Econocom RA2006 GB...4, rue d’Arlon 8399 Windhof Tel.: 352 39 55 50 Fax: 352 39 55 88 The...

www.econocom.com

2006Annual report

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Econocom addressesBelgiumClos du Parnasse, 13AB1050 Brussels

Parc HorizonLeuvensesteenweg 510, bus 801930 ZaventemTel.: 32 2 790 81 11Fax: 32 2 790 81 20

France42-46 rue Méderic 92582 Clichy CedexTel.: 33 1 47 56 37 00Fax: 33 1 47 31 03 00

GermanyFriedhofstrasse 1363263 Neu-Isenburg Tel.: 49 6102 88 483-0Fax: 49 6102 88 483-1

ItalyVia Giorgio Stephenson n.43/A20157 MilanTel.: 39 02 39030411 Fax: 39 02 39030400

Luxembourg4, rue d’Arlon8399 WindhofTel.: 352 39 55 50Fax: 352 39 55 88

The Netherlands Kokermolen 11 3994 DG Houten Tel.: 31 30 63 58 333 Fax: 31 30 63 58 300

SpainC/Josefa Valcarcel, 4228027 MadridTel.: 34 91 411 91 20Fax: 34 91 563 92 33

United Kingdom18-20, Kew Road,Richmond Surrey TW9 2NATel.: 44 20 8948 83 77Fax: 44 20 8948 84 81

www.econocom.com

Board of Directors

Jean-Louis BouchardChairman and CEO

Charles de Water

Christian Bret

Gaspard Dürrleman

Rafi Kouyoumdjian

Jean-Philippe RoeschCEO

Patrik VandewalleCEO

Group Management Committee

Jean-Philippe RoeschCEO & Chief Financial Offi cer

Patrik VandewalleCEO & Chief Operating Offi cer

Didier BerthoManaging Director, Managed Services and Products and Solutions, France

Jürgen HeymanManaging Director, Managed Services and Products and Solutions, Benelux

Bruno LemaistreManaging Director, Financial Services

Frans Van GilsManaging Director, Financial Services, Netherlands and Germany

Statutory Auditors

PricewaterhouseCoopersReviseurs d’entreprises SCCRLrepresented by Emmanuèle Attout

Patrik VandewalleJean-Philippe RoeschRafi KouyoumdjianGaspard DürrlemanChristian BretCharles de WaterJean-Louis Bouchard

CONTENTS

1 • Group Profi le

2 • Interview with Jean-Louis Bouchard, Chairman of Econocom

4 • Key fi gures

6 • 2006 Highlights

10 • Econocom’s strategy

12 • Econocom’s service offerings

16 • Some of Econocom’s European clients

18 • Thales

20 • Belgian Finance Ministry

22 • Renault

24 • Electrabel

26 • INSEAD

28 • Telenet

30 • t for telecom

32 • Informática El Corte Inglés

34 • FJH

36 • Gabetti

38 • The BSS Group PLC

40 • Econocom Group share performance

Econocom Group Board Members

Annual Report 2006 1

Econocom is a European services group that has specialized for the past 25 years in the management of IT resources for businesses. In 2000, the group extended its expertise to include telecommunications infrastructures.

*Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Spain, the United Kingdom.

Based in Europe*, Econocom draws on the experience and know-how of its 2,200 employees, including 1,600 engineers and technicians, to design and implement tailored outsourcing services focused on the management of corporateIT and telecommunications assets.

The services offered by Econocom include consulting, procurement, fi nancing, equipment maintenance and facilities management.

By turning to Econocom, companies fi nd they can improve the quality of services delivered to end users and drive down IT and telecommunications costs.

Econocom Group is a member of Euronext’s Next Economy index.

Its shares are listed on the Premier Marché of Euronext Brussels.

2 Annual Report 2006

• 2007 is going to be a year of challenges for Econocom. Do you think that the Group will achieve its stated objectives?

2007 is, indeed, a defi ning year for Econocom. It marks the fi nal year of the Share Five strategic plan initiated in 2003 to regain leadership through innovation in fi nancing, distribution and IT services.Since the plan was launched, Econocom has responded to changes in the IT services market by emphasizing innovation, particularly in the fi eld of Telecom Services. We have regained leadership in Financial Services, thanks to the launch of high value-added products like TRO (Technology Refresh Option). We have likewise restored our dominant market share in Products & Solutions by rolling out our variable-cost business model across activities. Regarding the achievement of quantitative objectives, Econocom’s 2,200 employees are all committed to ensuring that the Group achieves an operating margin close or equal to 5% by the end of 2007.I believe that this objective is within our reach and that if we meet it, we will have shown our business partners and the investment community that Econocom can achieve an operating margin worthy of a computer services fi rm. This should benefi t Econocom Group’s share price and provide a boost to our future development.

• 2007 also marks the 25th anniversary of the establishment of Econocom in Belgium. How do you feel about that?

I am very attached to Belgium. It is where Econocom’s operations began and where the Group is listed.In our fi eld of business, which sees a large number of companies come and go every year, Econocom Group has lasted 25 years. This longevity is not only proof of the great deal of experience behind it. It also denotes an age at which a company is still young and full of vitality and ambition – as is the case, I believe, for Econocom today.

• What do you see as the key events of 2006?

For Econocom, 2006 was fi rst and foremost the year in which we returned to organic revenue growth, which came in at 7% over the full year.We also continued to develop our telecom business through the acquisition of Avenir Telecom’s Business Services division in France and the conclusion of a partnership with Proximus in

Belgium. Our Telecom business now has the scale to operate on a self-sustaining basis, and its contribution to earnings can be measured accurately. Econocom has also gained the skills to develop truly leading-edge telecom services.In early 2006, A2Z, our services subsidiary for the SME segment, had trouble fi nding its stride so restructuring measures had to be taken. We have lowered A2Z’s operating costs and the subsidiary, now operating only in Belgium, is profi table. The contracts signed at the beginning of 2007 demonstrate that A2Z’s offering is the right one for its target market segment.We continued to focus on cost savings and productivity enhancement during 2006 and our Slim Fast + plan is delivering benefi ts.

• What are Econocom’s particular strengths in the highly competitive and constantly changing IT and telecom services markets?

Our principal strength is our capacity for innovation, combined with a 25-year history of fruitful client relationships. Listening to clients helps us to innovate and provide services that truly address their needs. We can then replicate this innovative service response for other companies and organizations with similar requirements.We also hold front-ranking positions in Europe in fi nancing, distribution and telecom services. Econocom is the no. 2 player in Europe in IT and telecom fi nancing solutions, which we provide independently of banks and other fi nancial institutions. In the distribution of IT products and solutions, our business model, which is based on an outsourced supply chain and variable selling costs, has made Econocom one of the very few profi table players. In corporate telecom services, the Group has carved out a large share of the market in the space of just a few years.

• What about IT outsourcing?

Competition is cutthroat, but Econocom is still in the race.Our offering comprises consulting, outsourced management of distributed infrastructure and day-to-day maintenance. Our consulting subsidiary, Synopse, has been the leader in France and in the Benelux countries in ITIL (Information Technology Infrastructure Library) services since the February 2007 acquisition of Kentron, ranked second in the French market. We also recently strengthened our position in maintenance in France by acquiring Alliance Support Services.

Interview with Jean-Louis BouchardChairman of Econocom


Econocom’s IT outsourcing expertise is most striking when we really step off the beaten path. This is precisely what we did, for example, when we designed turn-key services for Belgium’s Finance Ministry, which in 2006 outsourced the management of 25,000 printers and subsequently of 65,000 iMacs to Econocom (the “Papyrus” and “My PC” projects, respectively). Of course, such new turn-key services will be offered to other companies and government departments.

• What has diversifi cation into telecom done for Econocom?

We started out by setting up a small telecom business in 2000. Over time, we have built up knowledge of the telecom sector, whose competitive dynamics are quite different from those of IT operations.We have stepped up our presence in telecom over the past two years through a number of acquisitions and now have dual expertise in IT and telecom, a rare proposition in the corporate services market. As a result, Econocom is particularly well placed to manage IT and telecom convergence projects – just when such convergence is becoming a reality for businesses. Econocom represents exactly what companies faced with this type of technological and organizational challenge need: a partner with complete mastery of all the technical, operational and budgetary imperatives associated with IT/telecom convergence.

• Why has Econocom centered its development on fi nancing?

Because companies increasingly manage their distributed IT architecture (PCs, printers, servers and networks) and telecom infrastructure much like they manage their vehicle fl eets. Vehicle fl eet leasing was originally motivated by fi nancing needs, but has now become a management option embracing a wide array of services: vehicle selection and provision, maintenance, day-to-day management (vehicle replacement in the event of breakdown, etc.) and vehicle insurance. All this service content is covered by a single, monthly fee. This means that companies can keep close track of their fl eets at all times and control related expenses, with the knowledge of exactly how much each vehicle is costing them. They are also free to choose whether to purchase vehicles or turn them back in.Econocom applies this simple and effi cient approach to the management of corporate IT and telecom infrastructure.

This enables corporate IT and Finance executives to monitor such infrastructure with rigorous accuracy, at a level consistent with sound business management.

• Econocom has already made three acquisitions since the beginning of 2007. Are others in the pipeline?

The three acquisitions carried out in the fi rst quarter of 2007 demonstrate our aspiration to leadership in the market segments that we serve. We emphasize the building of know-how and coverage in markets where we are already present, with a view to providing an ever better response to clients’ needs.

• What are Econocom’s ambitions for the coming years?

The world economy is at the dawn of a new technological revolution: total mobility.

Total mobility means making sure that a company’s or organization’s employees have the information necessary to do their work in real time and beyond existing physical boundaries. It is about making information available instantly anytime, anywhere, thanks to high-speed communication networks. We at Econocom are convinced that total mobility is going to revolutionize the way in which people work, just like PCs and mobile telephony have done.Companies will be forced to rethink their organization to factor in mobility. IT departments will have to take a fresh look at their applications without compromising data transmission security. Econocom has the advantage of facing a revolution for which it masters the key components. We aim to anticipate the associated challenges and become a leader in total mobility services, fi rst in France and Belgium, then in all of Western Europe.

We are going to construct a strategy that will position us to play an instrumental role in bringing total mobility to companies.

The Group is committed to making mobility accessible to all clients in a highly fl exible and scalable manner worthy of the description “Econocom, Mobility on Demand”!

“We are going to construct a strategy that will position us to play an instrumental role in bringing total mobility to companies.”

000,0Key fi gures

2 ,196 employees

Value added by activity Employees as of December 31, 2006

2004 2005 2006

Consolidated revenue 602.4 550.9 589.8

Operating profi t 17.8 19.0 16.5

Net profi t Group share 13.4 14.2 10.2

Condensed income statement(in € millions)

30%Financial Services

15%Products and Solutions

48%Managed Services

7%Telecom

Revenue by activity(in i millions)

€590 million

602.

4

299.1 247.8

96

183.9187.6198.3

101.4

100

Telecom

Managed Services

Products and Solutions

Financial Services

Holding 31

Agents 154

Financial Services 155

Products and Solutions 98

Managed Services 1,638

Telecom 105

Econocom Enterprise Solutions 15

Total 2,196

2005 20062004

279.8

22.4

17.8

550.

9 589.

8

9



€16.5 million

19.0

Operating profi t (in € millions)

17.8

16.5

2005 20062004

€88.3 million

Shareholders’ equity as of December 31 (in € millions)

88.1

83.5 88

.3

2005 20062004

43.3

€53.4 million

Cash net of long-term debt as of December 31 (in € millions)

42.2

53.4

2005 20062004


2006Highlights


Managed Services Maintenance FranceEconocom acquired Alliance Support Services, one of the French leaders in third-party maintenance, with 450 employees. The company’s key strength is the dense coverage of mainland France provided by its 31 regional branches.January 2007

ITIL Consulting and Services Synopse, Econocom’s consulting arm, strengthened its position with the acquisition of Kentron. Synopse Consulting is the leader in IT governance and IT systems and services management consulting in the French and Benelux markets with some sixty specialized consultants.

Synopse provides a unique ITIL service offering encompassing training, consulting and solution delivery.The merger in early 2007 of Synopse and Kentron, its main rival in France, will allow Econocom to increaseits market share.

Synopse’s clients include companies such as Air France, EDF, Essilor, Fortis and MMA, the Belgian Federal government and RATP. February 2007

Strengtheningour leadershipEconocom’s growth ambitions in Europe were underpinned by acquisitions in 2006 and the fi rst quarter of 2007.

TelecomAvenir TelecomAvenir Telecom sold Econocom its “B-to-B” operations comprising 31,000 lines drawn from a client base of large public- and private-sector corporations as well as SMEs.This makes Econocom a major player in mobile telephony services in the southeast of France.July 2006

The Phone House FranceEconocom consolidated its position as leader in the telecommunications services market with the acquisition of the B-to-B division of The Phone House. This division, which employs 21 people, manages some 20,000 lines and provides facility management services for 12,000 lines. Its client base is mainly made up of large companies based in the Paris region.February 2007

Financial ServicesGermanyAlbis and Econocom signed an agreement to raise Econocom’s stake in the joint venture Econocom Albis in Germany from 65% to 100% effective as of September 1, 2006.September 2006


Innovatingfor our clients

Printing solutions:the Papyrus offeringDeveloped by Econocom, this offering involves outsourcing the management of printers, including services such as maintenance, consumables management, help desk and asset optimization, which are billed on a cost-per-page basis.January 2006

Financial Services

Air Traffi c Control (ATC) Lease and Multimedia LeaseFollowing its Edulease, Medlease and Gemlease offerings, specially designed for the education, healthcare and public sectors, Econocom Financial Services introduced two new solutions targeted mainly at the Dutch and German markets: ATClease for the aeronautics sector and Multimedialease for the media market.Spring 2006

TelecomMobileasy by EconocomWith its comprehensive Mobileasy offering, Econocom Telecom assists companies at each stage of their mobile telecommunications equipment procurement process:• identifi cation of needs;• large-scale integration and rollout of corporate

data-voice solutions;• user help desk;• administrative management of equipment, lines and

users;• analysis and optimization of subscription contracts and

operator invoices;• fi nancing solutions (equipment, subscriptions, integration

and support services);• mobile and PDA insurance.March 2006

Products and SolutionsOrdiMobil and OrdiClassEconocom teamed up with HP and Fujitsu Siemens to launch OrdiMobil and OrdiClass in France. These two new offerings address current needs in the education sector by combining IT equipment procurement, rollout, user support and fi nancing.June 2006

Econocom continues to develop new packaged offerings to meet its clients’ latest needs.

Highlights2006


ProximusProximus, Belgium’s leading mobile telephone operator, chose Econocom as its partner to handle the management of its cell phone assets. Under this partnership, Econocom was managing reporting services for over 40,000 cellular lines by year-end 2006.April 2006

HPEconocom Products and Solutions France was named HP’s leading French partner and its number three European distributor in the “growth and loyalty” category. Econocom Products and Solutions Belgium & Luxembourg was awarded “2006 preferred partner” status by HP.September 2006

MicrosoftEconocom obtained Microsoft Services Provider License Agreement (SPLA) Reseller status, thereby becoming the leading SPLA reseller operating independently from IT manufacturers in the Belgian and Luxembourg markets.October 2006

EstablishingstrategicpartnershipsDistinctions

France: CRN ranks Econocom as top IT providerCRN has awarded Econocom the title of best IT provider in France. The Group ranks first out of 100 players in the general and printing solutions categories and second for mobility and servers.April 2007

Belgium: Econocom the preferred partner of Belgian companies according to Morgan ChambersIn its 2007 Service Provider Performance Study, Morgan Chambers lists Econocom among the preferred outsourcing service providers of Belgian companies. This annual study evaluates 300 outsourcing agreements entered into by 120 Belgian companies. Econocom was ranked first for customer relations management, risk management and cost management.April 2007


Strategy

Econocom, the service providerfor IT and telecommunications convergence projects



Econocom has several strengths that differentiate it from other IT and telecommunications service providers:• 25 years’ expertise.

• A comprehensive offering focused on IT and telecommunications infrastructure management.Econocom has developed a range of specialized services from consulting, procurement and financing to maintenance and facilities management.

• Financing solutions that allow combined equipment and services billing.Econocom is the second largest IT financing provider in Europe and has developed administrative management services around financing.

• A presence in Europe ensuring high quality and accessible service.

• Independence from PC manufacturers, software developers, telecom operators and banks.

• Continued commitment to improving service quality.Econocom ensures high standards of service by entering into binding quality commitments under Service Level Agreement and Service Level Management clauses. This guarantees tighter monitoring of and continued improvement in the services provided.

Companies and organizations that turn to Econocom succeed in:• Improving the quality of service offered

to internal clients;

• Retaining control of their IT and telecommunications resources;

• Keeping costs down using tools developed by Econocom.

A technological environment conducive to outsourcingFor companies and organizations, managing IT infrastructure (desktops, laptops, printers, servers, software licenses) also means providing integrated solutions for using and managing an increasing number of mobile communication devices (PDAs, mobile phones, linked laptops, etc.).

Today, more and more people in companies use mobile platforms on a daily basis, allowing them to be as effective on the move as at the workplace.

Total mobility is now a reality.

It entails the delivery of complex business applications permanently linked to the company’s information system.

The widespread use of mobile platforms is a challenge for companies because:

• IT and telecommunications infrastructure has to be available and operational around-the-clock;

• Remote information exchange makes it necessary to have secure data transfer systems;

• User support is vital.

Against this backdrop, companies are under greater pressure than ever to contain their IT and telecommunications costs through outsourcing of various services.

To optimize the management of their IT and telecommunications

resources, companies need to turn to a specialist that has successfully

developed a complete range of distribution, facilities management

and fi nancing services.

Econocom’sserviceofferings

Econocom’s business is to facilitate management of the IT and telecommunications assets of companies and organizations, including PCs, laptops, PDAs, printers, servers, GSM services, software licenses and storage devices.



Econocom partners with companies seeking to fully or partially outsource the management of their IT and telecommunications resources.

Econocom’s Managed Services offering provides a full array of services focused on:

• consulting: the development of ITIL services helps IT management to support their general management and procurement teams in implementing methods and processes;

• modular and versatile distributed infrastructure management contracts, ranging from staff allocation for sporadic needs to three- to fi ve-year managed services contracts;

• first, second and third level help desk services;

• remote supervision and management;

• integration;

• rollout;

• maintenance.

Econocom has developed a comprehensive range of services

related to IT and telecommunications product lifecycles as well

as to the operation, administration, management and fi nancing of

distributed infrastructure.

Managed Services The managed and support services offered by Econocom address the needs of companies and organizations looking for effective solutions to their various workstation needs,such as advice, system integration, rollout, user support, facilities management, etc.


FinancialServicesEconocom ranks among the leading European providers of corporate IT and telecommunications leasing solutions.

In financing services, IT and telecommunications asset management has increasingly become an imperative for businesses that require tailored hardware and software upgrades while keeping a tight rein on budgets and reducing costs.

This explains the success of our TRO (Technology Refresh Option) solution, which allows clients to keep pace with changing needs and technologies without any increase in costs by adapting the life-span of hardware on demand.

Econocom’s financing solutions are underpinned by efficient administration and customized service. Our Master IT solution enables companies to switch from basic management to complete command of their IT and telecommunications resources with the help of customized web-based tools that provide accurate real-time tracking of IT resources.

Products and SolutionsIT products have become a commodity. That is why for its distribution business Econocom has adopted a variable cost business model, based on outsourcing to specialized wholesalers and calling upon a sales force made up essentially of independent agents.

Econocom’s Products and Solutions offering covers:

• IT product procurement services backed by specific expertise in large-scale rollouts and high integration capability;

• IT solutions for networks, security, virtual applications, storage and printing (cost-per-page basis);

• software license management.

The added value generated by Econocom Products and Solutions is acknowledged by all its partners and clients in terms of both price/turnaround performance and ability to manage large-scale rollouts in compliance with exacting quality standards.

By turning to Econocom,companies and organizations benefi tfrom better performing and moreversatile IT and telecommunications infrastructures.


TelecomServicesIn the B-to-B fi xed-line and mobile telecommunications services sector, Econocom has been developing a service offering since 2000 that positions Econocom Telecom on strategic data-voice projects in partnership with key market players (telecom operators, hardware manufacturers, etc.).

Econocom is one of the few European providers capable of offering a service that includes:

• consulting;

• procurement;

• line activation;

• operator relations and usage optimization;

• user help desk;

• equipment maintenance;

• telecom infrastructure financing.

The telecommunications asset management services and solutions developed by Econocom Telecom address a growing need among companies and organizations and help us stand out from our competitors.

EnterpriseSolutionsEconocom’s comprehensive approach to the management of IT and telecommunications infrastructures meets the needs of a large number of national and international groups looking to implement standardized processes for the procurement, rollout, integration and management of their ICT resources across all their sites.

Established in 2006, Econocom Enterprise Solutions enables major corporations to use a single intermediary capable of delivering integrated solutions that combine all of Econocom’s services.

With Econocom, IT management teams are better placed to act as service providers to internal clients and focus on high added value projects.

Some of Econocom’s European Clients


Thales • France

Belgian Finance Ministry • Belgium

Renault • France

Electrabel • Belgium

INSEAD • France

Telenet • Belgium

t for telecom • Netherlands

Informática El Corte Inglés • Spain

FJH • Germany

Gabetti • Italy

The BSS Group PLC • United Kingdom


Econocom Enterprise Solutions was awarded the contract for managing the “Desktop On Demand” project.

Thales

This project involves the fi nancing and rollout of 45,000 micro-computers across Europe over a three-year period starting with France, Germany, the UK and the Netherlands.

Econocom was chosen for its ability to:

• effectively manage its relationship with manufacturers;

• finance the project;

• industrialize the distribution, integration and rollout process;

• phase out obsolete workstations;

• reduce the time between user requests and the delivery of the new equipment by managing inventory in real time;

• manage the updates detailing asset inflows and outflows in the client’s administrator database.

France




Papyrus Project The Belgian Finance Ministry signed a five-year outsourcing agreement with Econocom for the management of its 25,000 printers.

