Paris, 8 June 2005: ESI Group (FR0004110310), pioneer and world leading solution provider in virtual prototyping and manufacturing processes, today announced its consolidated sales for the first quarter of the current fiscal year (three months ended April 30 2005).

Fiscal year closed on 31 January

Q1-2005 sales came to € 13.5 million, stable in volume and down 1.3% including a negative currency effect. License revenue came to € 10.5 million, up 0.9% in volume.

This almost flat result reflected a combination of several phenomena, including:

• Waning impact of orders carried over from the previous year, smoothing annual license revenue,

• Switch (particularly for newly acquired entities) to a business model based on annual licensing agreements and recurrent revenue as opposed to growth magnified by perpetual licenses,

• Postponed deployment of 2G solutions and strategic projects due to investment delays.

As a result, the license renewal rate was similar to the rates recorded in previous periods.

New Business succeeded to go up by 4% despite the increased base effect created by last year's extension in consolidation structure.

The breakdown of sales between Licenses and Services remained unchanged. License revenue accounted for 78% of total sales, compared with 22% for Services.

The available cash position (IFRS standard) on April 30 2005 amounted to EUR 22.4millions.

Alain de Rouvray, Chairman and CEO of ESI Group, stated: "Although not representative of annual performance due to seasonal fluctuations, Q1-2005 revenues were affected by the base effects and a contrasted economic environment. The first quarter nevertheless saw a significant 9% improvement in Europe, including a higher-than-expected 12% increase in License revenue. By contrast, first quarter revenues in the American and Asian zones lagged somewhat, but are expected to catch up this year."

About ESI Group

ESI Group is a pioneer and world-leading provider of digital simulation software for prototyping and manufacturing processes that take into account the physics of materials. ESI Group has developed an entire suite of coherent, industry oriented applications to realistically simulate a product’s behavior during testing, to fine-tune the manufacturing processes in accordance with the desired product performance, and to evaluate the environment’s impact on product usage. 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, virtual engineering solution, known as the Virtual Try-Out Space (VTOS), enabling virtual prototypes to be improved in a continuous manner. By drastically reducing costs and development lead times, VTOS solutions offer major competitive advantages by progressively eliminating the need for physical prototypes. ESI Group is listed in Eurolist Compartiment C of Euronext Paris by Eurolist, and generated sales of €60m in 2004. The company employs almost 500 high-level specialists worldwide, and covers more than 30 countries. 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 by Eurolist - 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.