As announced on 11 March 2008, full-year revenues for the 2007-08 financial year totalled €68.9 million, up +4.3% year-on-year or +8.5% at constant exchange rates. This organic revenue growth comprises moderate growth in the Licences business of +1.4% in real terms and +5.8% in volume, and very sound growth for the Services business of +16.3% in real terms and +20.0% in volume.

81% of revenues were generated outside France.

·         Improvement in operating margin at constant exchange rates

Operating profit came to €5.7 million or €6.6 million in volume, stable in real terms compared to 2006-07 but up +18% at constant exchange rates. Operating margin was therefore 9.3% at constant exchange rates and 8.2% in real terms. This more or less stable margin was a result of:

-          a significant impact of the unfavourable development of exchange rates which cut down the Group's revenues by €2.8 million;

-          a product mix effect on gross margin despite significant improvement in gross margin on Services activities;

-          continuing control of Research and Development costs, which represented 29% of Licences revenues compared with 30% in 2006-07, as well as general operating expenses (down 1.7%);

-          growth of 8.2% in sales and marketing expenses, in particular as a result of increased commercial investment in order to build up local teams.

·         Significant improvement in cash and operating cash flow

After interest expenses of €0.76 million, currency losses relating to the unfavourable development of exchange rates (in particular the US dollar and the Korean won) of €1.67 million and a tax charge of €0.88 million, attributable net profit was €2.3 million.

In parallel, ESI Group generated €3.4 million of cash, mainly as a result of improved management of its working capital requirement. Operating cash flow therefore increased significantly to €6.2 million. Available cash at 31 January 2008 stood at €13.1 million.

The Group's financial position remained solid, with an indebtedness ratio (long-term financial debt over shareholders equity) of 8.4%.

·         Synthesis

2007-08 was characterised by the continuing transition phase in the Licences business, while the Services business saw a strong growth. In addition, operational margin remained stable relative to last year but grew up by 18% in volume. The Group’s fundamentals remain solid. We have strengthened our financial position thanks to cash generation of €3.4 million and our strategy keeps being confirmed by the continuing roll-out of our solutions at major clients.

·         Outlook