Econocom’s tasks include:

• maintenance of some 25,000 printers throughout Belgium;

• replacement of 15,000 to 20,000 toner cartridges per year;

• second level help desk;• optimization of the Ministry’s printer

resources.

These services are invoiced on a cost-per-page basis.

Econocom was selected twice in 2006 to help modernize IT management at the Belgian Finance Ministry.

“My PC” ProjectIn December 2006, the Ministry chose Econocom to manage its PC assets. For the next five years Econocom will be responsible for managing all of the Ministry’s computer resources, comprising some 65,000 IT portfolios throughout the country.

This five-year service management agreement is worth an estimated e3.9 million and covers installation, integration, migration, allocation, upgrades, etc.

It also includes consulting services related to the management of these resources.

Belgian Finance Ministry

Belgium




Econocom has been providing leading-edge IT services to the Renault group for several years now. Thanks to the quality of our relationship with Renault and the high professional standards of our teams, Econocom was asked to provide services in connection with a number of projects in 2006.

The migration of 9,000 cell phones by Econocom Telecom

Econocom Telecom France was selected to manage the migration of Renault’s 9,000 cell phone lines to the SFR network. This project covered some 100 Renault sites across the whole of France. Out of the 9,000 lines, 7,400 had to be migrated by December 31, 2006, a task which Econocom Telecom completed successfully.

The services provided by Econocom included:

• taking an inventory of the existing lines;• validating and updating user

databases;• handling the cancellation of the contract

with the former operator and the activation of the lines on behalf of SFR;

Renault

• overseeing the just-in-time delivery of Nokia cell phones to Renault sites;

• distributing the cell phones on the premises and instructing each user on how to operate the new equipment;

• managing technical portability issues;• running the help desk until January

2007, in order to assist users after the migration.

A full-service offering to upgrade 1,500 portable PCs

In connection with its “Malette Vendeur” project, Renault selected Econocom’s global service offering on the grounds that it met the full range of technical requirements associated with the upgrade of 1,500 portable PCs.

Econocom is responsible for:

• distributing portable PCs (managed by Econocom Products and Solutions);

• rolling out the new systems at 170 Renault sites across France (entrusted to Alliance Support Services);

• financing the fleet of portable PCs (Econocom Financial Services).

France

Belgium

In 2002, Electrabel entered into a five-year performance guarantee agreement with Econocom.

The agreement covers the management of over 10,000 workstations (desktop management) across some 100 sites, including nuclear plants, as well as TCO (Total Cost of Ownership) optimization.

A team of 100 or so Econocom engineers provides user support, including first and second level incident management, service queries and IT portfolio management.

Electrabel





Econocom has been managing INSEAD’s ever-changing IT infrastructure since 1998.

In 2006, INSEAD redefi ned its activities in order to enhance its effectiveness and put in place a program to align its IT applications and infrastructure.

Econocom and INSEAD have worked together to adapt service levels to the specifi c requirements of each activity:

• External Customer (training),

• Faculty (research and teaching),

• Management (support for other activities).

INSEAD

France

Drawing on its ITIL expertise, Econocom has developed and implemented:

• incident, problem, configuration, change and release management processes for 1,500 workstations and 90 servers at INSEAD;

• availability and capacity management for both network and servers.

This seven-year performance guarantee agreement is the fruit of longstanding collaboration with the Fontainebleau and Singapore campuses. For INSEAD, as for Econocom, the objective is to ensure service excellence at one of the world’s most prestigious business schools.


In less than 3 years, Econocom has helped Telenet transform the nature, operation and capability of its help desk into a full-fledged service desk.

The Telenet’s fast growth through several acquisitions has led to an increase in the number of users in the space of a few months.Based across several sites, users must enjoy the same quality levels for the services provided by Telenet’s help desk.

One of many reasons Telenet has chosen Econocom is because of the experience and flexibility Econocom can bring to bear for the benefit of its clients and its ability to adapt itself to their specific models, concepts and procedures.

Drawing on ITIL practices, the new Service Desk provides a SPOC (Single Point of Contact) solution to all problems encountered by users.

In 2006, new Service Level Objectives were defined for the SPOC solution offered by Econocom. The new three-year contract concluded in 2007 contains Service Level Agreement (SLA) commitments. Econocom’s services are billed on a monthly cost-per-workstation basis.

Telenet

Belgium


t for telecom

t for telecom and Econocom came in contact with each other after the campaign conducted by Econocom Financial Services to promote its Multimedialease offering.

Multimedialease provides media companies with customized financing solutions for the purchase of IT equipment and related services. During the summer of 2006, t for telecom signed a Classic Lease agreement for the financing of audiovisual equipment installation – 185 plasma and LCD screens, 300 Triple Play consoles and 52 POS systems – at its 150 sales outlets in the Netherlands. Thanks to this flexible financing solution, t for telecom is free to acquire the IT equipment best suited to its needs.

Econocom provides budgetary control and overall billing administration for t for telecom. Econocom also bears the residual value risk and handles the resale of the leased equipment, at market value, at the end of the lease life cycle.

Netherlands



In 2006, IECISA signed two major agreements with Econocom to offer its end-users access to tailor-made financing solutions.

The first contract concerned a project for Pais Vasco, the public healthcare service for the Spanish Basque Country. To facilitate the management of more than 40,000 leased assets, Econocom proposed a Budget Lease financing solution incorporating several modules from the Master IT administrative management offering.

This contract has provided Pais Vasco and IECISA with comprehensive technology investment knowledge and with asset management tools for optimizing the cost and location of IT resources.

The second contract concerned Metro de Madrid, the operator of the Madrid metro system, and also included an asset management tool.

Informática El Corte Inglés (IECISA) is Spain’s second-ranked IT and consulting services fi rm. It is a subsidiary of El Corte Inglés (the largest retailer in Spain, with annual revenues in excess of e15 billion and over 74,000 employees) and has been an Econocom partner since 2003.

Spain

Informática El Corte Inglés




Germany

FJH is Germany’s leading provider of software and consulting services for the insurance and banking industries.

FJH has business relationships with over half of all German insurers, and its products are marketed in 26 countries worldwide.

In 2006, FJH entered into an exclusive agreement with Econocom Financial Services for the leaseback and management of computer software.

Econocom was awarded the contract because it offered a flexible solution tailored to meet FJH’s evolving business requirements.

FJH


Italy

Gabetti is one of Italy’s leading real estate specialists.

In 2002, Gabetti engaged Econocom to manage its IT infrastructure, initially under an operating lease contract covering 2,000 workstations, 30 servers and two AS/400 computers. The lease-financing agreement was subsequently extended to the workstations at Gabetti’s headquarters and regional branches.

For Emilio Gasperini, IT Director at Gabetti: “Optimal administrative and financial management of IT assets has always been a key success factor for a company like Gabetti. We talked to the leading providers of IT asset financing and were impressed by Econocom’s value-added solutions and the professionalism of its people.”

In 2006, the implementation of the “Kioski” project, entailing the installation of flat-screens to display Gabetti’s real estate advertisements at Gabetti agencies and several important hypermarkets in Italy, was entrusted exclusively to Econocom.

GABETTI





United Kingdom

In 2004, Econocom won the tender launched by BSS, which was seeking a partner to provide solutions for the financing of its new telecom program.

The telecom program required extensive upgrades to BSS’s data transmission equipment. The related work comprised the installation of high-performance servers at the Group’s headquarters, together with routers throughout the entire branch network in the United Kingdom.

“I think that one of the reasons why Econocom was selected is that our financing solutions include complementary services, such as asset management. We have given BSS an overall vision of its IT resources and infrastructure life cycles, together with the power to optimize its technology investments,” explains David Butcher, sales representative at Econocom UK.

The BSS Group PLC is a specialist distributor of pipeline, heating, ventilation, plumbing and sanitaryware products. The Group is present throughout the United Kingdom thanks to an extensive branch network.

The BSS Group PLC


Econocom Group share performance Single listing of Econocom Group shares on Euronext Brussels

Econocom Group shares have been listed in Brussels since 1986. They were traded on the Second Marché of the Paris Bourse in 2000 during the acquisition of Infopoint group via an exchange offer.In early 2006, the Group decided to exit Euronext Paris in an effort to streamline costs.As of October 13, 2006, Econocom Group shares are listed only on Euronext Brussels.

Regular and transparent fi nancial communication

Econocom Group strives to establish a durable relationship of trust and transparency with shareholders by providing timely and regular disclosure of fi nancial information. To this end, the Group reports its preliminary full- and half-year results less than four weeks after the close of each accounting period.Furthermore, in accordance with CBFA directives, all fi nancial information concerning Econocom Group is available in real time on its website www.econocom.com.

3,42

9,54

2

Share performance

2,90

3,25

8

1,98

7,44

9

2,16

0,62

4

2,35

0,38

9

1,26

5,30

8

1,07

2,10

0

2,90

0,87

6

3,43

0,05

4

5,47

0,35

4

2,66

1,27

4

2002 2003 2004 2005 2006

High (in €) 6.13 5.90 6.23 6.92 7.05

Low (in €) 2.50 3.90 5.03 5.70 5.09

Share priceas of Dec. 31 (in €)

3.75 5.10 5.80 6.62 6.66

Market capitalization as of Dec. 31(in € millions)

118 161 174 192 193

Average daily trading volume

12,318 11,992 22,994 19,902 19,098

Number of shares as of Dec. 31 (in millions)

31.5 31.5 30.0 29.0 29.0

December 31, 2006€6.66

December 31, 2005€6.62

Jan Feb March Apr May June July Aug Sept Oct Nov Dec

1,35

7,73

5


2006

Monthly traded cap (in €)


• Econocom shares are listed on the Premier Marché of Euronext Brussels. Econocom is a member of the Euronext Next Economy index.

• ISIN code: BE0003563716

• Average daily trading volume in Brussels in 2006: 19,098

• Market capitalization as of December 31, 2006: u193 million

Ownership structure as of December 31, 2006

0.36euro

Earnings per share (in €)

2005 20062004

0.48

0.45

0.36

Shareholders’ agendaAnnual General Meeting May 15, 2007

Dividend payment date early June 2007

2007 preliminary half-year results July 26, 2007

2007 half-year results August 31, 2007

2007 preliminary full-year results January 25, 2008

Dividend

At the Annual General Meeting to be held on May 15, 2007, the Board of Directors will recommend a gross dividend per share of 0.20 euros (0.16 euros net), an increase of 25% over the previous year. This dividend will be paid at the beginning of June 2007.

0.20euro

Gross dividend per share (in €)

0.16

0.15

0.20

2005 20062004

2.76%Treasury stock

49.84%Econocom International NV

47.40%Public shareholders


Financial statements2006

44 •

Contents

45 • Organization of Econocom Group


47 • Financial calendar

48 • Management report

54 • Group structure as of December 31, 2006

55 • Ownership structure

56 • Corporate governance

64 • Consolidated financial statements for the year ended December 31, 2006

64 • Consolidated financial statements

Consolidated income statement and earnings per share

Consolidated balance sheet

Consolidated cash flow statement

Consolidated statement of changes in equity

72 • Notes to the consolidated financial statements

132 • Parent company financial statements for the year ended December 31, 2006 – prepared in accordance with Belgian GAAP

Parent company income statement

Parent company balance sheet

Parent company cash flow statement

139 • Information about the company

140 • Competition and recruitment

142 • Recent developments and outlook

146 • 10-year consolidated highlights

ECONO_RA06_Financier_GB 31/05/07 15:28 Page 44

2006 Annual report • 45

1. Board of Directors

Chairman and Chief Executive Officer Jean-Louis Bouchard

Chief Executive Officers Jean-Philippe RoeschPatrik Vandewalle

Directors Christian BretGaspard DürrlemanRafi KouyoumdjianCharles de Water

2. Statutory AuditorsPricewaterhouseCoopersReviseurs d’Entreprises S.C.C.R.L.représentée par Emmanuèle Attout

Organization of Econocom Groupas of December 31, 2006


46 •

Price (€) VolumeMonth High Low Closing Average Number of Value

(€) (€) (€) (€) shares traded (in € thousands)

January 5.78 5.03 5.60 5.47 733,406 4,014.88February 5.80 5.45 5.75 5.64 353,447 1,993.26March 6.10 5.44 5.91 5.87 655,510 3,850.66April 6.15 5.70 5.84 5.93 572,359 3,391.80May 5.85 5.10 5.40 5.47 220,812 1,206.78June 5.80 5.25 5.65 5.39 311,605 1,679.40July 6.12 5.65 6.10 5.88 569,325 3,348.14August 6.23 5.90 6.18 6.09 1,188,191 7,239.89September 6.15 5.90 6.15 6.05 406,066 2,456.33October 6.06 5.89 6.00 6.00 352,773 2,115.79November 6.00 5.71 5.89 5.91 175,040 1,034.33December 5.92 5.55 5.80 5.82 342,368 1,991.69Total 2004 6.23 5.03 5.80 5.84 5,880,902 34,322.96

January 6.50 5.70 6.25 5.98 471,871 2,821.55February 6.75 6.20 6.70 6.49 273,612 1,774.92March 6.92 6.60 6.75 6.76 219,985 1,487.93April 6.75 6.20 6.40 6.49 219,387 1,424.13May 6.69 6.38 6.38 6.53 496,245 3,238.69June 6.70 6.33 6.33 6.45 357,109 2,303.85July 6.69 6.40 6.60 6.54 552,694 3,614.90August 6.54 6.25 6.40 6.40 479,056 3,067.40September 6.40 6.23 6.29 6.32 562,985 3,555.76October 6.32 6.15 6.19 6.25 726,174 4,535.83November 6.24 5.97 6.19 6.16 423,233 2,607.33December 6.65 6.09 6.62 6.32 344,660 2,178.25Total 2005 6.92 5.70 6.62 6.42 5,127,011 32,610.54

January 7.05 6.68 6.84 6.90 497,035 3,429.54February 6.75 6.50 6.55 6.56 405,713 2,661.27March 6.75 6.50 6.60 6.60 828,352 5,470.35April 6.82 6.50 6.80 6.66 515,410 3,430.05May 6.75 6.21 6.42 6.50 446,474 2,900.88June 6.52 6.23 6.25 6.34 214,245 1,357.73July 6.55 6.15 6.31 6.33 169,435 1,072.10August 6.25 5.84 6.00 6.14 206,177 1,265.31September 6.01 5.65 5.72 5.86 400,926 2,350.39October 6.00 5.09 5.83 5.70 378,904 2,160.62November 6.49 5.85 6.25 6.20 320,815 1,987.45December 6.66 6.28 6.66 6.45 449,971 2,903.26Total 2006 7.05 5.09 6.66 6.35 4,833,457 30,988.96

Econocom Group share performanceon the Brussels stock exchange since January 1, 2004



Annual General Meeting May 15, 2007 May 20, 2008

Dividend payment Early June 2007 Early June 2008

Press release on preliminary first-half results July 26, 2007 July 29, 2008

Press release on final half-year results August 31, 2007 August 29, 2008

Press release on preliminary annual results January 25, 2008 January 27, 2009

Investor Relations:Jean-Philippe Roesch, Parc Horizon, Chaussée de Louvain 510, Bte 801930 Zaventem, BelgiumE-mail: [email protected]

Financial calendar


Management reporton the financial statementsfor the year ended December 31, 2006presented to the Annual General Meeting of May 15, 2007

48 •

Econocom Group SA/NV continued to reorganize its legalstructure during the year and the French companyEconocom.com was liquidated in December 2006 as ithad been dormant since 2003.

Lastly, Econocom Financial Services International BV – awholly-owned subsidiary of Econocom Group SA/NV –took over Econocom Group SA/NV’s interest in EconocomNederland BV. Econocom Financial Services InternationalBV was set up in November 2006 to act as the holdingcompany for the Group’s Financial Services business.

1. Scope of consolidation

In 2006, the Econocom Group continued to expand in the telecom industry, extend its footprint in Germany, andreorganize its legal structure. On June 30, 2006, the Groupbought out a 22.1% minority stake in Belgium-basedEconocom Telecom Services. Also during the year itacquired Avenir Telecom’s B-to-B mobile telephony serv-ices business in the south-east of France which, com-bined with the acquisition of JCA in Toulouse in late 2005,enabled Econocom to bolster its position in the mobiletelecommunications sector in southern France. In addi-tion, Econocom Group SA/NV purchased a 35% stake inEconocom Albis GmbH, raising its interest to 100%.

In June 2006 Econocom Services BV – a Dutch com-pany specialized in mainframe services (particularly forIBM) – was sold as it no longer fit with the Group’s corebusiness.

In accordance with prevailing legislation and the Company’s bylaws, we submit to you for approval ourreport on the Company’s operations and the financial statements for the year ended December 31, 2006.

2. Results

2.1. Consolidated results

(in € millions) 2006 2005

Revenue from continuing operations 589.8 550.9Recurring operating profit 16.5 19.0Recurring operating margin 2.8 % 3.4 %Operating profit 14.5 19.0Profit before tax 14.5 19.0Income tax (4.4) (5.1)Profit from continuing operations 10.1 13.9Discontinued operations 0.1 0.2Profit for the year excluding minority interests 10.2 14.1Profit for the year including minority interests 10.2 14.2




Apart from A2Z, all of the Group’s businesses – compris-ing Financial Services, Products and Solutions, ManagedServices and Telecom Services – were profitable over theyear as a whole.

After taking into account ?2 million in non-recurring oper-ating items, as well as non-recurring financial items andthe income tax expense of ?4.4 million, profit for the yearstood at ?10.2 million.

As of December 31, 2006 goodwill was slightly higher thanone year earlier, due to acquisitions made during the year.An analysis of goodwill is provided in the table below.

Consolidated revenue was up 7% over 2005, boosted bythe 12% year-over-year increase reported in the secondhalf of 2006. All of the Group’s businesses contributed tothis performance.

Second-half recurring operating profit amounted to ?13 million, representing a 20% increase compared withthe ?10.8 million posted for the second half of 2005. Thefull-year figure came to ?16.5 million in 2006 versus?19 million the previous year.

Operating profit decreased in 2006, reflecting investmentsmade in the first half of the year in the Group’s new TelecomServices business and the recently-acquired A2Z. Measurestaken as of June 2006 enabled these two areas of opera-tions to return to profit in the second half, however.

Goodwill (including purchased goodwill)

(in € millions) Net value at Acquisition Dec. 31, 2006 date

Econocom Albis GmbH 0.3 2006Avenir Telecom purchased goodwill 1.2 2006JCA purchased goodwill 0.8 2005A2Z Holding NV 3.1 2005For Connected BV 0.2 2005Signal Service SA 7.5 2004CHanSE SA 1.1 2004/2006Synopse SAS 0.4 2003SX Consultants SA/NV 0.7 2002PLI 0.5 2000CSI 0.1 1999Econocom Location and Econocom SAS 0.7 1996Total 16.6

2.2. Results by business segment

Revenue for the Group’s different businesses was as follows:


Managed Services 98 98A2Z 2 1Products and Solutions 188 184Financial Services 280 248Telecom Services 22 20Total 590 551


50 •

Products and Solutions returned to growth in 2006, withrevenue coming in at €187.6 million, representing a 2%increase on both an actual and comparable Group struc-ture basis. This performance was achieved despite theadverse effect of declining sales prices of IT equipment.

The twofold increase in recurring operating profit to ?4 mil-lion was fueled by considerable progress made in theFrench subsidiary, and demonstrates the relevance ofEconocom’s innovative business model based on variablesales costs and outsourced logistics processes.

Revenue for Financial Services grew by a substantial13% to €279.8 million, with France, Germany and Spainregistering significant gains. This pace of growth out-stripped the market and stemmed from the success ofnew high value-added offerings and large-scale invest-ments made in terms of sales and marketing since mid-2005. These investments weighed on Financial Services’profitability for 2006, however, and recurring operatingprofit came in lower than 2005, at ?9.4 million.

Telecom Services revenue climbed 15% to €22.4 mil-lion, spurred partly by acquisitions in France including JCAin Toulouse in late 2005 and Marseille-based AvenirTelecom in September 2006. The profitability of this newbusiness was temporarily affected by expansion-relatedcapital expenditures. After a ?0.8 million loss in the firsthalf of the year – reflecting factors such as capital spend-ing in Spain and the launch of a service offering withProximus in Belgium – thanks to measures adopted inJune Telecom Services returned to profit in the secondhalf of the year, reporting an operating margin of 7%.

Managed Services generated €98 million in revenue,up 4% on a comparable Group structure basis. Thisincrease offset the impact of the sale of the Dutch sub-sidiary Econocom Services BV whose business no longerfit with the Group’s strategy.

2006 saw a sharp increase in operating margin, whichcame in at 4.5% versus 2.7% in 2005. This performance –which affected both France and the Benelux countries –reflects measures adopted since 2004 to achieve costsavings and productivity gains.

Major contracts were signed during the second half of theyear, whose effects will begin to feed through in 2007.

The start-up of A2Z was slower than expected, withthe company reporting €1.7 million in revenue overthe year. Acquired in September 2005, A2Z has devel-oped a vanguard approach to providing IT and telecomservices to small- and medium-size companies, byinvoicing on a monthly cost per user basis. For the firstsix months of 2006 it generated a recurring operatingloss of ?1.5 million.

The company was reorganized during the summer, withthe intent of concentrating sales and marketing capacityin Belgium and ending investments in other Europeancountries. The ?2 million in costs relating to this reorgan-ization were recorded in “Other operating expenses”,which negatively impacted operating profit. The processpaid off however, and A2Z has been slightly profitablesince August 2006.

The contribution of these businesses to recurring operating profit (1) can be analyzed as follows:


Managed Services 4.5 2.6A2Z (1.5) (0.8)Products and Solutions 4.0 2.0Financial Services 9.4 13.7Telecom Services 0.1 1.5Total 16.5 19.0

(1) After allocating the recurring operating profit of the holding companies.


2. The MBO Capital venture capital fundIn 2006, Econocom Group SA/NV invested an additional?1.5 million in the MBO Capital venture capital fund. The aggregate amount of investments in this fund totaled?4.7 million at the year-end, out of a total ?5 million pro-vided for in an irrevocable commitment signed in 2002.

