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2006/07 Interim numbers

& Outlook

SFAF Meeting

- 15 November 2006 -

Bernard HUVÉ CEO

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SII at a glance

SII is present on the market of technology consulting- Outsourced R&D, engineering and systems integration & telecoms- Presence in France + subsidiary in Poland

A long-lasting company: 27 years of profitable growth (founded on 1 April 1979) 2005/06 sales: €105.7m (+21.6% of organic growth) 2005/06 operating margin: 10.1% Financially sound (IFRS) 31/03/06: Net cash €14.4m; Shareholders’ capital €34.2m

1 800 employees at 31 October 2006 (+23%)- Of which 80% engineers BAC + 5- A strong technical culture and client service

Value creation: 2005 ROCE (after tax) = 35.6%- A flexible organisation, decentralised, reactive- Stringent management on a day-to-day basis

ID card

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SII’s services

Outsourced R&DR&D Consulting

Studies and implementationProcessing, industrialisation

66%

Systems Integration, Networks & Telecoms

Third partymaintenance

33%

Development consulting

87%

Project management assistance

5%

Other and non IT

8%

SII at a glance

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Strasbourg

Sophia

Vélizy

Sannois

Lille

9 agences10 offices

Toulouse

Bordeaux

Nantes Tours

Le MansBrest Rennes

Caen

Lyon

MontpellierLa Ciotat

Aix0-100 Lille, Strasbourg, Warsaw

> 100 Aix, Rennes, Nantes Sannois, Sophia, Toulouse, Vélizy

Export 1%

Province63%

Ile de France

36%

Geographical breakdown of sales

Lannion

Niort

National geographical footprint – subsidiary in Poland

SII at a glance

1 subsidiary

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A loyal clientele with major accounts

Major accounts 95%, SME 2%, Other 3%

20 top clients = 67% of sales- SII’s strategy: quality of service

- SII’s positioning: mixed teams – long and recurrent projects dual expertise: IT and functioning

- Client strategy: listings and discounts on sales, pricing pressure, requests for projects with

earnings commitment

SII at a glance

Amadeus EADS Gemalto Sagem Thales

DCN France Telecom IBM Siemens Thomson

TOP 10 CLIENTS

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Banking, Insurance 5.9%

Sales breakdown / client sector

Industry 58.9%

Telecom and Media 15.5%

Transport , Tourism, Services 6.8%

A few new clients 2006

AIR liquide CSEE Transport PROSODIE

NEUF Telecom VALÉO

SII at a glance

Utilities 2.9%

Other services 6.3 %

Public services 3.3%

Sales by sector of activity Industry breakdown

Electronics 30.3%

Automobile 20.0%

Aerospace 14.7%Defence 13.2%

Digitial TV

9.5%

Payment systems 6.7%

Other 4.6%

Commerce,

Retail 0.4%

Railways 1.0%

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Gaining strength of fixed-rate services Commitment to achieving earnings rather than supplying means Outsourcing Global contracts vs specific skills

Sales by contract

Changes in contracts

SII at a glance

Technicalassistance

73.3%

Other 7.9%

Fixed rate 18.8%

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Summary

H1-2006/07

Sustained profitable growth – SII on the stock market

2006/07 Outlook and targets

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Durable growth drivers- Product innovation, a factor of company competitiveness- Sustained growth in outsourcing (Flexibility / Technological complimentarity)- The taking off of built-in IT

Technology consulting, a buoyant market

Technology consulting€5bn

Outsourced IT R&D, software & ITand technical services

H1-2006/07

Source : Syntec Informatique 17 octobre 2006

Technology consulting outperforms the L&S sector

H1-2006 growth: 8% vs 6.5%

L&S sector(Syntec Informatique structure)

€21bn

10* Source : Syntec Informatique 17 octobre 2006

Return to buoyancy

-5

0

5

10

15

20

88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

GDP L&S Investment

Growth founded on a recovery in IT investment- Projects reappear- Growth mainly driven by volumes and rarely by prices- Durable growth triggers (globalisation, competition, retirement boom)

But a tightening labour market- 65% of companies say they have difficulties in recruiting*- A greater turnover in the IT sector- Salary pressure

H1-2006/07

Growth in %

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1 company, 9 profit centres - Low indirect rates (10.1%), despite decentralisation- Entrepreneur managers- Reporting in (virtually) real time

A quality approach at the heart of the strategy- One of the first IT services companies to obtain the ISO9001 certificate in 1992- One of very few IT services companies to be certified for 100% of its activity- A very advanced CMMi approach

Attributes of an average-sized player- Decentralisation / Responsibility- Commercial buoyancy- Local services with clients- Huge reactivity

