Paris, 13 September 2005: ESI Group (FR0004110310), pioneer and world leading solution provider in virtual prototyping and manufacturing processes, today announced consolidated sales for the first half of the financial year, ending 31 July 2005.

Quarterly and first-half sales trend:

Fiscal year closed on 31 January

Note that Q2 and H1 figures do not factor in changes in the consolidation structure and therefore only reflect organic growth.

ESI Group's sales for the first half of FY2005/06 came to EUR 25.4 million, up 0.9%. Sales growth would have been 1.5% at constant exchange rates. Quarterly revenue is likely to show stronger seasonal fluctuations this year owing to postponed contracts, whose impact was particularly visible in the first quarter.

H1 license sales were up 1.9% (2.6% at constant exchange rates). Licenses continued to account for a high 77% of total H1 sales. Recurrent License revenue also remained at a satisfactory level of 77%.

Alain de Rouvray, Chairman and CEO of ESI Group, stated: "This performance reflects the successful integration of our acquisitions. Following 19% growth in H1-FY2004 (including 14% from acquisitions), ESI Group has managed to consolidate the new installed base and to maintain moderate organic growth. Conversion of the acquired activities to a business model based on annual licensing agreements is well underway. The slight dip in first-half Service revenue was due to termination of contracting agreements, mostly in the United States, whose impact was not fully offset by the coming onstream of the Excellence Centers and growth of jointly financed R&D projects."

International sales remained stable at 84% in the first half. The geographical breakdown of sales was as follows: Europe (48%), Asia (37%) and America (15%). Organic growth was especially strong in a contrasting European environment, with French sales soaring.

The free cash flow (IFRS) came to EUR 17.2 million on 31 July 2005, in line with management projections.

Alain de Rouvray concluded: "Visibility on the months ahead is high owing to steady organic growth, which is primarily driven by license sales. We are sticking to our annual growth and profitability objectives in view of significant postponed orders (particularly in Asia) and the signature of new contracts with large automotive and aviation customers."

About ESI Group

ESI Group is a world-leading supplier, and a pioneer of digital simulation software for prototyping and manufacturing processes that take into account the physics of materials. ESI Group has developed an extensive suite of coherent, industry oriented applications to realistically simulate a product’s behavior during testing, to fine-tune manufacturing processes in accordance with desired product performance, and evaluate the environment’s impact on product performance. ESI Group’s products, which have a proven track record in manufacturing and have been combined in multi-trade value chains, represent a unique collaborative and open virtual engineering solution known as the Virtual Try-Out Space (VTOS), enabling virtual prototypes to be improved in a continuous and collaborative manner. This integrated protocol allows all the company’s solutions to work with each other and with applications developed by independent software vendors. By significantly reducing costs and development lead times and enabling product/process synergies, VTOS solutions offer major competitive advantage by progressively eliminating the need for physical prototypes during product development. The company generated sales of circa €60m in 2004, employs almost 500 high-level specialists worldwide covering more than 30 countries. ESI Group is listed in Eurolist compartment C of Euronext Paris. For further information, visit www.esi-group.com.

ESI GROUP has been qualified as “an innovative company” since January 20 2000 by the ANVAR and is eligible for inclusion in “FCPI” (venture capital trusts dedicated to innovation).

Listed in Eurolist compartment C of Euronext Paris - Next Economy - ISIN FR0004110310 - FTSE 977- Bloomberg ESI FP - Reuters ESIG.LN

Virtual Try-Out Space® and VTOS® are registered trademarks of ESI Group. All other products, names or companies are the brands or registered trademarks of their respective owners.

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