The Company received ?0.8 million in repayments ofunits in the fund. At year end 2006, total repaymentsamounted to almost ?1 million.

3. Treasury stockEconocom Group SA/NV continued to implement itsshare buyback program during 2006, purchasing1,191,646 of its own shares and selling 433,340. As ofDecember 31, 2006, the Company held 799,034 sharesin treasury. As a result, the unavailable reserves ofEconocom Group SA/NV increased by ?4.8 million (non-consolidated figure).

4. Share capitalAs of December 31, 2006, the capital of Econocom GroupSA/NV was made up of 29,000,000 ordinary shares withno stated par value, unchanged from the previous year.

The Company’s ownership structure is set out on page55.

3. Share capital, stock optionplans, and treasury stock

Share capitalAs of December 31, 2006, the Company’s share capitalamounted to ?16,180,922.08, represented by 29,000,000fully paid-up shares held in registered or bearer form. Authorized unissued capital stood at ?15,894,722.08.

Stock option plansDuring the year, 433,340 options were exercised for a totalof ?2,032.283.80. This resulted in the transfer byEconocom Group SA/NV of 433,340 shares to optionholders.

2.3. Parent company balance sheet andincome statement (non consolidated)

Analysis of 2006 resultsSales of services for Econocom Group SA/NV came to?9.6 million in 2006, versus ?9.9 million in 2005. Thisamount includes all royalties and services billed.

Net profit for the year amounted to ?25.5 million, up from?11.4 million one year earlier, and was primarily attribut-able to:

• Net financial income, which totaled ?11 million in 2006compared with ?8.4 million in 2005. This ?2.6 millionimprovement stems mainly from dividends received fromsubsidiaries.

• Non-recurring gains of ?15.3 million versus ?3.7 millionthe previous year, corresponding to a ?19.9 million gainon the sale of Econocom Nederland BV shares toEconocom Financial Services International BV, less a ?4.6 million impairment loss on a receivable owed by A2Z Holding.

Business overview

Investments in subsidiaries and affiliates decreased by€2.1 million in 2006This change reflects the following transactions carriedout as part of the legal restructuring of the Group’s busi-nesses:

• Formation of a holding company – Econocom FinancialServices International BV, for ?0.5 million.

• Sale of all the shares of Econocom Nederland BV, rep-resenting ?3.1 million, to the new holding companyEconocom Financial Services International BV. This company will ultimately hold the Group’s interests in theoperating companies of the Financial Services business.This sale generated a gain of ?19.9 million.

• Purchase of the remaining 35% interest in EconocomAlbis GmbH that Econocom Group SA/NV did not alreadyown, for ?0.5 million.

• Liquidation of Econocom.com, which was wholly ownedby Econocom Group SA/NV.




52 •

4. Delisting of Econocom Group SA/NV shares fromEuronext Paris

In accordance with the Board of Directors’ decision onJanuary 19, 2006, Econocom Group SA/NV requestedthat Euronext Paris S.A. delist its shares. This request,which was accepted, was made with a view to centraliz-ing the Company’s share listing on the Eurolist Brusselsstock exchange in order to improve trading conditions andboost liquidity. Econocom Group SA/NV shares weretherefore delisted from the Eurolist-Eurozone market ofEuronext Paris S.A. on the evening of October 13, 2006,but continue to be traded on Eurolist Brussels.

5. Risk factorsDue to the nature of its business, Econocom Group SA/NVis exposed to certain financial and legal risks.

A complete review of the Group’s risk exposure and man-agement strategy is provided by type of risk in the notesto the consolidated financial statements.

In view of its business model, Econocom Group SA/NV isnot significantly exposed to exchange-rate, interest-rateor environmental risks. The Group’s dependency on clientsis limited, as no one client represents over 5% of theGroup’s total revenue. In addition, it does not have a highliquidity risk as it has a significant cash surplus.

Econocom Group SA/NV is, however, exposed to risksrelating to:

• doubtful accounts, which are largely covered by factoringsolutions and refinancing of contracts on a non-recoursebasis;

• the termination of service agreements, as a significantportion of the Group’s employees have permanent con-tracts; however, most of these agreements have terms ofover one year and include reciprocal notice periods.

In accordance with the market authorities’ recommenda-tions on corporate governance, at its meeting on February28, 2003, the Board of Directors set up a Stock OptionCommittee. This Committee, composed of three mem-bers, is tasked with ensuring that stock option plans arecarried out in accordance with Board directives and, inparticular, with allocating an amount representing a max-imum of 1% of the Company’s capital annually. TheCommittee is required to report to the Board of Directorsas often as it deems necessary and at least once eachyear. It met on December 21, 2006, and awarded 255,000options during the year.

There were 1,098,500 unexercised options as of December31, 2006 (3.79% of the Company’s outstanding shares),representing a potential capital increase (including issuepremiums) of ?6.6 million.

Treasury stockThe Extraordinary General Meeting of November 28, 2006renewed for an eighteen-month period the authorizationgiven to the Board of Directors to buy back a maximum of2,900,000 of the Company’s own shares, in accordancewith the applicable Belgian legislation, at prices rangingfrom ?2 to ?18, subject to a ceiling of 10% of total issuedshares.

At the same Meeting, shareholders also renewed for athree-year period the authorization given to the Board ofDirectors to purchase Econocom Group SA/NV shareswithout the prior approval of shareholders, if the Companyfaces a serious and imminent threat to its operations.

As of December 31, 2006, Econocom Group SA/NV andits subsidiaries held 799,034 Econocom Group SA/NVshares (acquired at an average price of ?6.28), represent-ing 2.76% of the total number of shares issued.



7. Outlook for 2007 and dividends

Spurred by a favorable operating environment for theEconocom Group’s market segments, the beginning of2007 saw a rise in the number of orders and contracts.

The Group’s moves to strengthen the management teamof its Telecom Services business, coupled with the suc-cessful integration of businesses acquired in 2005 and2006, began to bear fruit in the second half of 2006.

Acquisitions carried out in the first half of 2007 areexpected to have a favorable impact on the results forthe year as a whole, and positive effects should arisefrom the investments made in 2005 and 2006 relating tonew businesses as well as from steps to bolster the salesand marketing team.

Group Management expects the combination of thesefactors to significantly boost operating profit in the com-ing year.

At the forthcoming Annual General Meeting, the Board ofDirectors will recommend raising the gross dividend pershare to ?0.20 (?0.16 net), representing a 25% increaseover 2005. Amounts payable on shares held as treasurystock will be retained until disposal of the shares.

Brussels, March 13, 2007

The Board of Directors

The Group does not have any specific employee-relatedrisks. Over 90% of its staff are employed in France andBelgium.

The IT services market is extremely competitive, and hasbeen for a long time. Econocom Group SA/NV is there-fore accustomed to having to change and innovate inorder to maintain and expand its client base.

6. Post balance sheet eventsIn accordance with its combined internal and externalgrowth strategy, the Econocom Group has carried outthree acquisitions since December 31, 2006.

• On February 1, 2007, the Group’s French subsidiaryEconocom Managed Services acquired Kentron, the mainindependent competitor of Synopse – a company alreadyowned by Econocom Managed Services which special-izes in ITIL consulting services. By combining Synopseand Kentron Econocom Managed Services has becomeFrance’s leading provider of ITIL consulting services – arecognized methodology aimed at optimizing informationtechnology service management. The Group now has 35 specialized consultants in France, and around thirty inthe Benelux countries.

• The Group has also pursued its development strategyin the Telecom Services business by acquiring the B-to-Boperations of The Phone House. Through this acquisitionEconocom Telecom has strengthened its position as theindependent leader in B-to-B distribution in France andhas accelerated its expansion in the area of managed telecom services.

• Lastly, the Group acquired Alliance Support Services, acompany with 450 employees that generated ?34 millionin revenue in 2006. By adding Alliance Support Services toits operations in France, Econocom has consolidated androunded out its service offering, especially in the area ofimplementation and maintenance services.



ECONOCOM FINANCIAL SERVICES INTERNATIONAL BV

ECONOCOM PRODUCTS SERVICES BV

ATLANCE SA/NV

ECONOCOM LOCATION SAS

ECONOCOM PRODUCTS & SOLUTIONS BELUX SA/NV

ATLANCE FRANCE SAS

A2Z SOLUTIONS NV

ECONOCOM EXPERT INTERNATIONAL HOLDING BV

G.I.E. ECONOCOM

ECONOCOM SAS

ECONOCOM LOCAZIONE ITALIA SPA

ECONOCOM ALBIS GmbH

ECONOCOM PRODUCTS & SOLUTIONS LUXEMBOURG SA ECONOCOM FRANCE SAS

ECONOCOM NEDERLAND BV

ECONOCOM TELECOM SERVICES SA/NV

ECONOCOM TELECOM SPRL

ECONOCOM LEASE SA/NV

ECONOCOM PROMODATA FRANCE SA

PROMODATA SNC

100%

100%

99.99%

100%

100%

ECONOCOM TELECOM BV

100%

ECONOCOM MANAGED SERVICES SAS 100%

SCI ALEXANDRE 99.90%

INFOCONSEIL SARL 100%

100%

DATA NETWORKS FRANCE SARL 100%

58.33%

6.43%

100%

ECONOCOM UK LTD. 100%

ECONOCOM SA (ESPAGNE) 99.98%

ECONOCOM USA INC. 100%

93.57%

99.99%

41.67%

50.10%

99.93%

96.68%

100%

100%

ECONOCOM PRODUCTS & SOLUTIONS SAS 99.56%

100%

100%

0.07%

100%

100%

100%

100%

A2Z HOLDING NV 100%

SYNOPSE SAS 100%

ECONOCOM LUXEMBOURG SA

100%

APERLEASING 95%

ECONOCOM MANAGED SERVICES SA/NV

Econocom Group SA/NV

Group structureas of December 31, 2006

54 •



Ownership structureas of December 31, 2006

2.76% 40.15%

49.84% 7.25%

TREASURY STOCK

ECONOCOM GROUP SA/NV

PUBLIC COMPANIES CONTROLLED BY JEAN-LOUIS BOUCHARD

VALGEST V.WAJS


Corporate Governance(administrative, management and supervisory bodies and senior management)

56 •

1. Composition of the Board of Directors and Statutory Auditors (as of December 31, 2006)

Jean-Louis Bouchard (term of office expiring at the May 2010 Annual GeneralMeeting) La Chaussée 4, chemin du Viaduc 60270 Gouvieux (France)Chairman of the Board of Directors and Chief ExecutiveOff icer of Econocom Group SA/NV, Chairman ofEconocom International NV

Jean-Philippe Roesch (term of office expiring at the May 2008 Annual GeneralMeeting) 21, avenue de la Criolla 92150 Suresnes (France)Chief Executive Officer of Econocom Group SA/NV andManaging Director of the Group

Patrik Vandewalle (term of office expiring at the May 2010 Annual GeneralMeeting) Achiel Cleynhenslaan 13, 3140 Keerbergen (Belgique)Chief Executive Officer of Econocom Group SA/NV andChief Operating Officer of the Group

Charles de Water (term of office expiring at the May 2011 Annual GeneralMeeting) Korte Veersteeg, 4D 4157 GR Enspijk (Pays-Bas)Director of Econocom Group SA/NV and EconocomInternational NV

Christian Bret (term of office expiring at the May 2010 Annual GeneralMeeting) 19, rue de la Côte-d’Argent 92410 Ville-d’Avray (France)Director of Econocom Group SA/NV

Rafi Kouyoumdjian (term of office expiring at the May 2007 Annual GeneralMeeting) 25, rue de Lubeck 75016 Paris (France)Director of Econocom Group SA/NV

Gaspard Dürrleman (term of office expiring at the May 2011 Annual GeneralMeeting) 50, avenue Bosquet 75007 Paris (France)Director of Econocom Group SA/NV

PricewaterhouseCoopers Reviseurs d’EntreprisesSCCRL (term of office expiring at the May 2007 Annual GeneralMeeting) Statutory Auditors of Econocom Group SA/NV, represent-ed by Emmanuèle AttoutWoluwe Garden, Woluwedal, 18 1932 Sint-Stevens-Woluwe (Belgium)

The following four members of the Board of Directorsserved in an executive capacity during 2006: Jean-LouisBouchard, Jean-Philippe Roesch, Patrik Vandewalle andCharles de Water. In July 2006 Charles de Water steppeddown from his position as CEO of the Group’s FinancialServices business but is still a director of Econocom GroupSA/NV. Gaspard Dürrleman, Rafi Kouyoumdjian andChristian Bret are non-executive directors and have nolinks with the majority shareholder. Accordingly, four of theseven members of the Board are non-executive directors.

The Chairman of the Board of Directors owns controllinginterests in several non-Group companies, where heserves as a director or Chairman. The other executivedirectors do not hold directorships outside EconocomGroup SA/NV and its subsidiaries, with the exception ofPatrik Vandewalle, who is a director of BVBA XP1 SprL.

Gaspard Dürrleman is a member of the ManagementCommittee of Audevard, Chief Executive Officer of ArthusBertrand, Chairman and Chief Executive Officer of PichardBalme, and a director of APL International. Christian Bretis Managing Partner of Eulis, as well as a director ofFontaine Consultants and a member of the SupervisoryBoard of Luceor. Charles de Water is a director ofEconocom International NV, as well as a member of theSupervisory Board of Rabobank Geldermalsen enOmstreken and a partner in Zuijdplas Beleggingen. RafiKouyoumdjian is Chief Executive Officer and a director of



Chairman and Chief Executive Officer. This means that theGroup does not fully respect the principle of segregatingthe powers of control of the Board of Directors and exec-utive powers. However, since September 2005 Jean-LouisBouchard has not been a member of the Group’sManagement Committee, to which the Board of Directorshas delegated its management powers. Jean-Louis Bouchard indirectly holds 49.84% ofEconocom Group SA/NV’s capital and as a result exercis-es de facto control.

• Since March 2006, Econocom Group SA/NV has com-plied with Principle 2 of the Lippens Code, which rec-ommends that at least half of the members of the Boardof Directors should be non-executive. Since July, themajority of the Board has been made up of non-execu-tive directors.

However, the Board has not appointed a Secretary toreport to it on compliance with the applicable proceduresand rules; this duty is performed on an informal basis byJean-Philippe Roesch.

• In order to comply with the recommendations in Principle3 of the Lippens Code, in 2006 Econocom Group SA/NVdrew up and implemented a procedure relating to transac-tions and other contractual relations between the compa-nies making up the Econocom Group and its directors andsenior managers. No specific procedure has been drafted,however, in accordance with European Directive2003/6/EC on insider trading, as the Group deems thatthe employees concerned should be aware of the law andthat it is their responsibility to respect it.

• Econocom Group SA/NV does not currently apply therecommendations in Principle 4 of the Lippens Code,which state that the Board should draw up nominationprocedures and selection criteria for Board members andthat a Nomination Committee should recommend suitabledirectorship candidates. Principle 4 also recommends aperiodic assessment of the performance of each directorand of the Board of Directors, in accordance with proce-dures set by the Board.

RKO Management and Investment BV. He is alsoChairman of NextiraOne Management SAS, and performsthe duties of director, Chief Executive Officer, and memberor Chairman of the Supervisory Board within the variouscompanies of NextiraOne Group BV.

The bylaws set the maximum term of office for directorsat six years, and state that directors may be re-elected.No other specific rules are laid down, including relating toage limits.

2. Application of the Lippens Code on Corporate Governance

The Board of Directors has read the recommendations ofthe Belgian Code on Corporate Governance (the LippensCode) and confirms that it adheres to the principles setout therein.

The Board of Directors met on several occasions during2006 in order to discuss the principles of the LippensCode and define the related measures and procedures tobe implemented within the Board, and more generallywithin the Econocom Group. In particular, the Board drafted and approved internal rules for the ManagementCommittee, the Board of Directors, the Audit Committeeand the Stock Option Committee, and drew up aCorporate Governance Charter which can be viewed onthe Group’s website.

The majority of the recommendations set out in theLippens Code have been implemented within EconocomGroup SA/NV. However, there are some recommenda-tions that the Board considers unsuitable to the Group’ssize or that it intends to put in place over the long term. Asummary of how the Group applies the principles of theLippens Code is provided below.

• The Group currently only partially applies the recommen-dations in Principle 1 of the Lippens Code. For reasonsrelating to Econocom Group SA/NV’s ownership struc-ture, Jean-Louis Bouchard performs the duties of both



58 •

3. Compensation, including social security charges, and benefits in kindgranted by Econocom Group SA/NV and its subsidiaries to members of the management and supervisory bodies for 2006

Since 1999, the bylaws have provided for the compensa-tion of offices held. Further to the Annual General Meetingof May 18, 2004, the attendance fees of independentdirectors have been set at ?2,500 per Board Meeting,subject to actual attendance at the meetings.

Non-executive directors who are members of the AuditCommittee and members of the Stock Option Committeereceive ?1,000 per meeting, subject to actual attendance.Compensation paid to executive directors exclusively cor-responds to amounts payable under their employmentcontracts with the Group companies concerned. They donot receive attendance fees.

Non-executive directors do not receive any payment otherthan the above-described attendance fees.

Attendance fees paid to non-executive directors in 2006were as follows:

Compensation paid to non-executive directors in 2006 (in €)

Christian Bret 16,000 Gaspard Dürrleman 18,000 Vincent Wajs (1) 6,000 Charles de Water 5,000Rafi Kouyoumdjian 11,500 Total 56,500

(1) At its meeting on March 9, 2006, the Board of Directors noted the decisionby Vincent Wajs to step down from his position as a director.

To date, the Board of Directors has not set up a NominationCommittee or any formal procedures for nominating mem-bers of the Board of Directors and the ManagementCommittee. Management considers that this recommen-dation of the Code is not suitable for the Econocom Groupin view of its size.

Although the Group has no specific formal procedures forassessing the performance of the members of the Boardof Directors, such assessments take place on a continu-ous informal basis.

• In accordance with Principle 5 of the Lippens Code, theBoard of Directors has set up a Management Committee,an Audit Committee, and a Stock Option Committee.

The internal rules of each of these committees wereamended by the Board at its July 3, 2006 meeting in orderto comply with the Code. Nevertheless, the Board ofDirectors has not raised the minimum number of mem-bers of the Audit Committee from two to three.

In addition, it has decided not to set up a CompensationCommittee as it considers that such a committee wouldnot be suited to the Group’s organizational structure.Compensation paid to the members of the ManagementCommittee is set by the Chairman of the Board ofDirectors and controlling shareholder. Any grants of stockoptions to members of the Management Committee haveto be approved by the Stock Option Committee, whichwas created in February 2003.



Stock options held by members of Econocom’s corporate governance bodies

Number of options outstanding as of December 31, 2006 790,000

4. Information on the nature and scope of transactions betweenEconocom Group SA/NV and its subsidiaries or members of its corporate governance bodies carried out on other-than-arm’s-length terms

No such transactions were carried out in 2006 betweenEconocom Group SA/NV and its subsidiaries or membersof the Board of Directors or Management Committee. Noloans or advances made to such parties were outstandingas of December 31, 2006.

Jean-Louis Bouchard performs the duties of Chairmanand Chief Executive Officer but does not receive any relat-ed compensation.

Econocom International NV – whose Chairman is Jean-Louis Bouchard – bills fees to Econocom Group and itssubsidiaries for managing and coordinating the Group.These fees amounted to ?694,000 in 2006, comparedwith ?708,000 in 2005.

Compensation paid to executive directors in 2006 (in €) (1)

Fixed portion 645,592Variable portion 148,000Total 793,592

(1) Including social security charges.

Compensation paid to members of the ManagementCommittee (other than Board members) in 2006 (€) (1)

Fixed portion 906,972Variable portion 942,850Total 1,849,822

(1) Including social security charges.

5. Number of shares and stock options held by directors and members of the Management Committee of Econocom Group SA/NV (as of December 31, 2006)

Shares OptionsNon-executive directors 287,500 0Executive directors• Jean-Louis Bouchard (indirectly) 14,455,010 0• Jean-Philippe Roesch 272,222 0• Patrik Vandewalle 0 500,000Members of the Management Committee 96,800 290,000Total 15,111,532 790,000

NB: The exercise price of these options is determined on the basis of the same rules as described in section 10 (equal to or higher than the price published in the Moniteur Belge official gazette).



60 •

The members of the Management Committee are respon-sible for managing the subsidiaries on a day-to-day basis.All subsidiaries transmit monthly income statement andbalance sheet data to the Group on the seventh andeighth working days, respectively, of the following month.The data submitted are analyzed by a specialized report-ing department, which submits a consolidated summaryto Group Management each month. Annual budgets andcondensed consolidated results are submitted to theBoard of Directors on a quarterly basis. The Internal AuditDepartment operates under the authority of the Group’sManaging Director. Internal audits of individual subsidiariesare performed over a 15-month cycle. The findings of allinternal control activities are communicated to theCompany’s Statutory Auditors.

7. Committees of the Board of Directors

Pursuant to the bylaws, as amended by the ExtraordinaryGeneral Meeting on February 22, 2000, the Board ofDirectors is authorized to establish specific committeesand to determine their tasks and operating rules.

The Management Committee The Board of Directors used this authorization to set upa Group Management Committee, whose creation wasratified by shareholders at the Extraordinary GeneralMeeting on May 18, 2004.

The Management Committee’s internal rules wereamended by the Board of Directors at its July 3, 2006meeting in order to comply with the recommendationsof the Lippens Code.

The role of this Committee is to implement the strategydefined by the Board of Directors, recommend strategicguidelines for the Group, coordinate the work of centralcorporate departments, and carry out any and all dutiesrelating to day-to-day management.

At its meeting on July 3, 2006, the Board appointed DidierBertho, Bruno Lemaistre, Frans Van Gils and JürgenHeyman as members of the Management Committee,alongside Patrik Vandewalle and Jean-Philippe Roeschwho were appointed on May 18, 2004. Patrik Vandewallechairs the Committee.

6. Role of the Board of Directors

The Board of Directors meets as often as it deems neces-sary in the interests of the Company.

In 2006, the Board met on seven occasions, including twomeetings to approve the interim and annual financial state-ments. The overall attendance rate was 75%.