SII outperforms technology consulting

SII +21% in H1-2006/07 vs Technology consulting +8%*

* Source : Syntec Informatique 17 octobre 2006

H1-2006/07

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41.2

48.4

58.7

H1 2004 H1 2005 H1 2006

SII: Sustained growth

A buoyant first halfQ1 sales €29.61m, +21.3 %Q2 sales €29.13m, +21.3 %

+17.6%

Sales in €m+21.3%

H1-2006/07

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102 107 108 118 140 173

942 9981059

12101297

1531

0

200

400

600

800

1000

1200

1400

1600

1800

2001 2002 2003 2004 2005 S1 2006

Productive headcount

Indirect

Average headcount

Recruitment trends

HR efforts in line with the strategy- Recent recruitments: 347 engineers (target: +700 engineers in 2006/07)- Huge capacity to recruit: school presence, dedicated in-house teams, enterprise culture,

cooptation- Turnover: 23% - Salary pressure

H1-2006/07

14

0

1

2

3

4

5

6

avr-0

4

juin-

04

août

-04

oct-0

4

déc-

04

févr

-05

avr-0

5

juin-

05

août

-05

oct-0

5

déc-

05

févr

-06

avr-0

6

juin-

06

août

-06

Inter-contract ratio (SII terminology) = (Billable-Billed) / Billable

Controlled inter-contract rates

In %

H1-2006/07

H1 2005/06 average4.3%

H1 2006/07 average5.2%

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Billable days Q2 Q3 Q4 Q1 Total

2004/05 62 65 64 63 254

2005/06 63 64 63 65 255

2006/07 60 63 63 64 250

An unfavourable first half

A penalising 2006/07 timetable regarding sales- Fewer billable days (250!)- A first half (civil year Q2) with only 60 billable days- A base of comparison focused on SII’s first half

A huge temporary impact on profitability- Employees with 35 days of fixed holiday per year (25+10 fixed flexi days)- A direct impact on profitability (3 / 63 = 4.8% on Q2)- An impact spread over 2006/07 (5 / 255 = 2.2% over the year)

H1-2006/07

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+ Commercial buoyancy (organic growth = +21%) – Slight increase in the inter-contract rate – Higher average salary > Increase in selling prices– Impact from n° of trading days on sales and above all on profitability

2006/07 Q2 Q3

Sales (€m) 29.61 29.13

2005/06 (in %) +21.3 +21.3

Op. margin (in % of sales) 6.2% 10.2%

Att. net profit (in % of sales) 4.3% 6.6%

Average headcount in quarter 1678 1733

In summary

H1-2006/07

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Sustained profitable growth

H1-2006/07 numbers

Financial structure

SII shares

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0.68

47.2

Sales€58.74m +21.3%

In €m

Consumed purchases

PayrollTaxes

4.9

1.7

Provisions

Sustained profitable growth

Other income and expenses

0.61

€4.83m -10.7%

Op. profit

Huge payroll = 80.4% of sales (vs 76.6%)- 4-day delay in billing- Average salary +2.5%

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C L Ô T U R E A U 31 M A R S

Profit and loss account

Sustained profitable growth

In €m

H1-06/07

IFRS

H1-05/06

IFRS

Sales 58.74 48.43 +21.3

Operating profit 4.83 5.41 -10.7

in % of sales 8.2 11. 2

Financial products 0.11 0.21 -

Tax 1.73 1.94 -

Att. net profit 3.21 3.68 -12.8

in % of sales 5.5 7.7

Average headcount 1704 1346 +26.6

Headcount at end of period 1755 1422 -

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Cash flow capacity

Change in WCR

Investment

Financing (incl. dividends)

Cash flow

Available cash

H1-2005/06

Cash flow table

Share transfers

In €m

Net cash

3.50

-0.60

-0.30

-1.50

-2.40

-4.10

-1.80

-4.20

H1-2006/07

Sustained profitable growth

4.20

2.00

-0.90

-0.80

0.30

-2.20

-1.00

-0.70

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Financial structure

In €m

Sustained profitable growth

IFRS30/09/2005

Fixed assets3.4

WCR12.0

Cash16.3

Shareholders’capital

31.1

Fixed assets 0.6

IFRS30/09/2006

Fixed assets5.9

WCR18.9

Cash10.2

Shareholders’ capital

34.5

Fixed assets0.5

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Shareholders’ structure

Personnel and fund 4.54%

Free float 30.61%

Management 56.42%

Treasury shares 8.43%

3 000 000 shares

SII shares

Source : SII

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Technology consulting (Akka, Assystem, Alten, Altran, Ausy)

