• Significant upturn in the growth of Licenses new business
• Slowdown in Services due to the economic situation
• Increased seasonal effect for Licences

“First-quarter sales, traditionally relatively non-significant, reflect distinct economic influences: a fall in Services activity mirroring the trend observed throughout the sector, but a strong level of repeat business for Licence sales and a significant upturn in new business. At the current time, we are confident that we will record a good global performance this financial year”.

Alain de Rouvray, ESI Group’s Chairman and CEO

Financial years to January 31

NB:

• The period under consideration does not include any scope effect, with Mindware and Vdot’s activity consolidated within accounts from December 2008.
• As announced when FY’09/10 annual results were published, ESI Group has bolstered its presence amongst key accounts. Subsequently, like last year, the contribution of fourth-quarter, and hence annual, sales should increase and thus amplify the seasonal effect.

Sales for the first quarter of the current financial year totalled 15.9 million euros, down -2.9% in actual terms and down -3.7% by volume (constant exchange rates) compared to the first quarter of the previous year. The evolution of the geographical split in activity reflects the return to buoyant growth in Asia compared to Europe or the Americas, which are continuing to be affected by the economic situation. Europe thus accounted for 37% of first-quarter activity, the Americas for 20% and Asia for 43%.

Licence sales totalled 11.0 million euros, stable in actual terms and up +3.5% if we restate the first quarter of 2009/10 for a 0.4 million euros contract recorded in this quarter that was then debooked during the second quarter of 2009/10 because of the renegotiation of the perpetual licence into an annual licence. Following this restatement, the level of repeat business remains at a very satisfactory 83% of Licence sales, compared to 86% for the first quarter of 2009/10. It is worth noting that Licences saw new business jump +28.9%, thanks to the arrival of new clients and sales of new products to existing clients.

Given the difficult economic environment, and in line with trends observed throughout the sector, Services activity was down by -7.6% in actual terms and -7.7% by volume. Services were notably affected by postponed contracts due to budget deferments. This activity represented 31% of total quarterly activity, versus 32% last year. This trend is expected to stabilise over the second quarter.

About ESI Group
ESI is a pioneer and world-leading solution provider in virtual prototyping that takes into account the physics of materials. ESI 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 to evaluate the environment’s impact on performance. ESI’s solutions fit into a single collaborative and open environment for End-to-End Virtual Prototyping, thus eliminating the need for physical prototypes during product development. The company employs over 750 high-level specialists worldwide covering more than 30 countries. ESI Group is listed in compartment C of NYSE Euronext Paris. For further information, visit www.esi-group.com.

ESI Group
Corinne Romefort-Régnier
Tel: +33 (0)1 53 65 14 14
investors@esi-group.com

NewCap.
Emmanuel Huynh
Axelle Vuillermet
Tel: +33 (0)1 44 71 94 94
esi@newcap.fr