The Board’s internal rules were approved on July 3, 2006. The Board of Directors is responsible for approving theCompany’s overall strategy proposed by the Chairman,authorizing significant projects and ensuring that there areadequate resources to attain the Group’s objectives. It isentrusted with decision-making outside the scope of day-to-day management, and with development and restruc-turing programs.

The Group’s operational management is delegated to theChief Executive Officers and the Management Committee,as defined in article 524bis of the Companies’ Act andarticle 20bis of the bylaws. The Board appoints the mem-bers of the Management Committee, as well as the ChiefExecutive Officers. It also oversees the quality of the man-agement duties performed and ensures that they are con-sistent with the Group’s strategic objectives.

The Board is validly constituted only if at least half of itsmembers are present or represented. A director may rep-resent one or more other members of the Board.Decisions are adopted on the basis of a majority of votes.In the event of a split decision, the person chairing themeeting has the casting vote. In exceptional circum-stances, when urgency and the best interests of theCompany so dictate, decisions may be adopted pursuantto the unanimous consent of the directors, expressed inwriting. However, this procedure may not apply in relationto approving the annual financial statements and theissuance of authorized capital.

The Board of Directors has implemented an annual budg-et procedure and quarterly review process for all Groupsubsidiaries, including an examination of individual-entitydata such as revenue, margins, costs, balance sheetitems, cash flows and various management indicators.The Management Committee is responsible for imple-menting and ensuring compliance with this procedure.



8. Day-to-day management

The Management Committee is responsible for the day-to-day management of the Group. In this role it is presentedwith monthly results and monitors the progress of theGroup’s projects.

The subsidiaries also organize Management Committeemeetings on a monthly basis. Participants at these meet-ings typically include the CEO and CFO of the subsidiaryconcerned, and, where appropriate, the Technical Director,Sales & Marketing Director and Human ResourcesDirector. Other parties may be invited to take part in meet-ings to discuss specific issues, such as IT, public relations,corporate communications or legal matters. In addition,in countries where the Group’s four business lines(Products and Solutions, Managed Services, FinancialServices and Telecom Services) are established, a month-ly coordination meeting is held which is attended by theCEOs of the various local subsidiaries, to consider mat-ters of common interest, such as finance, sales, recruit-ment and corporate communications, and to foster syner-gies among the different businesses.

All major decisions concerning subsidiaries are made bythe Chairmen or CEOs of the subsidiaries, or jointly by twodirectors, or jointly by one director and a member of theManagement Committee. In general, the subsidiaries haveno significant delegations of authority other than withrespect to day-to-day management. In 2005, the Groupissued a document setting out the powers of the seniormanagers of the Econocom Group’s subsidiaries as wellas the limitations to such powers.

At its July 3, 2006 meeting the Board appointed PatrikVandewalle and Jean-Philippe Roesch as Chief ExecutiveOfficers and renewed Jean-Louis Bouchard’s term of officeas Chairman and Chief Executive Officer.

The Stock Option Committee A Stock Option Committee was set up in February 2003.This Committee, which operates under the supervision of the Board of Directors, is responsible for determiningthe terms applicable to stock option grants and ensuringcompliance with plan requirements.

The Stock Option Committee’s internal rules wereapproved by the Board of Directors at its July 3, 2006meeting.

On April 25, 2006, the Board appointed Christian Bret asa Committee member.

Consequently, the Stock Options Committee comprisesthree members – Christian Bret, Gaspard Dürrleman andRafi Kouyoumdjian. The terms of office of these commit-tee members expire in May 2008.

The Stock Option Committee met once in 2006 in order toauthorize the grant of stock options to four Group man-agers, and to define the related terms and conditions. Allof the Committee members attended this meeting.

The Audit Committee The Board of Directors set up an Audit Committee on May18, 2004 and amended its internal rules on July 3, 2006. The Committee comprises two independent directors –Gaspard Dürrleman and Rafi Kouyoumdjian.

The Audit Committee met three times in 2006, with allCommittee members in attendance as well as the Group’sManaging Director in charge of the Finance Department.Whenever it deems it appropriate, the Audit Committeeinvites the Statutory Auditors and the Head of InternalAudit to Committee meetings.

The Audit Committee is responsible for helping the Boardof Directors perform its duty of controlling EconocomGroup’s operations. In particular, it examines the qualityand relevance of internal and external audit engagements,monitors internal control and risk management proce-dures, ensures that the accounting methods used areappropriate, and that the Group’s financial data are com-plete and accurate.



62 •

11. Employee share ownership

Since November 1997, Econocom Group SA/NV andvarious subsidiaries and sub-subsidiaries have set up several employee stock option plans. An updatedsummary of the Group’s related commitments as ofDecember 31, 2006 is provided below.

9. Appropriation of net profit and dividend policy

Econocom Group SA/NV is committed to internally-financed development. Between 1995 and 2005, the div-idend rose from ?0.031 to ?0.16, reflecting earningsgrowth.

The gross per share dividend to be recommended at theAnnual General Meeting of May 15, 2007 is ?0.20, up25% over the previous year, when the dividend rose 6.7%.This represents a payout rate of 58%.

10. Relations with major shareholders

The transparency-related disclosures made to theCompany designate Econocom International NV as themajority shareholder. To the best of the Company’s knowl-edge, one other shareholder, Vincent Wajs, owns morethan 5% of the capital (either directly or indirectly throughValgest). Relations with the majority shareholder,Econocom International NV, correspond to loans grantedor received and the provision of standard services onarm’s-length terms.

Number of outstanding options Expiry date Exercise price (in €)1999 stock option plan 128,000 November 2007 (*) 8.752001 24,000 January 2007 4.732003 60,000 January 2008 4.062004 100,000 December 2008 4.72

1,500 January 2009 5.31400,000 November 2009 5.85

2005 50,000 January 2010 5.9880,000 May 2010 6.52

2006 255,000 November 2011 5.70Total 1,098,500

(*) Under the Belgian law of December 24, 2002, subject to the beneficiaries’ consent, the exercise period may be extended for a period not to exceed three years, without any additional tax charge. Accordingly, the Stock Option Committee decided to extend the exercise period for options granted in 1999 by three years, thus amending the expiry date from November 2004 to November 2007.



As of December 31, 2006, a total of 1,098,500 optionswere outstanding, exercisable for the same number ofshares (3.79% of the Company’s total outstanding shares),and representing a potential capital increase of ?6.6 mil-lion (including the premiums on new shares issued).

12. Non audit-related engagements carried out by the Statutory Auditors

Non-audit related engagements performed by members ofthe PricewaterhouseCoopers network on behalf ofEconocom Group SA/NV and its subsidiaries during 2006are set out below.

Non-audit certification engagements 2,000Tax advisory work 57,721Other 0Total 59,721

13. Treasury stock

The Extraordinary General Meeting of November 28, 2006renewed for an eighteen-month period the authorizationgiven to the Board of Directors to buy back a maximum of2,900,000 of the Company’s own shares, in accordancewith the applicable Belgian legislation, at prices rangingfrom ?2 to ?18, subject to a ceiling of 10% of total issuedshares.

As of the same Meeting, shareholders also renewed for athree-year period the authorization given to the Board ofDirectors to purchase Econocom Group SA/NV shareswithout the prior approval of shareholders, if the Companyfaces a serious and imminent threat to its operations.

As of December 31, 2006, Econocom Group SA/NV andits subsidiaries held 799,034 Econocom Group SA/NVshares, representing 2.76% of the total number of sharesin issue.

These plans cover Econocom Group SA/NV shares list-ed on the Brussels stock exchange. For the purpose ofallocating shares on the exercise of options, the Companymay either sell the option holders’ existing shares or issuenew shares by way of a capital increase.

The options are granted with a view to involving employ-ees, managers and executives more closely in the Group’soperations and business development.

Certain options are contingent on the beneficiaries achiev-ing individual objectives and may not be exercised if theseperformance criteria are not met.

Options are granted under contracts signed betweenEconocom Group SA/NV and the beneficiary.

At its meeting on January 25, 2000, the Board of Directorsapproved the text of the option contracts. In applicationof Article 523 of the Companies’ Act, three directors whowere – or could become – option beneficiaries abstainedfrom voting. The text of the standard stock option con-tract was amended to take into account the Belgian law ofDecember 24, 2002. These amendments were approvedby the Board of Directors on December 12, 2003.

The exercise price is set in accordance with Article 43 ofthe Belgian law dated March 26, 1999, and is based onthe average price quoted for the Econocom Group shareover the thirty days preceding the grant date.

Other than in certain specific cases, options may not betransferred and Econocom Group SA/NV does not hedgeits exposure to changes in the share price.

During 2006, 433,340 options were exercised and255,000 new options were granted to managers. In rela-tion to the stock options exercised the Board of Directorstransferred 433,340 existing shares held in treasury anddid not issue any new shares.



Consolidated financial statementsfor the year ended December 31, 2006

64 •

Consolidated financial statements

Consolidated income statement and earnings per share

Consolidated balance sheet

Consolidated cash flow statement

Consolidated statement of changes in equity



(in € thousands) Note 2006 2005Revenue from continuing operations 2-4-1 589,805 550,944

Operating expenses (573,340) (531,953)Cost of sales (433,694) (392,413)Personnel costs 2-4-2 (80,053) (79,493)External expenses 2-4-3 (52,857) (50,286)Depreciation, amortization and provisions 2-4-4 (5,218) (11,701)Taxes (other than income taxes) (3,232) (2,497)Impairment losses on current assets, net 2-4-5 1,519 3,826Other operating income 2-4-6 1,119 1,749Other operating expenses 2-4-6 (431) (902)

Financial income – operating activities 2-4-7 2,616 2,061Financial expenses – operating activities 2-4-7 (3,109) (2,297)

Recurring operating profit 16,465 18,991

Other non-recurring operating income and expenses 2-4-8 (1,962)Liquidation expenses (8)

Operating profit 14,495 18,991

Other financial income/(expense), net 2-4-9 (8) 38

Profit before tax 14,487 19,029

Income tax 2-4-10 (4,418) (5,168)

Profit from continuing operations 10,069 13,861

Discontinued operations 2-2-6 94 239

Profit for the year excluding minority interests 10,163 14,100

Minority interests 7 77Profit for the year including minority interests 10,170 14,177

(in euros)

Basic earnings per share - continuing operations 2-4-11 0.352 0.475Basic earnings per share - discontinued operations 0.003 0.008Basic earnings per share - total 0.355 0.483Diluted earnings per share - continuing operations 0.350 0.470Diluted earnings per share - discontinued operations 0.003 0.008Diluted earnings per share - total 0.354 0.478


1-1 Consolidated income statementYears ended December 31


66 •

(in € thousands) Note Dec. 31, 2006 Dec. 31, 2005A - Non-current assets 47,576 48,873

1 - Intangible assets 2-2-0 1,441 877

2 - Goodwill 2-2-1 16,556 14,661

3 - Property, plant and equipment 2-2-2 9,956 11,5173 - 1 Land and buildings 4,919 5,5623 - 2 Plant & equipment, fixtures & fittings 1,902 2,0143 - 3 Furniture and vehicles 835 8833 - 4 Other items of property, plant and equipment 80 3403 - 5 Assets held under finance leases 2,220 2,718

4 - Investment property 2-2-3 552 580

5 - Financial assets 2-2-4 12,328 12,6095 - 1 Investments in subsidiaries accounted for at historical cost 2 25 - 2 Unguaranteed residual value of leased assets 1,576 4,5675 - 3 Other 10,750 8,040

6 - Long-term receivables 2-2-5 2,886 6,295

7 - Deferred tax assets 2-4-10 3,857 2,334

B - Current assets 257,385 227,921

8 - Assets held for sale 2-2-6 14 324

9 - Inventories 2-2-7 5,176 8,6649 - 1 Inventories of equipment in the process of refinancing 1,155 5,0339 - 2 Other 4,021 3,631

10 - Trade and other receivables 165,963 150,94310 - 1 Trade receivables 2-2-8 155,632 131,01010 - 2 Other receivables 2-2-9 10,331 19,933

11 - Current tax assets 5,714 4,167

12 - Prepayments 57 36

13 - Cash and cash equivalents 2-2-10 76,616 60,06513 - 1 Short-term investments 28,506 18,70013 - 2 Cash at bank and on hand 48,110 41,365

14 - Other current assets 2-2-9 3,845 3,722

TOTAL ASSETS 304,961 276,794

1-2 Consolidated balance sheet Years ended December 31

ASSETS



(in € thousands) Note Dec. 31, 2006 Dec. 31, 2005Total equity 88,341 88,050

1 - Equity attributable to shareholders of the parent company 2-3-1 88,228 87,6861 - 1 Share capital 16,181 16,1811 - 2 Additional paid-in capital 55,038 55,0381 - 3 Reserves 11,854 2,5481 - 4 Treasury shares (5,015) (258)1 - 5 Profit for the year 10,170 14,177

2 - Minority interests 2-3-1 113 364

Liabilities 216,620 188,744

A - Non-current liabilities 12,914 10,652

3 - Non-current liabilities bearing interest 2-3-4 7,469 7,0293 - 1 Finance lease liabilities 7,384 6,9313 - 2 Bank borrowings 5 163 - 3 Other borrowings 80 82

4 - Non-current liabilities not bearing interest 662 755 - Long-term provisions 2-3-2 934 1,245

6 - Long-term post-employment benefit obligations 2-3-3 1,107 585

7 - Deferred tax liabilities 2,742 1,718

B - Current liabilities 203,706 178,092

8 - Liabilities held for sale 2-2-6 82 245

9 - Current liabilities bearing interest 2-3-4 15,773 10,8109 - 1 Bank borrowings 11 1,1239 - 2 Finance lease liabilities 1,257 7909 - 3 Bank overdrafts 2,468 4,0819 - 4 Other borrowings 12,037 4,816

10 - Short-term provisions 2-3-2 4,289 4,950

11 - Current tax liabilities 1,506 2,702

12 - Trade and other payables 149,843 129,84212 - 1 Trade payables 118,244 101,67212 - 2 Customer prepayments 2,009 1,53012 - 3 Other payables 2-3-5 29,590 26,640

13 - Other current liabilities 2-3-5 32,213 29,543

TOTAL EQUITY AND LIABILITIES 304,961 276,794

Consolidated balance sheet Years ended December 31

EQUITY AND LIABILITIES



68 •

(in € thousands) 2006 2005Profit for the year (excluding minority interests) 10,163 14,100Income tax expense 4,418 5,168Depreciation of property, plant and equipment not allocated to the leasing business 2,683 1,795Depreciation of investment property 28 31Amortization of intangible assets 685 632Depreciation of property, plant and equipment allocated to the leasing business 3,583 11,285Impairment of non-current financial assets and trade receivables (1,533) (3,822)Impairment of inventories (355)(Gains)/losses on the disposal of property, plant and equipment and intangible assets (56) 68(Gains)/losses on the disposal of companies and businesses excluding discontinued operations (402)(Gains)/losses on the disposal of discontinued operations 1,219Change in provisions (449) (7,243)

Gross cash provided by operating activities (a) 18,765 23,233Change in inventories 3,916 (1,537)Change in long-term receivables 3,270 611Change in short-term receivables and other current assets (14,425) 13,129Change in trade payables 16,197 (460)Change in other short-term payables 5,438 (9,431)

Change in working capital (b) 14,397 2,312Income tax paid (c) (4,917) (6,821)

Net cash provided by operating activities (a+b+c =d) 28,244 18,724Acquisition of property, plant and equipment not allocated to the leasing business (2,248) (1,874)Acquisition of intangible assets (1,257) 344Disposal of property, plant and equipment not allocated to the leasing business 574 823Disposal of intangible assets 43 35Acquisition/disposal of property, plant and equipment allocated to the leasing business (3,084) (10,974)Acquisition of non-current financial assets (5,891) (1,738)Disposal of non-current financial assets 5,459 2,709Acquisition of companies and businesses, net of cash acquired (2,031) (1,126)Disposal of companies and businesses excluding discontinued operations, net of cash transferred 892Disposal of discontinued operations, net of cash transferred 2,903

Net cash used in investing activities (e) (7,544) (9,586)

1-3 Consolidated cash flow statementYears ended December 31



(in € thousands) 2006 2005Issuance of shares and share premiums 1,215New non-current liabilities bearing interest 589 75Repayment of non-current liabilities bearing interest (14) (226)Change in interest-bearing non-current liabilities related to the leasing business 453 328New current liabilities bearing interest 10,608 8,358Repayment of current liabilities bearing interest (6,118) (6,126)Change in interest-bearing current liabilities related to the leasing business 467 (1,158)Acquisition of treasury stock (7,648) (9,272)Disposal of treasury stock 2,032 1,900Dividends paid during the year (4,550) (4,451)

Net cash used in financing activities (f) (4,181) (9,357)Change in cash and cash equivalents (d+e+f) 16,520 (219)Cash and cash equivalents at beginning of year 60,064 60,048

Impact of changes in exchange rates 32 236Cash and cash equivalents at end of year 76,616 60,065

Information on cash flow items is provided in Note 2-2-10.Details on acquisitions and disposals of companies and businesses are provided in Note 2-5-1.



70 •

1-4 Consolidated statement of changes in equity

(in € thousands) Number of Share Additional Retained earnshares capital paid-in capital and other rese

December 31, 2004 30,000,000 16,038 54,072 15Fair value adjustmentsLoss arising on exercise of stock options (1,Currency translation adjustmentsOther movementsNet income/(expense) recognized directly in equity 0 0 (1,Profit for the year 14Total recognized income/(expense) 0 0 13Dividends paid (4,Changes related to employee benefitsIncrease in capital 265,000 143 966Treasury stock (1,265,000) (7,

December 31, 2005 29,000,000 16,181 55,038 16Fair value adjustmentsLoss arising on exercise of stock options (Currency translation adjustments (Other movements (Net income/(expense) recognized directly in equity 0 0 (Profit for the year 10Total recognized income/(expense) 0 0 9Dividends paid (4,Changes related to employee benefitsIncrease in capitalTreasury stock

December 31, 2006 29,000,000 16,181 55,038 22

Retained earnings and other reserves by category Dec. 31, 2006 Movements Dec. 31, 2005 Movemduring the year during the

Unavailable reserves 9,153 4,771 4,382 (2,Legal reserve 1,618 14 1,604Treasury stock reserves 5,015 4,757 258 (2,Other unavailable reserves 2,520 2,520

Distributable reserves 1,524 717 807Reserves related to employee benefits 651 241 410Currency translation reserves (68) (251) 183Other reserves 5,981 (2,116) 8,097 2Retained earnings 4,783 1,937 2,846 (Total retained earnings and other reserves 22,024 5,299 16,725 1



Additional Retained earnings Treasury Equity attributable Minority Total paid-in capital and other reserves stock to shareholders of interests equity

the parent company

54,072 15,598 (2,526) 83,182 350 83,532301 301 301

(1,794) (1,794) (1,794)423 423 423(32) (32) (14) (46)

0 (1,102) 0 (1,102) (14) (1,116)14,177 14,177 (77) 14,100

0 13,075 0 13,075 (91) 12,984(4,452) (4,452) (4,452)

350 350 350966 1,109 105 1,214

(7,846) 2,268 (5,578) (5,578)

55,038 16,725 (258) 87,686 364 88,050717 717 717

(859) (859) (859)(251) (251) (251)(169) (169) (244) (413)

0 (562) 0 (562) (244) (806)10,170 10,170 (7) 10,163

0 9,608 0 9,608 (251) 9,357(4,550) (4,550) (4,550)

241 241 2410 0

(4,757) (4,757) (4,757)

55,038 22,024 (5,015) 88,228 113 88,341

Dec. 31, 2005 Movements Dec. 31, 2004during the year

4,382 (2,268) 6,6501,604 1,604

258 (2,268) 2,5262,520 2,520

807 349 458410 350 60183 423 (240)

8,097 2,875 5,2222,846 (602) 3,448

16,725 1,127 15,598



72 •

Notes to the consolidated financial statements

General information2.1.1 Summary of significant accounting policies2.1.2 Scope of consolidation and changes during

the year2.1.3 List of consolidated companies2.1.4 Segment information

Balance sheet – Assets2.2.0 Intangible assets2.2.1 Goodwill2.2.2 Property, plant and equipment2.2.3 Investment property2.2.4 Financial assets2.2.5 Other non-current assets2.2.6 Assets and liabilities held for sale

and discontinued operations2.2.7 Inventories2.2.8 Trade receivables2.2.9 Other receivables and other current assets

2.2.10 Cash and cash equivalents

Balance sheet – Equity and liabilities2.3.1 Equity2.3.2 Long- and short-term provisions2.3.3 Pension and other post-employment benefit

obligations2.3.4 Current and non-current liabilities bearing

interest2.3.5 Other payables and other current liabilities

Income statement2.4.1 Revenue from continuing operations2.4.2 Personnel costs2.4.3 External expenses2.4.4 Depreciation, amortization and provisions2.4.5 Impairment losses on current assets, net2.4.6 Other operating income and expenses2.4.7 Financial income and expenses –

operating activities2.4.8 Other non-recurring operating income

and expenses2.4.9 Other financial income and expense

2.4.10 Income taxes2.4.11 Earnings per share

Additional information2.5.1 Notes to the consolidated cash flow statement2.5.2 Risk factors2.5.3 Off-balance sheet commitments2.5.4 Contingent liabilities2.5.5 Management remuneration2.5.6 Related-party transactions2.5.7 Events after the balance sheet date2.5.8 Assessments made by Management

and sources of uncertainty

Notes to the consolidated financial statementsfor the year ended December 31, 2006



• IFRS 6, Exploration for and Evaluation of MineralResources. • IFRS 1 and IFRS 6 (Amendments), clarifying an exemp-tion from the requirement to provide comparative disclo-sures.• IAS 19 (Amendment), Actuarial Gains and Losses, GroupPlans and Disclosures.• IAS 21 (Amendment), The Effects of Changes in ForeignExchange Rates – Net Investment in a Foreign Operation.• IFRIC 4, Determining whether an Arrangement Containsa Lease.• IFRIC 5, Rights to Interests arising from Decommissioning,Restoration and Environmental Rehabilitation Funds.• IFRIC 6, Liabilities arising from Participating in a SpecificMarket – Waste Electrical and Electronic Equipment.