Eurolist (C)Code ISIN : FR0000074122

EuroNext segment NextEconomy / SBF 250 – Small 90

Stock-market performance

SII shares

Source JCF Quant

SII

20

25

30

35

40

45

50

55

T42003

T12004

T22004

T32004

T42004

T12005

T22005

T32005

T42005

T12006

T22006

T32006

T42006

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2006/07 Outlook

SII strengths

2006/07 targets

SII outlook

Sector outlook

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Sustained demand

Continued investment in companies- Catching up with underinvestment in the past

- Technological innovation, distribution of in-built electronics

- Renewal of IT systems

- Multiplication of projects (smaller but more frequent)

Growing outsourcing- Retirement boom

- Refocusing on the core business

- Increasingly complex projects

2006/07 Outlook

Today’s challenge: recruitment - Conserve criteria of quality and profitability

- SII: 700 engineers forecast in 2006/07 (half for turnover, half for growth)

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Margins under pressure

Virtually stable reference prices- Pricing power on the demand side

- Overcapacity of the offering, dumping of small players

- Clients looking for savings

- Indirect pressure from offshoring

Selling price – cost price scissor effect- Pressure on salaries

- Shortfall of certain profiles

Problem of billable days- H2-2006/07 virtually stable in relation to 2005/06 (-1 day)

- 252 days in 2007/08

2006/07 Outlook

Billable days Q2 Q3 Q4 Q1 Total

2005/06 63 64 63 65 255

2006/07 60 63 63 64 250

2007/08 61 64 64 63 252

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Constantly looking for improvement

SII proactive regarding profitability

Continued rigourous management- Reduced functioning costs- Indirect rates under pressure

Nearshore intervention capacity (Poland)

Growth / profitability arbitrage- Intention to not enter into a deflationary trend…- … which could lead to a refusal of missions

The real challenge: improvement of production processes- The possibility of work packages- The CMMi

2006/07 Outlook

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The advantages of the CMMi model

Necessity to improve the management of complex projects- Clients require an increasing number of services to commit to earnings

- Additional risks… (exceeding budgets, changes) - …but opportunities to gain margins in certain conditions- Necessary discipline to control projects and optimise teams and expertise

Against this backdrop, quality insurance and CMMi valued processes are solutions adapted to the integration of IT systems.

2006/07 Outlook

Advantages for SII- Traceability, capitalisation and

reproductibility- Better management of employed

resources- Proposals for hybrid contracts- Reduction and control of unknown

Advantages for clients

- Better defined interfaces (quality) - Repeated follow up and deliveries- Platform development (outsourced services for the

supplier)

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Early implementation of the CMMi model

This valuation backs SII’s level of quality- Process mastered and standardised throughout the company

- Development planned and assessed- Corrective forecasts and actions- Collective capitalisation and valuation (expertise, methods, tools and metrics)

2006/07 Outlook

Certified service sites (at CMMi level) SII Aix-en-Provence (3) Silogic Toulouse (2)

AXLOG engineering (3) SII Sophia Antipolis (2) SQLI Toulouse (2)

Cap Gemini-Paris Accelerated Delivery center (2)

SII Toulouse (2) Steria Midi Pyrénées (2)

SII the most advanced players in this approachAt 4/09/2006 – official list of the SEI relative to valued French IT services companies*

i.e. for SII: 1/2 sites at level 3 and 2/6 sites at level 2 (at 4/09/2006)

SII’s target:

December 2006: Nantes (2) February 2007: Rennes (2)

End-2008: all agencies committed to generating earnings will be at level 3

* Sources: http://seir.sel.cmu.edu/pars/pars_list_iframe.asp

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2006/07 Outlook

1. Limited risksClients: large accounts, loyalHistorical and technoligical background Persisting quality insurance

2. Basic functional model One company, multiple profit centresDecentralised structure and localised servicesEnterprise culture: Technical and Services

SII’s strengths – Still the same!

3. Sound balance sheetSteady cash generationSatisfactory cash balanceNo financial debt

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2006/07 Targets

Assumptions regarding the business climate Sustained demand

6-8% of growth according to IT Syntec3 times growth forecast for GDP

Margins under pressure2006 prices = 2005 prices + ε +0% (a little better in 2007?)

SII’s targets* Sales growth of around 20% (€125m-130m) Operating margin down (9-10%) 2,000 salaries at 31 March 2007 (net creation of 350/400 jobs)

Confirmation of targets from May 2006 *

* Réunion SFAF du 17 mai 2006

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Upcoming meetings

Q3 earnings: 14 February 2007

Full-year earnings and SFAF meeting: 16 May 2007

2006/07 AGM: 20 September 2007