Value Creation

Market Audio Only Avg. Price

Pricing Disadvantage Neutral Pricing

0

4

8

12

0% 3% 5% 10% 15% 20% 30% 50%

Web Penetration

Pri

cep

erM

inut

ein

Eu

roC

ents

Genesys Multimedia MinuteAvg. Price

62%Implied Cost Savingsfrom Using GenMC

Pricing Advantage

Implied Market Priceof Web and Audio (1)

(1) Web conferencing sold separately; average price is €0.20 per minute.


The Genesys Saas Value Proposition

No hardware or software to buyBecause we are an online service, there's no hardware or software to buy, to install (only a thin client) or

maintain. Minimal upfront costs are a key selling point for large enterprise customers.

Product enhancements with no extra cost and minimized effort.Upgrades and maintenance included and mostly without disruption.New features and capabilities normally without extra costs.

Rapid set-up and deploymentService can be set up to become fully operational almost instantly.Resources available and motivated to drive adoption.

Accessible from anywhereLeverage the power and flexibility of the internet to obtain anytime, anywhere access for remote workers –and outside

partners.

Unsurpassed supportTRUE Customer service and helpdesk in each region –not outsourced.Escalations to Tier 2, Infrastructure and Operations, SET and R&D.

Reliability, performance and security24x7 monitored to ensure 99.9X% availability.Secure technologies delivered top tier datacenters globally.

Flexible and customizableRich set of configuration and customization options using only a web browser.


“All in all, Genesys Meeting Center 4.0 -- withits new interface, faster meeting startup, andcomplete features for a flat fee -- is an excellentchoice for large enterprise customers.”

InfoWorld Magazine, November 9, 2006

“Genesys Conferencing –Secure,Global and Powerful”

Internet Telephony, November, 2006

Awards/Recent Industry Buzz


Awards/Recent Industry Buzz

“Welcome to online collaboration made easy, thanks to the no-nonsense, efficientinterface and feature depth found in Genesys Meeting Center”.

PC Today May Issue 2007

“If you're a telecom or conferencing manager who's tired of juggling multipleservice providers –Genesys has a solution”

Ferris research May 2007


Growth Strategy

Winning market share among Fortune 2500 companies Continue to expand sales channels and building strategic partnerships. Geographic expansion

GenMC is positioned to benefit from adoption of multimediacollaboration and VoIP. Market intensely to end users to increase penetration rates.

Leverage SaaS trend with new and existing customers. Companies of all sizes are moving towards SaaS models because of the quick

deployment, no software or hardware purchases, and no management ormaintenance.

ContinuousInvestment in

Sales

Web

Adoption

Saas

Model


Company Overview

Genesys SA is a leading provider of integrated multimedia (audio, web and video) conferencing andcollaboration services to large enterprises worldwide.

Genesys’s proprietary Genesys Meeting Center (“GenMC”) platform is the only multimedia collaborationservice whose voice capabilities are seamlessly integrated with its web services.

Key investment highlights include:

Proprietary Multimedia Collaboration Solution

Focused on Large Enterprise-Class Customers

Competitive Cost & Pricing Advantage

Experienced Management Team

Profitable Business Model with Substantial EBITDA Upside

Positioned to Benefit from Emerging Industry Trends

September 2007

Conclusion

September 2007

Questions & Answers

Technology

Microsoft PowerPoint - SFAF Presentation - Sept 18 2007 FINAL