New standards and revised standards not applicableas of December 31, 2006At the balance sheet date, the following standards andinterpretations had been published by the IASB but werenot yet effective:• IFRS 7, Financial Instruments: Disclosures (effective forannual periods beginning on or after January 1, 2007).• IFRIC 7, Applying the Restatement Approach under IAS29 – Financial Reporting in Hyperinflationary Economies(effective for annual periods beginning on or after March 1,2006).• IFRIC 8, Scope of IFRS 2 – Share-based Payment (effec-tive for annual periods beginning on or after May 1, 2006).• IFRIC 9, Reassessment of Embedded Derivatives (effec-tive for annual periods beginning on or after June 1, 2006).• IFRIC 10, Interim Financial Reporting and Impairment(effective for annual periods beginning on or afterNovember 1, 2006).• IFRIC 11, Group and Treasury Share Transactions(effective for annual periods beginning on or after March1, 2007).• IFRIC 12, Service Concession Arrangements (effectivefor annual periods beginning on or after January 1, 2008).• IFRS 8, Operating Segments (effective for annual periodsbeginning on or after January 1, 2009).IFRIC 10, 11 and 12, as well as IFRS 8, had not beenapproved by the European Union as of December 31,2006.

The Econocom Group has begun to analyze these newstandards and interpretations, and at this stage does notconsider that their adoption will have a material impact onthe consolidated financial statements.

2-1-1 Summary of significantaccounting policies

A. Basis of preparation

In accordance with EC regulation 1606/2002, companieslisted in the European Union are required to prepare theirconsolidated financial statements based on InternationalFinancial Reporting Standards (IFRS) as approved by theEuropean Union. The consolidated financial statements ofthe Econocom Group for the year ended December 31,2006 have therefore been prepared in compliance withIAS/IFRS and the related interpretations approved by theEuropean Union applicable for accounting periods begin-ning on or after January 1, 2006.

The consolidated financial statements of the EconocomGroup are presented in thousands of euros, unless oth-erwise specified, and include the accounts of EconocomGroup SA/NV and its subsidiaries.

The financial statements of the Group and the parentcompany were approved by the Board of Directors onMarch 13, 2007 and will be submitted to shareholdersfor approval at the next Annual General Meeting, on May15, 2007.

They will be available to shareholders as of May 1, 2007.

Amendments to published standards, new standards and interpretations applicable in 2006The Group has adopted all the new and revised standardsand interpretations published by the InternationalAccounting Standards Board (IASB) and the InternationalFinancial Reporting Interpretations Committee (IFRIC), asapproved by the European Union and which were applica-ble to the Group’s operations as from January 1, 2006.

The following new standards, amendments to existingstandards and interpretations were compulsory in 2006but did not have a material impact on the EconocomGroup:• IAS 39 and IFRS 4 (Amendments), Financial GuaranteeContracts.• IAS 39 (Amendment), Cash Flow Hedge Accounting ofForecast Intragroup Transactions.



74 •

A list of consolidated companies is provided in Note 2-1-3.All intercompany balances and transactions are eliminat-ed on consolidation.

Minority interests are reported as a separate componentof equity, and are also presented separately in the incomestatement.

C. Translation of the financial statements of foreign entities

The financial statements of foreign entities are translatedinto euros, the Econocom Group’s presentation currency.Assets and liabilities are translated at the year-endexchange rate and income and expense items are trans-lated using the average exchange rate for the year. Foreignexchange gains and losses resulting from this accountingtreatment as well as from the re-translation of openingequity of subsidiaries using year-end exchange rates arerecognized in equity under reserves. When a foreign enti-ty is sold, such exchange differences are taken to theincome statement as part of the gain or loss on sale.

Measurement methodsThe consolidated financial statements have been preparedunder the historical cost convention, except for certainclasses of assets and liabilities in accordance with the rulesprovided for in IFRS.

B. Scope and methods of consolidation

Companies over which Econocom Group directly or indi-rectly exercises exclusive control are fully consolidated.

Companies controlled and operated jointly by EconocomGroup and a limited number of partners are proportion-ately consolidated.

Companies over which the Group directly or indirectlyexercises significant influence are accounted for by theequity method. Significant influence is deemed to existwhen the percentage of voting rights held is equal to ormore than 20%.

Consolidation and deconsolidation take place on the dateof acquisition or sale of the related shares.

Dec. 31, 2006 Dec. 31, 2005 Dec. 31, 2004

Year-end rate Average rate Year-end rate Average rate Year-end rate Average rateUSD 0.759301 0.798280 0.842318 0.799955 0.734160 0.802752GBP 1.489203 1.465361 1.472863 1.464372 1.418339 1.468497CHF 0.622316 0.635269 0.643956 0.647098 0.648130 0.647442



that are largely independent of the cash inflows from otherassets or groups of assets. The procedures for testingCGUs for goodwill impairment are described in Note F.6.

Impairment losses recognized for goodwill may not bereversed.

E.2. Negative goodwillAny excess of the Group’s interest in the net fair value ofthe identifiable assets and liabilities of a company acquiredover the cost of the acquisition is accounted for as nega-tive goodwill.

Negative goodwill is recognized immediately in the incomestatement during the period in which the acquisition takesplace.

F. Non-current assets

F.1. Intangible assetsAcquired intangible assets are stated at cost less anyaccumulated amortization and any accumulated impair-ment losses.

The Econocom Group has two types of intangible assets:

• Licenses, which are identifiable non-monetary assetswithout any physical substance, whose economic bene-fits will flow to the entity. These assets are measured atcost.

• Acquired software applications, which are recognizedas intangible assets except when they are indispensablefor the operation of a computer, in which case they arerecognized as computer hardware.

Subsequent expenditure is recognized as incurred, unlessit generates probable future economic benefits that canbe directly attributed to the expenditure, and the assetarising as a result of the expenditure is identifiable withinthe meaning of IAS 38.

After initial recognition intangible assets are carried at theircost less any accumulated amortization and any accumu-lated impairment losses.

D. Translation of foreign currency transactions

Foreign currency transactions of subsidiaries are initiallyrecorded in their functional currency using the exchangerates prevailing at the dates of the transactions.

At the balance sheet date, monetary assets and liabilitiesdenominated in foreign currencies are translated at theyear-end rate and any resulting foreign exchange gains orlosses are recorded in the income statement.

E. Goodwill

In accordance with IFRS 3, the assets, liabilities and con-tingent liabilities acquired/assumed as part of a businesscombination are measured at fair value at the acquisitiondate.

Goodwill represents the excess of the cost of an acquisi-tion over the fair value of the Econocom Group’s equity inthe net identifiable assets, liabilities and contingent liabili-ties of the acquired company at the acquisition date.

The cost of an acquisition corresponds to the fair values,at the date of exchange, of assets given, liabilities incurredor assumed, and equity instruments issued by the acquirer,plus any costs directly attributable to the acquisition.

The Group applies the purchase method in accounting forgoodwill, recording goodwill in the balance sheet at itscost less any accumulated impairment losses.

E.1. Positive goodwillAny excess of the cost of acquisition over the Group’sinterest in the net fair value of the identifiable assets and lia-bilities of a company acquired, determined at the date ofacquisition, is accounted for as “Goodwill” in assets in thebalance sheet.

Goodwill is tested for impairment at least once a year andmore often if there is an indication of impairment. For thepurpose of these tests, goodwill is allocated to CashGenerating Units (CGUs), which correspond to the small-est identifiable groups of assets generating cash inflows



76 •

F.3. LeasesF.3.1. Finance leasesThe Group’s finance leases are mainly refinanced con-tracts, whereby equipment and related contracts are soldto refinancing institutions at an all-inclusive price repre-senting the present value of future minimum lease pay-ments receivable and the residual value of the equipment.Residual value represents the amount for which the Groupundertakes to repurchase the equipment upon expirationof the lease. Lease payments due by lessees are paiddirectly to the refinancing institutions on a non-recoursebasis, which means that the Group transfers the risk ofpayment default. From a legal standpoint, EconocomGroup relinquishes ownership of the equipment on thedate of sale and recovers ownership at the end of the leaseterm by repurchasing the equipment.

Revenue, cost of sales and residual interest are recog-nized progressively as assets are delivered, pro rata to theamount of each delivery.

IAS 17 states that initial recognition of a lease must takeplace at the commencement of the lease, i.e. the datefrom which the lessee is entitled to exercise its right to usethe leased asset. Article 5.1 of the General SalesConditions of the Group’s leasing companies defines thisdate as the date on which the leased asset is delivered.

Refinanced contractsRefinanced contracts are accounted for as follows:

• Related revenue corresponds to the present value offuture minimum lease payments (corresponding to thepayments that the lessee is required to make throughoutthe collection period and the lease term).

• The cost of sales represents the purchase cost of theasset.

• The company’s residual interest in the leased assets cor-responds to an estimated market value at the end of thelease term, calculated using an accelerated diminishingbalance method of depreciation, based on the original pur-chase cost of each item of equipment. The present valueof this residual interest is deducted from the cost of sales.

Intangible assets are amortized by the straight-line methodover their useful lives, which range from one to six years forsoftware applications and licenses.

F.2. Property, plant and equipmentItems of property, plant and equipment are carried atcost less any accumulated depreciation and any accu-mulated impairment losses, except for land which is notdepreciated.

A. Acquisition costThe cost of items of property, plant and equipment corresponds to their purchase price, including costsdirectly attributable to the acquisition. Subsequentexpenditure is recognized in the carrying amount of anitem of property, plant and equipment if the recognitionprinciples under IAS 16 are met, i.e., if it is probablethat future economic benefits associated with the recognized asset will flow to the entity and the cost ofthe asset can be measured reliably.

Assets held under leases represent non-refinanced con-tract extensions which are accounted for as operatingleases. They are recorded in the balance sheet and aredepreciated on a straight-line basis to write them downto their residual value which represents the Company’sresidual interest in the asset at the end of the lease term.

B. Depreciation Depreciation is calculated using the diminishing balancemethod for computer equipment and the straight-linemethod for other assets, in both cases based on cost lessany residual value. It starts from the date on which an assetis ready for use and is calculated over the estimated use-ful life of the asset concerned.

Useful lives (in years)Buildings 20 – 50 Fixtures 10Computer equipment 3Vehicles 5Furniture 10



Non-refinanced contractsNon-refinanced contracts mainly concern Promodata SNCand are being transferred progressively to EconocomLocation SAS. They are accounted for as follows:

Balance sheetThe value of the lease receivables is recorded in thebalance sheet rather than the value of the equipment.

Income statement• Income and expenses are recognized up-front as assetsare delivered for the following line items:– Revenue: present value of future minimum lease payments– Cost of sales: fair value of assets (purchase cost)

• The monthly financial income corresponding to the dif-ference between the lease payments invoiced monthlyand the monthly portion of the present value of said pay-ments is recognized on a periodic basis.

F.3.2. Operating leasesOperating leases – primarily representing contract exten-sions – are not material. The Econocom Group retains allthe risks relating to operating leases as the significant risksand rewards incidental to ownership of the assets con-cerned are not transferred.

Balance sheetThe leased equipment is recorded as an asset in the bal-ance sheet and depreciated on a straight-line basis towrite it down to its residual value which represents thecompany’s residual interest in the asset at the end of thelease term.

Income statementIncome statement entries are made on a periodic basiswith the invoiced lease payment recorded as revenue andthe depreciation described above recorded as anexpense.

F.3.3. Residual valueAs stated above, leased equipment is repurchased fromrefinancing institutions at the end of the lease term. Theresidual value of these assets represents a liability – whichis generally long-term – and is discounted using the samemethod as for the related lease.

• Any positive difference between this residual interest andthe residual value (representing the repurchase commit-ment) is recorded under financial assets. If the differenceis negative, it is classified as a liability.

Specific cases of bridges on Roll Out Facility (ROF)and Technology Refresh Option (TRO) contractsThese contracts systematically start with an investmentperiod – termed a “collection period” – which precedesthe start of the initial lease period.

In order to finance investments made during the collec-tion period, a non-recourse sale is made (so that there isno longer any client credit risk) to a refinancing institution.Econocom accounts for this financing operation as a sale,resulting in the replacement of “revenue accruals” in thebalance sheet by a receivable owed by the refinancer.

The fact that the equipment is repurchased at the end ofthe collection period in order to subsequently be refi-nanced could suggest that this transaction is purely afinancing operation but is, in the opinion of the Board ofDirectors, irrelevant in terms of the substance of the over-all operation. The Board of Directors considers that thistype of operation, which is dealt with for administrativereasons in two phases – a bridge during the collectionperiod followed by subsequent refinancing at the begin-ning of the initial lease period – should be considered insubstance as a single transaction. This principle is onlyapplied if the bridge and the subsequent refinancing arecarried out with the same refinancer and if the refinancingconditions are defined at the time of the bridge. These fac-tors demonstrate the unity of the transaction in substance.

Contracts in the collection period in respect of whichsuch refinancing has been put in place and for which thesale of future lease payments had not taken place as ofDecember 31, 2006 represent ?13.3 million comparedwith ?10.3 million the previous year. This refinancing ofinvestments in the collection period thus contributed?13.3 million to cash and cash equivalents (presentedin Note 2-2-10) as of December 31, 2006 and ?10.3million as of December 31, 2005.



78 •

A CGU is impaired if its carrying amount exceeds its recov-erable amount – which represents the higher of its fairvalue less costs to sell and its value in use. In such a casean impairment loss is recorded as an operating expenseand allocated in priority against goodwill.

a) Identifying CGUsCGUs correspond to the Group’s businesses by country.Goodwill is tested by business and by country and bycomparing the carrying amount of the assets in the CGUwith the recoverable amount of the CGU.Investment properties are tested individually.

b) Calculating the recoverable amount of CGUs The valuation is made by reference to net discountedfuture cash flows, taking a terminal value into account,based on a constant future growth rate of revenues gen-erated by the asset concerned.

Cash flow projections are based on a maximum period of4 years. The discount rate used for future cash flows isthe pre-tax WACC (weighted average cost of capital) ofthe business. The growth rate used depends on the eco-nomic outlook of each of the businesses.

If this valuation identifies an impairment loss, it is recog-nized as impairment of goodwill.

In accordance with IAS 36, goodwill impairment lossesare irreversible.

G. Assets and liabilities held for saleand discontinued operations

A non-current asset (or disposal group) is classified as heldfor sale if its carrying amount will be recovered principallythrough a sale transaction rather than through continuinguse and if the sale is highly probable. These assets anddisposal groups are presented separately from otherassets or groups of assets when the amount concerned ismaterial. A non-current asset (or disposal group) classifiedas held for sale is measured at the lower of its carryingamount and fair value less costs to sell.

The Econocom Group’s residual interest in the transferredassets corresponds to an estimated market value at theend of the lease term calculated using an accelerateddiminishing balance method of depreciation, based on theoriginal purchase cost of each item of equipment. Thisresidual interest represents a long-term asset which is dis-counted using the same method as for the related lease.

The positive or negative differences between the futurevalue of equipment and the financial residual value are rec-ognized on a contract-by-contract basis as financial assetsor liabilities respectively.

F.4. Investment propertyInvestment property is property held directly or under afinance lease to earn rentals and/or for capital appreciation.

Investment property is initially recognized at cost, includingtransaction costs. It is subsequently measured at cost lessaccumulated depreciation and accumulated impairmentlosses.

F.5. Other financial assetsInvestments in non-consolidated companies are recordedat fair value. Any unrealized gains or losses are recognizeddirectly in equity. When the investment is sold, the accu-mulated gain or loss previously recognized in equity isincluded in profit or loss for the period.

F.6. Impairment of non-current assetsAt each reporting date the Econocom Group assesseswhether there are any internal or external sources of infor-mation or evidence that indicates that a non-current assetmay be impaired. If such an indication exists an impair-ment test is performed by measuring the recoverableamount of the asset, in the same way as the impairmenttests carried out on an annual basis for goodwill and intan-gible assets with indefinite useful lives.

For the purposes of these tests, assets are grouped intoCash Generating Units (CGUs). A CGU is the smallestidentifiable group of assets that generates cash inflowsthat are largely independent of the cash inflows from otherassets or groups of assets.

The value in use of a CGU is determined based on thepresent value of the future net cash flows expected to bederived from the CGU.



A contingent liability is (i) a possible obligation that arisesfrom past events whose existence will be confirmed onlyby the occurrence or non-occurrence of one or moreuncertain future events, or (ii) a present obligation that isnot recognized because the amount of the obligation can-not be measured with sufficient reliability. No provision isrecorded for contingent liabilities.

J.1. Long-term provisionsLong-term provisions mainly correspond to restructuringprovisions recorded as a result of:• Reorganization measures taken at the time of a busi-

ness combination;• The discontinuation of a business line or measures

implemented to turn around the financial situation of anentity;

• Steps taken to improve productivity. Restructuring provisions reflect the company’s obligationsat the balance sheet date due to commitments made tothird parties.

J.2. Short-term provisionsShort-term provisions primarily correspond to provisionsfor claims and litigation. They are measured by referenceto the amount of the probable outflow of resourcesrequired to settle claims and disputes in progress where anobligating event exists at the balance sheet date.

Provisions for claims and litigation comprise the estimat-ed amount required to settle claims and disputes filed bythird parties. They also include costs concerning employ-ee-related and tax disputes. A provision is booked for taxdeficiencies notified by the tax authorities if the companyconcerned has contested or intends to contest thereassessment and considers that it is not highly probablethat the outcome of the appeal procedure will be favor-able. Any portion of the reassessment that has not, or willnot, be contested is recorded as a liability as soon as therelated amount is known.

K. Employee benefits

The Econocom Group’s employees may receive retirementbenefits in addition to statutory pension benefits payablein accordance with the legislation in force in the countriesconcerned. These forms of employee benefits are fund-ed by the Econocom Group under defined contributionplans (pensions) and defined benefit plans (retirementindemnities).

A discontinued operation is a component of an entity thateither has been disposed of, or is classified as held forsale, and represents a separate major line of business orgeographical area of operations for the Econocom Groupor is a subsidiary acquired exclusively with a view to resale.

Income and expense and cash flow items relating to dis-continued operations are presented separately in the finan-cial statements for all periods presented if the amountsconcerned are material.

H. Inventories

Inventories are measured at the lower of cost and net real-izable value. Cost is measured using the weighted averagecost method. Net realizable value is the estimated sellingprice in the ordinary course of business less the estimatedcosts necessary to make the sale.

I. Prepaid expenses

Prepaid expenses correspond to expenses paid during agiven period that relate to subsequent periods. They arerecorded under “Other current assets”.

J. Provisions and contingent liabilities

A provision is recognized when the Group has a present(legal or constructive) obligation as a result of a pastevent, it is probable that an outflow of resourcesembodying economic benefits will be required to settlethe obligation, and a reliable estimate can be made ofthe amount of the obligation.

A restructuring provision is recorded when an entity hasa detailed formal plan for the restructuring and hasannounced its main features to those affected by it or hasstarted to implement the plan. The amount recognizedrepresents the best estimate of the expenditure expect-ed to be required to settle the present obligation at thebalance sheet date. The discount rate reflects current mar-ket assessments of the time value of money and the risksspecific to the liability.



80 •

have been enacted or substantially enacted by the bal-ance sheet date and are expected to apply when therelated deferred income tax asset is realized or thedeferred income tax liability is settled.

Deferred tax assets are only recognized to the extent that itis probable that future taxable profit will be available againstwhich deductible temporary differences or tax loss carryfor-wards can be utilized.

Taxes relating to items recognized directly in equity arerecorded in reserves.

M. Share-based payment

Stock purchase and subscription options are granted toGroup senior management and certain non-managerialemployees. As prescribed in IFRS 2 – Share- basedPayment, stock options are measured at the grant dateby reference to the fair value of the equity instrumentsgranted. The related expense is recognized in personnelcosts over the vesting period, with a correspondingincrease in equity.

In accordance with IFRS 2, only plans granted to employ-ees after November 7, 2002 that had not vested as ofJanuary 1, 2005 have been measured at fair value and recognized in personnel costs. Plans granted prior toNovember 7, 2002 have not been measured or recognized.

The following accounting treatment is applied for share-based payment schemes within the Econocom Group:

a) Equity instrumentsIn accordance with IFRS 2, stock options are valued at thedate of grant using the Black & Scholes option pricing model.Changes in value subsequent to the date of grant have noimpact on this initial valuation.

The Econocom Group’s obligation under defined contri-bution plans is limited to the payment of contributions pro-vided for in the contract. Contributions that fall due morethan 12 months after the balance sheet date are discount-ed, using a rate determined by reference to market yieldson high quality corporate bonds.

A defined benefit plan defines an amount of benefits thatan employee will receive. Under this form of plan, the actu-arial risk (that benefits will cost more than expected) andinvestment risk (that assets invested will be insufficient tomeet expected benefits) fall to the Group. A provision is recorded to cover the Econocom Group’sobligation to pay retirement indemnities to its employeesin France in accordance with the collective bargainingagreements in force within the Group’s French compa-nies. This provision is calculated using the projected unitcredit method, based on assumptions that include thefollowing:

• Contractual entitlements based on length-of-service;• Staff turnover rate;• Annual salary increases;• The life expectancy of employees, based on statisticaltables; • A discount rate for the retirement benefit obligation,which is reviewed on a yearly basis.

L. Income tax

The “Income tax” line includes both current taxes (payable ontaxable profit for the period and any amendments from prioryears) and deferred taxes.

Deferred taxes are accounted for using the liability methodfor all temporary differences existing at the balance sheetdate between the tax bases of assets and liabilities andtheir carrying amounts in the consolidated financial state-ments, except for the specific cases provided for in IAS12, Income Taxes (notably goodwill). Deferred tax assetsand liabilities are determined using tax rates and laws that



O. Financial instruments: recognition and measurement

The Group recognizes and measures financial assets andl iabi l i t ies in accordance with IAS 39 – FinancialInstruments: Recognition and Measurement.

Financial assets and liabilities include non-current assetsand current assets, such as trade receivables, money mar-ket securities and securities held for sale, including deriv-atives (which the Econocom Group does not use), as wellas cash and cash equivalents.

Financial liabilities encompass loans and other borrow-ings, bank overdrafts, derivatives and trade payables.

O.1. Financial assets at fair value through profit or lossFinancial assets at fair value through profit or loss are clas-sified as held for trading – i.e., they are acquired principal-ly for the purpose of generating gains through short-termfluctuations in the reference price.

O.2. Loans and receivablesLoans and receivables are non-derivative financial assetswith fixed or determinable payments that are not quotedin an active market and which the entity does not intend tosell in the near term. Trade receivables form part of thiscategory.

These assets are recognized at fair value at the transactiondate (or commitment date), including any transactioncosts. At each balance sheet date, they are measured atamortized cost using the effective interest method. Theyare tested for impairment at each balance sheet date whenthere is objective evidence of impairment. Where appropri-ate, provisions for the risk of non-recovery are recordedin the income statement which may be subsequentlyreversed.

The value of options takes into account their expectedlife, as stated in the specific stock option contractssigned between each beneficiary and the Group. It is alsoweighted by the probability, at the balance sheet date,that the beneficiary will attain any objectives required toexercise the options. The final value obtained is subse-quently recognized in personnel costs on a straight-linebasis over the vesting period, with a correspondingadjustment to equity.

b) International Phantom Share planThe Group’s Phantom Share plan provides for the right toa bonus for all persons who were employees of theEconocom Group on April 30, 2005, which is payableon March 31, 2008. However, this bonus will only bepayable if (i) the individual is still an employee of theEconocom Group on March 31, 2008, and (i i ) theEconocom share price reaches an average of at least?12 during March 2008.The amount of the bonus due to the eligible employees isequal to the difference between the average share price inMarch 2008 and ?6, multiplied by 350.

As this right has a trigger threshold and thus constitutes adigital option, modeling was entrusted to an independentfirm of actuaries which created a specific binomial modelto measure the value of the overall bonus at the balancesheet date.

This bonus will be paid in the same way as standard com-pensation and included in the employees’ pay slips. It istherefore recognized in personnel costs, after taking intoaccount the related social security charges specific to eachcountry, with a corresponding liability recorded in the balance sheet.

N. Treasury stock

Treasury stock is recorded as a deduction from equity.Gains or losses arising from the purchase, sale or cancel-lation of treasury shares have no impact on the incomestatement.



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O.4. Non-current liabilities bearing interest (bank borrowings and other financial liabilities)Bank borrowings and other financial liabilities are recognizedat fair value at the transaction date. In most cases, this cor-responds to the price agreed at the time of the transaction,plus any transaction costs. At each balance sheet date, theyare measured at amortized cost using the effective interestmethod.

O.5. FactoringCertain subsidiaries of the Econocom Group use factoringto cover their cash requirements. Factoring involves thetransfer of title of trade receivables and all associated rightsto the factor, including the right to receive the related cashinflows.

In accordance with IAS 39 – Financial Instruments:Recognition and Measurement, where substantially all therisks and rewards of ownership relating to trade receiv-ables are transferred, the receivables are derecognized.Where this is not the case they are maintained in the bal-ance sheet after the transfer and a financial liability isrecorded to reflect the cash received.

P. Cash and cash equivalents

Cash and cash equivalents consist of current account bal-ances, units in money market funds and money-marketsecurities which can be sold on short notice and whichdo not carry a significant risk of impairment in the eventof changes in interest rates. Short-term investments aremarked to market at each balance sheet date.

Q. Presentation of the income statement

Q.1. RevenueThe Group recognizes revenue from the sale of goods andrendering of services when it is probable that future eco-nomic benefits will flow to the entity concerned and thesebenefits can be measured reliably. Revenue is measured

Derecognition Loans and receivables are derecognized when: • the contractual rights to the cash flows from the assetexpire;• the asset has been transferred, i.e., the contractual rightsto receive the cash flows of the asset have been trans-ferred as well as substantially all the risks and rewards ofownership, or control over the asset.

If the entity retains control over the asset, it retains in itsbalance sheet the portion of the asset that has not actu-ally been sold.

If the derecognition criteria are met, the accounting treat-ment is the same as for a disposal. If the derecognitioncriteria are not met, the assets are retained on the balancesheet. In this case any funds received from the transfer ofthe assets are considered as borrowings secured by thetransferred assets.

O.3. Available-for-sale securitiesAvailable-for-sale securities correspond to shares in non-consolidated companies. They are recognized at fair valueat the transaction date, including any transaction costs.After initial recognition, they are measured at market valueat the balance sheet date, which the Econocom Groupdeems to be their fair value. Any changes in market valueare recorded in equity.

Available-for-sale securities are tested for impairmentwhenever there is objective evidence that they may beimpaired. Impairment losses are recorded in the incomestatement and may be reversed through profit or loss.



Q.5. Earnings per shareBasic earnings per share is determined by dividing profit bythe weighted average number of ordinary shares outstand-ing during the year – a calculation that factors in the numberof treasury shares held.

Diluted earnings per share is calculated by adjusting theweighted average number of ordinary shares outstand-ing to assume conversion of all dilutive potential ordinaryshares issued by the Group or any of its subsidiaries.Dilution is calculated separately for each instrument,based on market prices at the year-end and excludinganti-dilutive instruments. Non-dilutive stock options arenot included in the calculation.

R. Segment information

The Econocom Group’s operating activities are structuredby strategic area and are managed based on the type ofservices sold in a given economic environment.

The Group uses business segments as its primary report-ing format and geographical segments as its secondaryreporting format.

Segment results, assets and liabilities include componentsthat are directly or indirectly attributable to the segment.Segment investments correspond to the acquisition ofproperty, plant and equipment and intangible assets.

Inter-segment sales and transfers are carried out on arm’slength terms.

at the fair value of the consideration received or receiv-able, net of VAT, taking into account the amount of anytrade discounts and volume rebates allowed by the enti-ty, and after eliminating inter-company transactions.

Revenue from sales of goods is recognized only when theentity has transferred to the buyer the significant risks andrewards of ownership of the goods.

Revenue generated from the rendering of services overseveral accounting periods is recognized by reference tothe stage of completion of the transaction at the balancesheet date. The percentage of completion is obtained bycomparing the amount of costs incurred at the balancesheet date with the estimated total costs of the transac-tion. If it seems that total identified costs will exceed theprice that the customer is prepared to pay, the expectedloss on the transaction is recognized immediately as anexpense.

IAS 17 is applied for the recognition of Financial Servicesrevenue, based on the type of contract as specified inparagraph F.3. above.

Q.2. Personnel costsPersonnel costs include all sums paid and accrued by theGroup in relation to its employees, including profit-shar-ing and stock option expenses.

Q.3. Other non-recurring operating income and expensesThis caption includes an extremely limited number ofincome and expense items that are infrequent, unusualand have a material impact on the consolidated financialstatements. The Econocom Group presents these itemson a separate line in the income statement in order tofacilitate the assessment of its recurring operating performance.

Q.4. Discontinued operations“Discontinued operations” corresponds to profit or lossfor the period, net of taxes, of a company or group ofmajor assets (disposal group) that is held for sale, or of abusiness activity that has been discontinued.



84 •

B. Changes in the scope of consolidation

B.1 Acquisitions, company formations, and purchases of additional equity interests

B.1.1 AcquisitionsIn September 2006 Econocom Products and SolutionsSAS acquired the B-to-B business of Avenir Telecom – acompany specialized in mobile telephony services in thesouth-east of France.

B.1.2 Formation of a holding companyIn November 2006, EFS International BV was set up toact as the holding company for the Group’s FinancialServices business. Based in Holland, EFS International BVis wholly owned by Econocom Group SA/NV and hastaken over Econocom Group’s stake in EconocomNederland BV.

B.1.3 Purchases of additional equity interestsOn June 30, 2006, Econocom Managed Services SA/NVbought out a 22.1% minority stake in Econocom TelecomServices, raising its interest in the company to 96.68%.Additional purchase consideration on this acquisition willbe paid in April 2007. Also during the year, Econocom Group SA/NV acquiredthe remaining 35% of Econocom Albis GmbH that it didnot already own.

B.2 Disposals and liquidations

B.2.1 DisposalIn June 2006, Econocom Services BV – a Dutch com-pany specialized in mainframe services (particularly forIBM) – was sold as it no longer fit with the Group’s corebusiness.

B.2.2 LiquidationThe French company Econocom.com SA was liquidatedin December 2006 as it had lain dormant since 2003.

The Group’s business segments are as follows:

• Financial Services: the financing and administrativemanagement of corporate IT and telecom infrastructures.

• Managed Services: – a full range of IT resource management services, includingconsulting, facilities management and support services. – for A2Z companies, a specific service offering tailoredto the requirements of SMEs, encompassing comprehen-sive management of workstations and communicationstechnology, invoiced based on a monthly cost per user.

• Products and Solutions: services ranging from thesale of products (PCs, laptops, servers, printers andlicenses) to systems integration.

• Telecom Services: comprehensive management oftelecom resources.

The Group’s geographical segments correspond to thefollowing six areas: France, Belgium/Luxembourg, theNetherlands, Spain, Italy and other countries.The Group’s segment reporting is prepared based on thesame accounting methods as those used for the consol-idated financial statements.

S. Other information

Current assets and liabilities are those assets and liabilitiesthat the entity expects to be able to realize/settle either inits normal operating cycle or within twelve months afterthe balance sheet date.

2-1-2 Scope of consolidationand changes during the year

A. Scope of consolidation

The consolidated financial statements of the EconocomGroup as of December 31, 2006 include the accounts ofthe companies listed in section 2-1-3.




2-1-3 List of consolidated companies

Fully-consolidated companies

Company Registered VAT No. % interest Immediate holding companyoffice

2006 2005Econocom SAS Clichy 99.99% 99.99% Econocom Group SA/NVEconocom Location SAS Clichy 100.00% 99.99% Econocom Lease SA/NVAtlance France SAS Clichy 100.00% 100.00% Econocom Location SASG.I.E. Econocom Clichy 41.67% 41.67% Econocom Group SA/NV

58.33% 58.33% Econocom SASEconocom.com SA (1) Clichy 99.99% Econocom Group SA/NVEconocom Products & Solutions BELUX SA/NV Brussels BE 426 851 567 99.99% 99.99% Econocom Group SA/NV

0.01% 0.01% Econocom Managed Services SA/NVEconocom Managed Services SA/NV Brussels BE 432 093 428 100.00% 100.00% Econocom Group SA/NVEconocom Telecom Services SA (2) Brussels 96.68% 74.57% Econocom Managed Services SA/NVEconocom Telecom Sprl Brussels 100.00% 100.00% Econocom Telecom Services SAAtlance SA/NV Brussels BE 476 489 635 99.93% 99.93% Econocom Lease SA/NV

0.07% 0.07% Econocom Managed Services SA/NVEconocom Products & Solutions Luxembourg SA Luxembourg 100.00% 100.00% Econocom Products and Solutions Belux SA/NVEconocom Luxembourg SA (3) Luxembourg 100.00% Econocom Managed Services SA/NV

100.00% Econocom Lease SA/NVEconocom Lease SA/NV Brussels BE 431 321 782 100.00% 100.00% Econocom Group SA/NVEconocom Nederland BV (4) Houten 100.00% Econocom Group SA/NV

100.00% Econocom Financial Services International BVEconocom Albis GmbH (5) Hamburg 100.00% 65.00% Econocom Group SA/NVEconocom Expert International Holding BV Houten 50.10% 50.10% Econocom Group SA/NVEconocom Product Services BV Houten 100.00% 99.94% Econocom Nederland BVEconocom Services BV (6) Houten 95.00% Econocom Nederland BVEconocom UK Ltd Richmond 100.00% 100.00% Econocom Group SA/NVEconocom SA (Spain) Madrid 99.98% 99.98% Econocom Group SA/NV

0.02% 0.02% Econocom SASEconocom Locazione Italia SPA Milan 93.57% 93.57% Econocom Group SA/NV

6.43% 6.43% Econocom SASAperleasing Milan 95.00% 95.00% Econocom Locazione Italia SPAEconocom USA Inc Memphis 100.00% 100.00% Econocom Group SA/NVEconocom Promodata France SA Clichy 100.00% 100.00% Econocom Nederland BVPromodata SNC Clichy 100.00% 100.00% Econocom Promodata France SAEconocom Products and Solutions SAS Les Ulis 99.56% 99.56% Econocom Managed Services SA/NVEconocom Managed Services SAS Les Ulis 100.00% 100.00% Econocom Products and Solutions SASSynopse SAS Les Ulis 100.00% 100.00% Econocom Managed Services SAS (France)SCI Alexandre Les Ulis 99.90% 99.90% Econocom Products and Solutions SASEconocom France SAS Clichy 100.00% 100.00% Econocom Group SA/NVInfoconseil SARL Les Ulis 100.00% 100.00% Econocom Products and Solutions SASEconocom Telecom BV Eindhoven 100.00% 100.00% Econocom Telecom Services SA(formerly For Connected BV)A2Z Holding NV Wemmel 100.00% 100.00% Econocom Group SA/NVA2Z Solutions NV Wemmel 100.00% 100.00% A2Z Holding NVData Networks France SARL Clichy 100.00% 100.00% A2Z Holding NVEFS International BV (7) 100.00% Econocom Group SA/NV

(1) In December 2006, Econocom.com was liquidated as it had lain dormant since 2003.(2) In June 2006, Econocom Group SA/NV bought out a 22.1% minority stake in Econocom Telecom Services SA.(3) Econocom Managed Services SA/NV sold its subsidiary Econocom Luxembourg SA to Econocom Lease SA/NV in December 2006.(4) Econocom Nederland BV was sold by Econocom Group SA/NV to EFS International BV in December 2006.(5) In August 2006, Econocom Group SA/NV acquired the remaining 35% of Econocom Albis GmbH that it did not already own.(6) Econocom Services BV was sold in June 2006 with retroactive effect from June 1, 2006.(7) Econocom Financial Services International BV was set up in November 2006.

As far as the Company is aware, with the exception of those relating to unavailable reserves (see section 1-4, Consolidatedstatement of changes in equity), no significant restrictions exist on the ability of subsidiaries to transfer funds to EconocomGroup SA/NV in the form of cash dividends or the repayment of loans or advances.


86 •

2-1-4 Segment information Primary reporting format – Business segments

(in € thousands) Financial Services Products and Solutions2006 2005 2006 2005 2

RevenueExternal revenue 279,775 247,792 187,646 183,888 99,Inter-segment revenue 4,721 21,970 21,659 21,352 6,

Total revenue 284,496 269,762 209,305 205,240 105,Results of operationsSegment recurring operating profit/(loss) 9,745 14,090 4,194 2,117 3,Segment operating profit/(loss) 9,929 14,090 4,194 2,117 1,

Interest expense (43) (46) (52) (52) (1Interest income 5

Net financial expense (43) (41) (52) (52)Income tax (3,792) (4,695) 847 (192) (1,4Discontinued operations 94 (483) 388

Profit/(loss) for the year 6,393 8,871 4,989 2,261 (5Other informationTotal current assets 150,037 128,435 43,116 40,359 15,Total current liabilities 105,865 87,357 46,518 41,967 38,Total assets 157,726 141,257 54,007 51,185 32,

Capital expenditure (213) (380) (208) (215) (8Depreciation and amortization (3,851) (11,560) (333) (465) (1,1Other non-cash items 1,769 5,232 282 526

(1) Including A2Z.

Other companies include the parent company Econocom Group SA/NV and the non-trading real estate company SCIAlexandre, as well as the holding companies Econocom France SAS, Econocom SAS, GIE Econocom, Econocom.comSA and Infoconseil SARL.

Segment information relating to Telecom Services was determined using a statistical method based on the proportion ofrevenue contributed by the business.

The results of A2Z, which are included in the Managed Services business, break down as follows:• Revenue: 2006: ?1,657,000; 2005: ?675,000• Recurring operating loss: 2006: (?1,491,000); 2005: (?787,000)• Operating loss: 2006: (?3,626,000); 2005: (?787,000)




Secondary reporting format – Geographical segments

1) By client location

(in € thousands) Revenue 2006 2005

Belgium/Luxembourg 164,519 161,076Netherlands 58,919 69,074France 302,496 264,307Southern Europe (Spain, Italy) 41,324 35,038Other 22,547 21,449 Total 589,805 550,944

2) By asset location

(in € thousands) Current assets Capital expenditure2006 2005 2006 2005

Belgium/Luxembourg 58,518 59,604 (1,611) (952)Netherlands 19,417 23,578 (157) (291)France 153,080 112,476 (2,208) (852)Southern Europe (Spain, Italy) 14,475 20,780 (21) (81)Other 11,895 11,483 (4) (31)Total 257,385 227,921 (4,001) (2,207)

ucts and Solutions Managed Services (1) Telecom Services Other companies Total 006 2005 2006 2005 2006 2005 2006 2005 2006 2005

46 183,888 99,446 99,013 22,437 19,530 501 721 589,805 550,94459 21,352 6,141 7,058 3,373 710 17,179 16,200 53,073 67,29005 205,240 105,587 106,071 25,810 20,240 17,680 16,921 589,805 550,944

94 2,117 3,152 2,056 124 1,521 (750) (793) 16,465 18,99194 2,117 1,006 2,056 124 1,521 (758) (793) 14,495 18,99152) (52) (135) (148) (5) (230) (251)

221 236 1 48 222 28952) (52) 86 88 0 0 1 43 (8) 3847 (192) (1,462) (1,083) 67 861 (78) (59) (4,418) (5,168)

388 (174) 508 94 23989 2,261 (575) 887 191 2,382 (835) (301) 10,163 14,100

16 40,359 15,782 10,830 3,121 4,885 45,329 43,412 257,385 227,92118 41,967 38,505 31,022 3,375 5,947 9,443 11,799 203,706 178,09207 51,185 32,035 28,338 3,976 3,044 57,217 52,970 304,961 276,79408) (215) (891) (314) (1,433) (800) (1,256) (498) (4,001) (2,207)33) (465) (1,105) (839) (261) (62) (642) (749) (6,192) (13,675)82 526 446 (16) 17 58 (21) 0 2,493 5,800


88 •

2-2-0 Intangible assets – 2006

(in € thousands) Franchises, patents,licenses, etc. Other Total

Acquisition costGross value as of December 31, 2005 6,055 506 6,561

Acquisitions 1,256 1,256Disposals (328) (328)Changes in scope of consolidation 0Translation adjustments 0Transfers and other movements (1) (1)

Gross value as of December 31, 2006 6,982 506 7,488Amortization and impairmentAccumulated amortization and impairment losses as of December 31, 2005 (5,178) (506) (5,684)

Amortization expense (685) (685)Impairment losses 0Impairment reversals 0Acquisitions 0Disposals 321 321Changes in scope of consolidation 0Translation adjustments 0Transfers and other movements 1 1

Accumulated amortization and impairment losses as of December 31, 2006 (5,541) (506) (6,047)

Carrying amount as of December 31, 2005 877 0 877Carrying amount as of December 31, 2006 1,441 0 1,441




2-2-0 Intangible assets – 2005

(in € thousands) Franchises, patents,licenses, etc. Other Total

Acquisition costGross value as of December 31, 2004 5,821 5,821

Acquisitions 344 344Disposals (113) (113)Changes in scope of consolidation 2 506 508Translation adjustments 0Transfers and other movements 1 1

Gross value as of December 31, 2005 6,055 506 6,561Amortization and impairmentAccumulated amortization and impairment losses as of December 31, 2004 (4,648) (4,648)

Amortization expense (632) (632)Impairment losses 0Impairment reversals 0Acquisitions 0Disposals 103 103Changes in scope of consolidation (1) (506) (507)Translation adjustments 0Transfers and other movements 0

Accumulated amortization and impairment losses as of December 31, 2005 (5,178) (506) (5,684)

Carrying amount as of December 31, 2004 1,173 0 1,173Carrying amount as of December 31, 2005 877 0 877


90 •

Goodwill was tested for impairment as of December 31,2006 in accordance with the procedures described inparagraph F.6 (Impairment of non-current assets) of Note2-1-1, Summary of significant accounting policies. Theresults of these tests did not reveal any material impair-ment.

The main goodwill recorded during the year related to thefollowing acquisitions:• B-to-B business of Avenir Telecom: ?1,246,000In September 2006, Econocom Products and SolutionsSAS (France) acquired the B-to-B business of AvenirTelecom – a major mobile telephony player with a strongpresence in south-east France. This business manages31,000 lines for major public and private companies andSMEs. This purchase, combined with the Group’s previousacquisition of JCA, has enabled Econocom to bolster itsposition in France’s market of managing corporate mobiletelephony fleets. An analysis was performed as to whether all or part of thegoodwill relating to this acquisition should be allocated tocertain assets, notably intangible assets. However, none ofthe assets concerned fulfilled the recognition criteria in IAS38, Intangible Assets, of being identifiable and separable.

• Buyout of minority interests in Econocom Albis GmbH:?295,000Also in September 2006, Econocom Group SA/NV pur-chased a 35% stake in Econocom Albis GmbH, raising itsinterest in the company to 100%. As a result, Econocomhas strengthened its foothold in Germany as a serviceprovider specialized in financing IT assets.

• Purchase of minority interests in CHanSe: ?335,000In June 2006, Econocom Managed Services SA/NVacquired an additional 22.1% stake in CHanSe SA/NV,which has since been renamed Econocom TelecomServices SA/NV. This acquisition is described in Note 2-5-3, Off-balance sheet commitments.

The method used to calculate the recoverable amount ofCGUs to which material amounts of goodwill have beenallocated is described below.

“Telecom Services and Managed Services CGU”(excluding A2Z)The recoverable amount of the Telecom Services andManaged Services CGU was determined by calculatingthe value in use by reference to the discounted cash flow

(in € thousands) Year of Net value as of Changes in scope of Other Gross value as of Impairment as of Nacquisition Dec. 31, 2004 consolidation in 2005 movements Dec. 31, 2005 Dec. 31, 2005

Products and Solutions 461 0 0 461 0PLI 2000 461 461Telecom Services 7,502 1,005 0 8,507 0Avenir Telecom 2006JCA 2005 757 757For Connected 2005 248 248Signal 2004 7,502 7,502Managed Services 1,918 3,104 0 5,022 0A2Z Holding 2005 3,104 3,104CHanSE 2004 744 744Synopse 2003 413 413SX Consultants NV/SA 2002 656 656CSI 2000 105 105Financial Services 744 0 (73) 671 0Econocom Albis GmbH 2006 0France Location 1996 671 671USA 1995 73 (73) 0Total 10,625 4,109 (73) 14,661 0

2-2-1 Goodwill




method. The calculation was performed using four-yearcash flow projections based on business plans and fore-casts approved by management. The applicable discountrate was set at 8.1%. Cash flow projections beyond thisfour-year timeframe were extrapolated by applying a 3%growth rate to perpetuity, reflecting the expected long-termgrowth in the markets in which the entities of the CGUoperate, as well as their competitive positioning. A sensitivity analysis based on changes in the key param-eters used did not reveal any probable scenario where therecoverable amount of the CGU would fall below its carry-ing amount.

“Products and Solutions” CGUThe recoverable amount of the Products and SolutionsCGU was determined by calculating the value in use byreference to the discounted cash flow method. The cal-culation was performed using four-year cash flow projec-tions based on business plans and forecasts approved bymanagement. The applicable discount rate was set at8.1%. Cash flow projections beyond this four-year time-frame were extrapolated by applying a 1% growth rate toperpetuity, reflecting the expected long-term growth in themarkets in which the entities of the CGU operate, as well

as their competitive positioning. A sensitivity analysis based on changes in the key param-eters used did not reveal any probable scenario where therecoverable amount of the CGU would fall below its car-rying amount.

“A2Z CGU”The recoverable amount of the A2Z CGU was determinedby calculating the value in use by reference to the dis-counted cash flow method. The calculation was performedusing six-year cash flow projections based on businessplans and forecasts approved by management. The appli-cable discount rate was set at 10%. Cash flow projectionsbeyond this six-year timeframe were extrapolated byapplying a 3% growth rate to perpetuity, reflecting theexpected long-term growth in the markets in which theentities of the CGU operate, as well as their competitivepositioning. A sensitivity analysis based on changes in the key param-eters used did not reveal any probable scenario where therecoverable amount of the CGU would fall below its car-rying amount.

Gross value as of Impairment as of Net value as of Changes in scope of Other Gross value Impairment as of Net value as of Dec. 31, 2005 Dec. 31, 2005 Dec. 31, 2005 consolidation in 2006 movements Dec. 31, 2006 Dec. 31, 2006 Dec. 31, 2006

461 0 461 0 0 461 0 461461 461 461 461

8,507 0 8,507 1,301 (36) 9,772 0 9,7720 1,246 1,246 1,246

757 757 3 760 760248 248 248 248

7,502 7,502 55 (39) 7,518 7,5185,022 0 5,022 335 0 5,357 0 5,3573,104 3,104 3,104 3,104

744 744 335 1,079 1,079413 413 413 413656 656 656 656105 105 105 105671 0 671 295 0 966 0 966

0 0 295 295 295671 671 671 671

014,661 0 14,661 1,931 (36) 16,556 0 16,556


92 •

2-2-2 Property, plant and equipment – 2006

(in € thousands) Land and Plant & Furniture Other items Assets held Totalbuildings equipment, and of property, under finance

fixtures vehicles plant and leases (1)

& fittings equipmentAcquisition costGross value as of December 31, 2005 8,532 6,775 4,005 397 35,559 55,268

Acquisitions 28 850 464 906 131,146 133,394Disposals (217) (767) (773) (180) (139,412) (141,349)Changes in scope of consolidationTranslation adjustments 1 1Transfers and other movements (37) (193) 286 56

Gross value as of December 31, 2006 8,306 6,665 3,982 1,123 27,294 47,370Depreciation and impairmentAccumulated depreciation and impairment losses as of December 31, 2005 (2,970) (4,761) (3,122) (57) (32,841) (43,751)

Depreciation expense (445) (845) (415) (1,049) (3,270) (6,024)Depreciation reversals 12 52 6 475 545Impairment lossesImpairment reversalsAcquisitions (21) (21)Disposals 698 635 63 11,350 12,746Changes in scope of consolidationTranslation adjustments (1) (1)Transfers and other movements 16 114 (251) (787) (908)

Accumulated depreciation and impairment losses as of December 31, 2006 (3,387) (4,763) (3,147) (1,043) (25,074) (37,414)Carrying amount as of December 31, 2005 5,562 2,014 883 340 2,718 11,517Carrying amount as of December 31, 2006 4,919 1,902 835 80 2,220 9,956(1) Assets held under finance leases solely comprise computer equipment leased to clients which is classified under furniture and vehicles owned by the Groupfor its own purposes.




2-2-2 Property, plant and equipment – 2005

(in € thousands) Land and Plant & Furniture Other items Assets held Totalbuildings equipment, and of property, under finance

fixtures vehicles plant and leases (1)

& fittings equipmentAcquisition costGross value as of December 31, 2004 8,420 6,269 4,069 396 23,710 42,864

Acquisitions 176 872 501 326 93,758 95,633Disposals (33) (497) (655) (186) (82,673) (84,044)Changes in scope of consolidation 125 162 12 299Translation adjustments 6 31 752 789Transfers and other movements (31) (103) (139) (273)

Gross value as of December 31, 2005 8,532 6,775 4,005 397 35,559 55,268Depreciation and impairmentAccumulated depreciation and impairment losses as of December 31, 2004 (2,554) (4,259) (2,986) (326) (19,454) (29,579)

Depreciation expense (585) (585) (565) (25) (11,469) (13,229)Depreciation reversals 12 1 2 202 217 Impairment lossesImpairment reversalsAcquisitions (12) (83,389) (83,401)Disposals 8 307 475 178 81,886 82,854Changes in scope of consolidation (92) (74) (4) (170)Translation adjustments (5) (22) (596) (623)Transfers and other movements 149 (116) 48 116 (17) 180

Accumulated depreciation and impairment losses as of December 31, 2005 (2,970) (4,761) (3,122) (57) (32,841) (43,751)Carrying amount as of December 31, 2004 5,866 2,010 1,083 70 4,256 13,285Carrying amount as of December 31, 2005 5,562 2,014 883 340 2,718 11,517(1) Assets held under finance leases solely comprise computer equipment leased to clients which is classified under furniture and vehicles owned by the Groupfor its own purposes.


94 •

One of the Group’s French subsidiaries owns an office building at Les Ulis, in the Paris region which is leased to non-Groupcompanies. The carrying amount of this building, which has a floor space of 780 sq.m. and 28 parking spaces, was?552,000 as of December 31, 2006.In December 2000 an independent valuer valued the building at ?900,000. Based on the generally positive trendsobserved in recent years in the real estate market of the Paris region, and taking into account the level of unoccupied officespace and warehouses in the area in question, management believes that this valuation of the office building is still broadlyaccurate.

2-2-3 Investment property

(in € thousands) 2006 2005Gross 1,279 1,279Accumulated depreciation (727) (699)

Depreciation expense for the year (28) (31)Net 552 580

The Econocom Group owns an investment property at the Les Ulis site in France.

Allocation Depreciation rateStructural frame 30% 2%Facades 15% 3.33%General and technical equipment 30% 6.66%Fixtures and fittings 25% 10%

Investment property is depreciated by the straight-line method.

(in € thousands) 2006 2005Rental income recorded in the income statement 116 123




Other movements in the unguaranteed residual value of leased assets correspond to the reclassification to otherreceivables of the portion due within one year.

Other financial assets correspond to guarantees and deposits as well as units held by Econocom Group SA/NV in the MBOCapital venture capital fund. Since October 2002, Econocom SA/NV has invested ?4,674,000 in this fund and has irrev-ocably committed capital of up to ?5,000,000. This represents a 10-year unsecured investment, which offers expectedreturns exceeding the risk-free rate. Funds are not accessible before the end of the term and further disbursements canbe called for until March 2008. As of December 31, 2006, the maximum amount still to be called totaled ?326,000.Econocom Group SA/NV invested ?1,494,000 in this fund in 2006 and received ?814,000 in repayments. Fair valuechanges during the year led to a ?717,000 increase in the fund’s carrying amount, which was recorded in equity as ofDecember 31, 2006.

2-2-4 Financial assets

(in ? thousands) Investments in Investments Unguaranteed Other financial Totalnon-consolidated in companies residual value assets

companies accounted for of leased by the equity assets (1)

methodAs of December 31, 2004 2 250 5,777 8,757 14,786Increases 427 1,598 2,025Repayments (1,378) (2,480) (3,858)Impairment, net (266) (266)Changes in scope of consolidation (290) (6) 24 (272)Translation adjustments 40 13 17 70Other movements 124 124As of December 31, 2005 2 0 4,567 8,040 12,609Increases 184 5,708 5,892Repayments (1,741) (3,729) (5,470)Impairment, net 3 3Changes in scope of consolidationTranslation adjustmentsOther movements (1,434) 728 (706)As of December 31, 2006 2 0 1,576 10,750 12,328Due in 1 to 5 years - - 1,576 - -Due beyond 5 years - - - -(1) After deduction of the repurchase value.


96 •

Other financial assets

(in ? thousands) MBO Capital venture capital fund Guarantees and deposits TotalAs of December 31, 2005 3,180 4,860 8,040Increases 1,494 4,214 5,708Repayments (814) (2,915) (3,729)Impairment, net 3 3Changes in scope of consolidation 0Translation adjustments 0Other movements 717 11 728As of December 31, 2006 4,577 6,173 10,750Due within 1 year - 2,250Due in 1 to 5 years - 3,735Due beyond 5 years - 188

2-2-5 Other non-current assets(in € thousands)

Long-term receivables Dec. 31, 2006 Dec. 31, 2005Long-term portion of receivable owed by Alliance Support Services SA 0 3,844Long-term tax receivables 1,385 1,297Other long-term receivables 1,501 1,154Total 2,886 6,295

In 2006 Alliance Support Services SA repaid in advance the receivable owed to Econocom Managed Services SAS (seeNote 2-5-6, Related-party transactions). The due dates for repayment of this receivable were originally December 15,2007 and 2008.

Long-term tax receivables primarily correspond to a carry back credit relating to Econocom Products and Solutions SAS(France) which is recoverable until 2008.

Other long-term receivables mainly relate to:• Regulated employee housing-related loans (?592,000)• A ?228,000 receivable concerning the sale of Econocom Services BV, which is recoverable on January 1, 2008 and2009. • ?681,000 representing the revised amount of a receivable owed by a French company that was previously placed inreceivership and for which a 10-year recovery plan has been set up.




2-2-6 Assets and liabilities held for sale and discontinued operations

(in € thousands)

Type of assets and liabilities held for sale Assets LiabilitiesAs of December 31, 2006Econocom USA Inc. 14 82Total 14 82As of December 31, 2006Econocom USA Inc. 324 245Total 324 245

Assets and liabilities sold are broken down by category in Note 2-5-1.

Discontinued operations as of December 31, 2006 Income and (expenses) from discontinued operationsEconocom USA Inc. 180Provision for legal dispute relating to the sale of Econocom Suisse (80)Fees on the sale of Econocom Suisse (6)Net income from discontinued operations 94Profit from discontinued operations before tax 94Income tax on discontinued operations 0Net profit from discontinued operations 94

Discontinued operations as of December 31, 2005 Income and (expenses) from discontinued operationsGain on disposal of SCI Cap Horn 388Gain on disposal of Econocom Suisse SA 581Proceeds from discontinued operations 969Lease contract portfolio of Econocom USA Inc. (498)Loss on disposal of Ace Computer (57)Disposal of St Thibault building (175)Expenses related to discontinued operations (730)Profit from discontinued operations before tax 239Income tax on discontinued operations 0Net profit from discontinued operations 239


98 •

2-2-7 Inventories

(in € thousands) 2006 2005Gross Provisions Net Gross Provisions Net

Equipment in the process of refinancing 1,155 1,155 5,033 5,033Other inventories 4,304 (283) 4,021 4,246 (615) 3,631

IT and telephony equipment 3,585 (225) 3,360 3,024 (101) 2,923

Spare parts 719 (58) 661 1,222 (514) 708

Total 5,459 (283) 5,176 9,279 (615) 8,664

MovementsAs of Dec. 31, 2005 Movements Other movements As of Dec. 31, 2006

in inventoriesEquipment in the process of refinancing 5,033 (3,875) (3) 1,155Other inventories 4,246 (40) 98 4,304

IT and telephony equipment 3,024 463 98 3,585

Spare parts 1,222 (503) 719

Total 9,279 (3,915) 95 5,459

Provisions for impairment in value of inventories As of Dec. 31, 2005 Additions Reversals Other As of Dec. 31, 2006

movementsEquipment in the process of refinancing 0 0Other inventories (615) (104) 459 (23) (283)

IT and telephony equipment (101) (104) 3 (23) (225)

Spare parts (514) 456 (58)

Total (615) (104) 459 (23) (283)

Other movements concern the reclassification of certain assets from equipment to inventories in the accounts of EconocomGroup SA/NV.




2-2-8 Trade receivables

(in € thousands) Dec. 31, 2006 Dec. 31, 2005Gross 159,142 136,501Refinancing institutions 59,427 52,175Other 99,715 84,326Provisions for doubtful receivables (3,510) (5,491)Net 155,632 131,010

Refinancing institutions correspond to financial institutions which are bank subsidiaries. Payment is received from theseinstitutions within two weeks of the sale of the equipment and contracts concerned. The significant amount recordedunder receivables due from refinancing institutions is attributable to high levels of business in December for the FinancialServices business.

As of Dec. 31, 2005 Additions Reversals Other As of Dec. 31, 2006movements

Provisions for doubtful receivables 5,491 1,452 (3,275) (158) 3,510

Other movements mainly concern changes in the scope of consolidation.

The self-financed contracts held by Promodata SNC which are being progressively transferred to Econocom Location SASare considered to be finance leases under IFRS. As a result, the discounted value of the lease payments under thesecontracts is recognized as revenue and the carrying amount of the related equipment is recorded as an expense.

Statistical provisions have been recorded in relation to the receivables owed by clients with average financial capacity inorder to take into account the risk of non-recovery of future lease payments.


100 •

2-2-9 Other receivables and other current assets

(in € thousands) Dec. 31, 2006 Dec. 31, 2005Recoverable VAT 1,966 2,675Due from suppliers 1,879 3,786Short-term portion of the residual value of leased assets 1,248 1,434Advances to agents 1,114 1,418Factoring receivables 911 7,889Other receivables 3,213 4,165Other receivables 10,331 21,367

The short-term portion of the residual value of leased assets was classified under non-current financial assets at December31, 2005.

Dec. 31, 2006 Dec. 31, 2005Prepaid expenses 3,834 3,680Miscellaneous current assets 11 42Other current assets 3,845 3,722

Other receivables represent advances to employees as well as miscellaneous receivables owed by external parties (includingtax receivables and amounts due from suppliers) and by related parties.

Prepaid expenses primarily relate to maintenance contracts within the Managed Services business.




2-2-10 Cash and cash equivalents

(in € thousands) Dec. 31, 2006 Dec. 31, 2005Cash 48,110 41,364Cash on hand 8 10Demand accounts 48,102 41,354Cash equivalents 28,506 18,700Term accounts 20,038 4,634Marketable securities 8,468 14,066Cash and cash equivalents 76,616 60,064

Cash equivalents consist of investments with maturities of less than three months that are readily convertible into cashand are not exposed to any material risk of impairment.

None of the Group’s cash or cash equivalents are subject to any restrictions.

The specific accounting treatment of bridges on ROF (Roll Out Facility) and TRO (Technology Refresh Option) contractsmentioned in paragraph F.3.1 of Note 2-1-1 had a ?13.3 million impact on net cash and cash equivalents as of December31, 2006 compared with ?10.3 million the previous year.

Any negative difference between the future value of equipment and its financial residual value (i.e. the repurchase price)is recognized under financial liabilities on a contract-by-contract basis. This difference had a ?15.7 million impact on netcash and cash equivalents as of December 31, 2006 versus ?19 million one year earlier.

As of December 31, 2006, ?39.2 million in factored receivables were removed from the balance sheet in accordance withthe accounting method described in paragraph O.2 of Note 2-1-1 (December 31, 2005: ?31.3 million).


102 •

2-3-1-3 Stock option plans

Since 1998, certain employees, managers and officers have been awarded stock options based on agreed exercise prices.The characteristics of the stock option plans in force are as follows:

General disclosures

Plan Number of options outstanding Expiry date Exercise price (in €)1999 128,000 November 2007* 8.752001 24,000 January 2007 4.732003 60,000 January 2008 4.062004 100,000 December 2008 4.72

1,500 Janvier 2009 5.31400,000 November 2009 Between 5.85 and 5.89

2005 50,000 January 2010 5.9880,000 May 2010 6.52

2006 255,000 November 2011 5.70Total 1,098,500(*) Under the Belgian law of December 24, 2002, subject to the beneficiaries’ consent, the exercise period of stock options may be extended for a maximum ofthree years, without any additional tax charge. Accordingly, the Stock Option Committee decided to extend the exercise period for options granted in 1999 bythree years, thus amending the expiry date from November 2004 to November 2007.

2-3-1 Equity

2-3-1-1 Share capital and additionalpaid-in capital

As of December 31, 2006, the Company’s capital wasmade up of 29,000,000 fully paid-up ordinary shares, rep-resenting ?16,181,000. The number of outstandingshares was unchanged from December 31, 2005. The shares have no stated par value and all carry the samevoting and dividend rights. There are no different classesof shares. As of December 31, 2006 the number of bearer andregistered shares totaled 15,461,740 and 13,538,260respectively and additional paid-in capital amountedto ?55,038,000. At the same date the Company’sauthorized capital stood at ?15,895,000, with therelated authorization valid until 2010.

Exchange differences by currency 2006 2005US dollar (180) 103Pound sterling 141 110Total (39) 213

2-3-1-2 Currency translation reserves

Currency translation reserves represent the cumulativetranslation adjustments arising on consolidation of sub-sidiaries that use a functional currency other than the euro.

The ?252,000 reduction in these reserves during theyear primarily corresponds to the partial transfer to the2006 income statement of the cumulative translationadjustments relating to the Group’s US subsidiary, following a down payment made in relation to thiscompany’s liquidation.

Exchange differences recognized in equity break down asfollows:



General disclosures Specific disclosures in accordance with IFRS 2

Plan Number of options outstanding Fair value (1) Volatility LifeDividends (in €) RFIR (2)

1999 128,000 Not recognized2001 24,000 Not recognized2003 60,000 1.97 65% 5 years 0.10 4.0%2004 100,000 2.07 56% 5 years 0.10 3.5%

1,500 2.36 56% 5 years 0.10 3.5%400,000 2.10 43% 5 years 0.10 3.5%

2005 50,000 1.84 40% 5 years 0.15 2.8%80,000 1.98 38% 5 years 0.15 2.8%

2006 255,000 1.95 23% 5 years 0.20 4.0%Total 1,098,500(1) Fair value of options in ?.(2) RFIR: risk-free interest rate.

The weighted average price of the options granted is equal to their exercise price.The expected volatility is calculated by the stockbroker that manages the Company’s shares on a daily basis and over anappropriate period based on the life of the options and historical movements in the share price.

A detailed description of these stock option plans is provided in paragraph 11 of the Corporate Governance section.

Movements in the number of options outstanding during 2006 and 2005 can be analyzed as follows:

(in € thousands) 2006 2005Options outstanding at January 1 1,435,912 2,074,992Options granted at the end of y-1 but accounted for in y 122,172Options granted during the year 255,000 150,000Options exercised during the year (533,340) (856,420)Options expired during the year and forfeited (59,072) (54,832)Options outstanding as of December 31 1,098,500 1,435,912

In accordance with IFRS 2 – Share-based Payment, stock options granted after November 7, 2002 have been measuredand recognized in the Group’s financial statements.Stock option plans had a ?651,000 impact on consolidated equity as of December 31, 2006 and the related expensefor the year came to ?241,000.



104 •

2-3-1-4 Treasury shares

Movements in treasury shares were as follows:

Number of shares Value(in € thousands)

December 31, 2005 40,728 258Acquisitions 1,191,646 7,648Disposals (433,340) (2,891)December 31, 2006 799,034 5,015

.

These treasury shares are held by Econocom Group SA/NV. The overall number of treasury shares held may not exceed10% of the total number of issued shares making up the Company’s capital (representing 2,900,000 shares as of December31, 2006).

The acquisition cost of treasury shares purchased during the year was deducted from equity and any disposal gains ontreasury shares sold were also recognized in equity.

2-3-1-5 Dividends

Payable in 2007 Paid in 2006 Paid in 2005Total dividend (in € thousands) 5,800 4,640 4,500Dividend per share 0.20 0.16 0.15

At the Annual General Meeting of May 15, 2007, the Board of Directors will recommend a gross dividend per share of?0.20 for 2006, to be paid in early June 2007.The financial statements in this registration document are presented before the appropriation of profit and therefore donot include the above-mentioned dividend, which is subject to shareholder approval at the Annual General Meeting ofMay 15, 2007.

2-3-1-6 Minority interests

(in € thousands)

As of December 31, 2005 3642006 profit attributable to minority interests (7)Sale of Econocom Services BV (137)Purchases of minority interests (107)As of December 31, 2006 113

Purchases of minority interests relate to stakes acquired by the Econocom Group in Econocom Telecom Services SA/NVand Econocom Albis GmbH.



Provisions for other contingencies relate to a legal disputeconcerning Promodata SNC. On the acquisition of thiscompany in October 2002, four current and former man-agers were beneficiaries under a share purchase planrelating to Promodata SNC’s American parent company,Comdisco Inc. using a loan from a US bank. ComdiscoInc. was subsequently declared bankrupt and the shareslost all value, following which one of the managers filed aclaim against his employer Promodata SNC. The amountrecognized in the related provision corresponds to the bestestimate of the expenditure required to settle the Group’sobligation with respect to this dispute.Long-term provisions are not discounted.

A provision is recognized when the Group has a present(legal or constructive) obligation as a result of a past event,it is probable that that an outflow of resources embodyingeconomic benefits will be required to settle the obligation,and a reliable estimate can be made of the amount of theobligation. Provisions are reviewed at each balance sheetdate and adjusted where appropriate to reflect the bestestimate of the obligation at that date.

Long-term provisionsThe restructuring provisions recorded in the balance sheetas of December 31, 2006 relate to various restructuringoperations carried out in 2003 and 2004 concerning theFrench subsidiaries of Econocom Managed Services SASand Econocom Products and Solutions SAS.


2-3-2 Long- and short-term provisions

(in € thousands) Restructuring Business Employee- Tax and Deferred Other Totalcontingencies related legal commission contingencies

contingencies contingenciesAs of December 31, 2004 1,241 504 1,203 965 3,849 5,522 13,284

Additions 2 4 334 4 299 73 716Reversals (542) (450) (893) (312) (388) (2,585)Utilizations (126) (17) (43) (3,928) (4,114)Changes in scope of consolidation 70 149 140 (323) 36Translation adjustments 4 5 9Other movements (1,397) 246 (1,151)

As of December 31, 2005 645 41 750 1,109 2,443 1,207 6,195 Additions 299 362 306 56 1,023Reversals (47) (165) (242) (1,021) (1,475)Utilizations (262) (16) (65) (343)Changes in scope of consolidationTranslation adjustmentsOther movements (117) (60) (177)

As of December 31, 2006 336 41 751 1,169 1,663 1,263 5,223O/w short-term provisions 41 751 1,145 1,663 689 4,289O/w long-term provisions 336 24 574 934

Dec. 31, 2006 Dec. 31, 2005Long-term provisions 934 1,245Short-term provisions 4,289 4,950Total provisions 5,223 6,195


106 •

• Once the employee has attained five years of service,the indemnity is equal to one month’s salary plus 1/5th ofa month per additional year of service.• There is no ceiling on the amount of these retirementindemnities.

AssumptionsThe following rates were used in 2006 and 2005 tomeasure the Group’s pension and other post-employ-ment benefit obligations:

2006 2005Discount rate 4.3% 5.5%Average rate of salary increases 2% 3%

The mortality and staff turnover assumptions used forFrench subsidiaries are based on the assumptions set outin the “Syntec” collective bargaining agreement which isapplicable to service companies in France.

Movements in the Group’s obligations for pensionsand other post-employment benefits for employees in France

(in € thousands)

As of December 31, 2005 584Expense for the year 523As of December 31, 2006 1,107

Short-term provisionsProvisions for employee-related contingencies primarilyconcern claims brought before the French labor courts. Provisions for deferred commissions are calculated con-tract-by-contract based on the unguaranteed residualvalue of leased assets, less any residual commercial valueof the contracts concerned.Provisions for other contingencies as of December 31,2006 mainly related to:• rental payments for unoccupied office premises in theUK;• a put option granted to a senior manager of one of theGroup’s French companies (see Note 2-5-3).

Other movements in provisions correspond to the follow-ing reclassifications:• a provision for a tax dispute concerning EconocomSuisse reclassified to discontinued operations; • provisions relating to Data Networks France SARL,reclassified to other operating income.

2-3-3 Pension and other post-employment benefitobligations

In certain countries, Group employees receive supplemen-tary pensions either through defined contribution plans ordefined benefit plans.The Group’s obligation under defined contribution plansis limited to the payment of contributions, which areexpensed as incurred (see Note 2-4-2). Only French sub-sidiaries are covered by defined benefit plans.The Group’s obligations for statutory indemnities payableon retirement to French employees are calculated in accor-dance with the “Syntec” collective bargaining agreementas follows:• The legal retirement age is set at 65, with the option ofleaving as from 60 years of age.• The indemnity payable is calculated based on the lengthof service that the employee would have at 65 years ofage, whatever his or her actual age on retirement between60 and 65.



2-3-4 Current and non-current liabilities bearing interest


(in € thousands) Dec. 31, 2006 Dec. 31, 2005Finance lease liabilities 7,384 6,931

Finance lease liabilities (where Econocom is the lessee) 4,545 4,255

Finance lease liabilities (where Econocom is the lessor) 2,839 2,676

Bank borrowings 5 16Other borrowings 80 82Non-current liabilities bearing interest 7,469 7,029Bank borrowings 11 1,123Finance lease liabilities 1,257 790

Finance lease liabilities (where Econocom is the lessee) 417 129

Finance lease liabilities (where Econocom is the lessor) 302 483

Purchase commitments under finance leases 538 178

Bank overdrafts 2,468 4,081Other borrowings 12,037 4,816

Factoring payables (1) 10,630 4,288

Other 1,407 528

Current liabilities bearing interest 15,773 10,8101) The year-or-year increase in factoring payables is primarily attributable to the restatement of a French factoring agreement which had a ?7.1 million impact in 2006.

Non-current liabilities bearing interest, analyzed by maturity Total as of Dec. 31, 2006 1 to 5 years > 5 yearsFinance lease liabilities 7,384 4,331 3,053

Finance lease liabilities (where Econocom is the lessee) 4,545 1,492 3,053


Bank borrowings 5 5Other 80 80Total 7,469 4,416 3,053

Non-current liabilities bearing interest, analyzed by maturity Total as of Dec. 31, 2005 1 to 5 years > 5 yearsFinance lease liabilities 6,931 3,568 3,363

Finance lease liabilities (where Econocom is the lessee) 4,255 892 3,363


Finance lease liabilities (where Econocom is the lessor) 16 16

Other 82 82Total 7,029 3,666 3,363


108 •

Average effective interest rate 2006 2005Bank borrowings 3.00% 3.00%Finance lease liabilities 2.39% 3.03%Bank overdrafts 3.75% 3.75%Factoring payables 3.53% 2.75%

All non-current liabilities bearing interest are denominated in euros.

Operating lease liabilities

Analysis by maturity

(in € thousands) < 1 year 1 to 5 years > 5 years Total as of Dec. 31, 2006

Minimum future lease paymentsBuildings 2,401 10,357 2,082 14,840Vehicles 3,489 4,223 7,712Total 5,890 14,580 2,082 22,552

Operating lease payments during the year 2006Buildings 2,406Vehicles 3,972Total 6,378



Disclosures concerning the valuation of the Phantom Shares

Grant date April 30, 2005Exercise date March 31, 2008Valuation date December 31, 2006Price of underlying ?6.66Activation threshold ?12.00Risk-free interest rate 3.99%Volatility 23%Estimated dividend ?0.2Average turnover 9%Fair value (1)

?23.43 Valuation (2) As of December 31, 2006: ?45,000(1) Estimate for 350 phantom shares, i.e. the amount in ? per beneficiary.(2) Including social security charges for all beneficiaries.

The “Other” item primarily corresponds to a ?4,445,000loan granted to Econocom Expert International HoldingBV by Econocom International NV. EconocomInternational NV is a related party (see Note 2-5-6).

This item also includes commitments to purchaseminority interests (see Note 2-5-3, Off-balance sheetcommitments).

Deferred income relates to maintenance contracts, up-front bi l l ing and the Financial Services business(?15,634,000).

Accrued personnel costs include ?45,000 relating to the2006 International Phantom Share Grant Plan. This plan,which was set up in July 2005, provides each Groupemployee with an entitlement to receive a bonus as ofMarch 31, 2008, based on the Econocom Group shareperformance. If the average price of the Econocom Groupshare on the Euronext Brussels market reaches ?12 during March 2008, and if the beneficiary employee is stilla member of the Group, he or she will receive a bonuscalculated as follows:(average price of the Econocom Group share duringMarch 2008 – reference value of the Phantom shares) x 350.


2-3-5 Other payables and other current liabilities

(in € thousands) Dec. 31, 2006 Dec. 31, 2005Accrued taxes and personnel costs 27,128 24,597Dividends payable 96 100Customer prepayments 2,366 1,943Other payables 29,590 26,640Other 7,477 8,933Deferred income 20,168 16,645Miscellaneous current liabilities 4,568 3,965Other current liabilities 32,213 29,543


110 •

The estimated impact of this change in accountingmethod on the consolidated financial statements is asfollows: (i) a ?10.8 million increase in revenue, (ii) a ?3.1million increase in gross margin, and (iii) a ?2.2 millionincrease in profit before tax. Paragraph 19 of IAS 8states that prior-year data should be restated to reflectsuch a change in accounting method. The Group hasnot restated the related figures for 2005, however, asthe impact on that year’s revenue and gross margin wasnot considered to be material (increases of ?1.7 millionand ?0.2 million respectively).

Revenue from sales of goods is recognized when it isprobable that the economic benefits associated with thetransaction will flow to the Econocom Group. When anuncertainty arises about the collectibility of an amountincluded in revenue from the sale of goods, the uncol-lectible amount is estimated and recognized as anexpense.

Revenue from sales of services is recognized in theaccounting period in which the services are rendered byreference to their stage of completion.

Claims, penalties or possible losses, which are monitoredon a statistical basis, were not material as of December31, 2006.

In 2006 the Group reviewed the method used for recog-nizing lease-related revenue (see paragraph F-3-1 of Note2-1-1). Management considers that the performance ofthe roll-out components of a lease is closely related to theperformance of the contract as a whole, and that it istherefore more appropriate to account for these compo-nents as part of the overall finance lease agreement. As aresult, all payments received or receivable from the con-tract at the delivery date of the leased equipment are nowrecognized in revenue.

2-4-1 Revenue from continuing operations

(in € thousands) 2006 2005Sales of goods 194,426 191,068Finance leases 279,775 247,792Sales of services 115,103 111,363Other revenue from continuing operations 501 721Total 589,805 550,944




2-4-2 Personnel costs

(in € thousands) 2006 2005Wages and salaries (56,209) (56,427)Payroll costs (18,255) (18,403)Contributions to defined contribution supplementary pension plans (1,188) (1,373)Provision expense for pension and other post-employment benefit obligations (704) (133)Employee profit-sharing (432) (401)Other (3,265) (2,756)Total (80,053) (79,493)

Expenses relating to defined benefit pension plans only concern the Group’s French subsidiaries. Further details aboutthese plans are provided in Note 2-3-3.

The impact of share-based payment plans can be analyzed as follows:

2006 2005Stocks Options (241) (350)Phantom Shares (19) (26)Total (260) (376)

Details relating to the Group’s stock option and Phantom Share plans are provided in Notes 2-3-1 and 2-3-5 respectively.

2-4-3 External expenses

(in € thousands) 2006 2005External services (rent, maintenance, insurance, etc.) (5,060) (5,912)Agents’ commissions (19,335) (15,819)Fees paid to intermediaries and other professionals (11,657) (11,785)Other services and sundry goods (sub-contracting, public relations, transport, etc.) (16,805) (16,770)Total (52,857) (50,286)


112 •

2-4-4 Depreciation, amortization and provisions

(in € thousands) 2006 2005Intangible assets – Franchises, patents, licenses etc. (685) (632)Property, plant and equipment – Finance leases (2,795) (11,267)Other items of property, plant and equipment (2,684) (1,745)Investment property (28) (31)Provisions against inventories 355 (83)Short-term provisions 619 2,057Net additions to depreciation, amortization and provisions (5,218) (11,701)

Additions to and reversals of restructuring provisions are included in operating profit.

2-4-5 Impairment losses on current assets, net

(in € thousands) 2006 2005Impairment losses on doubtful receivables (1,773) (306)Reversal of impairment losses on doubtful receivables 3,292 4,132Total 1,519 3,826

2-4-6 Other operating income and expenses

(in € thousands) 2006 2005Gains on sales of property, plant and equipment and intangible assets – recurring operating activities 74 106Other recurring operating income 1,045 1,643Losses on sales of property, plant and equipment and intangible assets – recurring operating activities (19) (136)Losses on sales of trade receivables (13) (208)Other recurring operating expenses (399) (557)Total 688 848




2-4-7 Financial income and expenses – operating activities

(in € thousands) 2006 2005Financial income related to the leasing business 1,589 1,232Income from current assets 655 413Financial income relating to miscellaneous operating activities 284 368Exchange gains 88 48Total financial income from operating activities 2,616 2,061Financial expenses related to the leasing business (916) (575)Financial expenses related to bank overdrafts (437) (320)Financial expenses related to factoring (1,276) (996)Financial expenses related to miscellaneous operating activities (423) (320)Exchange losses (57) (86)Total financial expenses from operating activities (3,109) (2,297)Net financial expense – operating activities (493) (236)

Net exchange gains/(losses) recorded in the income statement 2006 2005CHF 7USD 21 (23)GBP 10 (22)Total 31 (38)

2-4-8 Other non-recurring operating income and expensesThe increase in other non-recurring operating expenses during 2006 stems mainly from the ?2,632,000 in costs incurredin connection with the reorganization of the A2Z business during the summer. The aim of these reorganization measureswas to refocus A2Z’s operations on Belgium.


114 •

2-4-9 Other financial income and expense

(in € thousands) 2006 2005Gains on disposal of financial assets 1 48Reversal of impairment of financial assets 3Other financial income 222 240Financial income 226 288Expenses on long-term liabilities (225) (250)Other financial expense (9)Financial expense (234) (250)Other financial income/(expense), net (8) 38

Other financial income corresponds to interest on loans and advances to related parties (see related party disclosures inNote 2-5-6).

The Econocom Group did not have any hedging instruments in place as of December 31, 2006.

2-4-10 Income taxes

Income tax expense

Analysis of the Group’s income tax expense:

(in € thousands) 2006 2005Current taxes (4,917) (6,821)Deferred taxes 500 1,653Income tax expense – continuing operations (4,417) (5,168)Income taxes related to discontinued operations – – Total income tax expense (4,417) (5,168)

2006 2005Profit before tax including profit from discontinued operations 14,571 19,268Income tax expense (4,417) (5,168)Effective tax rate 30.31% 26.82%



The following table provides a reconciliation between profit before tax and income tax expense.

2006 2005Profit for the year including minority interests 10,170 14,177Minority interests (7) (77)Income tax expense 4,417 5,168Profit before tax 14,580 19,268Theoretical tax expense calculated at the Belgian standard tax rate (2006: 33.99%; 2005: 33.99%) (4,956) (6,549)Tax proof:Permanent differences (572) (767)Change in unrecognized deferred tax assets (115) 825Transactions taxed at a reduced rateDifferences in tax rates (between the standard Belgian tax rate and the tax rates of foreign subsidiaries) 149 230Adjustments to deferred taxes recognized in prior periods 254 64Deferred tax assets related to tax loss carryforwards 983 952Tax credits and other taxes (160) 77Actual income tax expense (4,417) (5,168)

Permanent differences mainly relate to the following items:

2006 2005Goodwill and excess depreciation and amortization 140 (54)Other non-taxable or non-deductible income and expenses (712) (713)Total (572) (767)

Deferred taxes

Movements in deferred tax assets:

2006 2005As of January 1 2,334 2,339Increase/(decrease) 1,524 (5)As of December 31 3,858 2,334

Movements in deferred tax liabilities:

2006 2005As of January 1 (1,718) (3,375)(Increase)/decrease (1,024) 1,657As of December 31 (2,742) (1,718)



116 •

Sources of deferred tax assets and liabilities:

Assets Liabilities NetDec. 31, 2006 Dec. 31, 2005 Dec. 31, 2006 Dec. 31, 2005 Dec. 31, 2006 Dec. 31, 2005

Intangible assets 73 70 73 70Property, plant and equipment 495 410 2,512 3,007 410Inventories 70 70 0Financial instruments 3 (88) (126) (88) (123)Other assets 235 230 (6,438) (74) (6,203) 156Provisions 322 26 (444) (43) (122) (17)Other liabilities 28 26 1,679 (1,055) 1,707 (1,029)Tax loss carryforwards 2,705 1,569 (33) (420) 2,672 1,149Deferred tax assets (liabilities), net 3,858 2,334 (2,742) (1,718) 1,116 616Deferred tax assets recognized in the balance sheet 3,858 2,334 3,858 2,334Deferred tax liabilities recognized in the balance sheet (2,742) (1,718) (2,742) (1,718)Net balance 1,116 616

Recoverable within 12 months 1,153 1,389 (2,742) (1,718) (1,589) (329)Recoverable beyond 12 months 2,705 945 2,705 945

The expiry dates of the Group’s tax loss carryforwards were as follows as of December 31, 2006 and 2005:

Dec. 31, 2006 Dec. 31, 20052006 32620072008 267 2672009Beyond 519 155Evergreen tax loss carryforwards 65,172 61,609Total 65,958 62,357



The Group’s unrecognized deferred tax assets at December 31, 2006 related to the following items:

Gross value Total deferred Recognized deferred Unrecognized deferred tax assets tax assets tax assets

Tax loss carry forwards 65,958 21,503 2,705 18,798Other tax credits (long-term capital losses) 4,744 712 712Other 640 192 192Total 71,342 22,407 2,705 19,702


A – Current taxes

Current tax expense is equal to the amounts of incometaxes due to tax authorities for the year, calculated on thebasis of the laws and tax rates applicable in the differentcountries in which the Group operates.

Since its formation, Econocom Nederland BV(Netherlands) has opted for the tax consolidation systemprovided for by article 15 of the 1969 Dutch corporationtax law. Its Dutch subsidiary, Econocom Products ServicesBV, is covered by this specific tax regime.

The standard tax rate in Belgium for 2006 and 2005 was33.99%. The rate in the Netherlands fell to 29.6% in 2006from 31.5% in 2005.

B – Deferred taxes

Deferred tax expense is calculated in accordance with theaccounting policy described in Note L in the summary ofsignificant accounting policies.

In accordance with the exemption provided for in para-graph 39 of IAS 12 – Income Taxes, the Group has notrecognized any deferred taxes on temporary differencesarising from undistributed profits of its subsidiaries.


118 •

2-4-11 Earnings per share

Basic earnings per share

2006 2005Operating profit (in ? thousands) 14,495 18,991Profit for the year (in ? thousands) 10,170 14,100Average number of shares outstanding 28,607,523 29,165,716Operating profit per share (in €) 0.507 0.651Basic earnings per share (in €) 0.355 0.483

Diluted earnings per share

2006 2005Diluted operating profit (in ? thousands) 14,495 18,991Diluted profit for the year (in ? thousands) 10,170 14,100Average number of shares outstanding 28,607,523 29,165,716Impact of stock options 160,342 356,432Diluted average number of shares outstanding 28,767,865 29,522,148Diluted operating profit per share (in €) 0.504 0.643Diluted earnings per share (in €) 0.354 0.478

Earnings per share is calculated based on the weightedaverage number of ordinary shares outstanding during theyear. This average takes into account movements in thenumber of ordinary shares during the year, adjusted forchanges in the number of treasury shares held. Changesin treasury shares are analyzed in Note 2-3-1.

The diluted average number of shares outstanding repre-sents the weighted average number of ordinary sharesoutstanding during the year, adjusted for changes in thenumber of treasury shares held and the impact of the con-version of all dilutive potential ordinary shares. The dilutiveimpact corresponds to the exercise of stock options andis calculated using the treasury stock method.

In view of the nature of the Company’s stock option plans(see Note 2-3-1) only the 1999 plan, which expires inNovember 2007, has an anti-dilutive effect.

No transactions have occurred since the balance sheetdate relating to the Company’s ordinary shares or dilutivepotential ordinary shares that could have a material impacton the Group’s published earnings figures.



2-5-1 Notes to the consolidated cash flow statement

The Group’s cash and cash equivalents increased by ?16,552,000 in 2006.The components of cash and cash equivalents are described in Note 2-2-10.

Details concerning financial income and expense items are provided in Note 2-4-9.

Income tax expense breaks down as follows:

(in ? thousands)

Income tax expense 2006 2005Current tax expense (4,918) (6,821)Deferred tax benefit 500 1,653Total (4,418) (5,168)

Movements in current and deferred taxes are set out in Note 2-4-10.

Changes in scope of consolidation in 2006 had the following impacts on the consolidated cash flow statement:

(in ? thousands)

Cash flows from operating activities (402)Gain on disposal of Econocom Services BV (402)Cash flows from investing activities (993) Disposal of Econocom Services BV 892Acquisition of a 35% interest in Econocom Albis GmbH (342)Acquisition of minority interests in Econocom Telecom Services SA/NV (384)Acquisition of minority interests in Econocom Products and Solutions SAS (France) (57)Acquisition of Avenir Telecom (goodwill) (1,246)Additional purchase price relating to JCA goodwill (3)Discontinued operations of Econocom USA Inc. 147

Changes in the Econocom Group’s scope of consolidation in 2006 had a ?612,000 impact on consolidated assets andliabilities, with no impact on the cash flow statement.

(in ? thousands)

Impact of changes in scope of consolidation in 2006 612Short-term receivables and other current assets 1,020Trade payables (90)Other current liabilities (303)Property, plant and equipment (15)



120 •

Breakdown of acquisitions and disposals of subsidiaries

Disposal of Econocom Services BV

Sale price ?1,100,000Portion of price paid in cash or cash equivalents 100%Cash and cash equivalents of the subsidiary ?208,000Current assets (included in change in working capital) ?1,020,000Current liabilities ?393,000Investment-related assets ?15,000Financing-related liabilities -

Acquisition of a 35% interest in Econocom Albis GmbH (already fully consolidated in prior periods)

Acquisition price ?403,000Portion of price paid in cash or cash equivalents 100%Redemption of capital of minority interests ?61,000Cash and cash equivalents of the subsidiary -Current assets (included in change in working capital ) -Current liabilities -Investment-related assets -Financing-related liabilities -



1.3. Interest rate risk

The Group’s income and operating cash flows are sub-stantially independent of changes in interest rates. Sales ofleases to refinancing institutions are systematically basedon fixed rates. The income arising on these contracts istherefore set at the outset and only varies if the contract isamended.

The Group has a low level of long- and short-term debt.Variable-rate borrowings primarily relate to factoring.

1.4. Liquidity risk

The Group is able to maintain flexibility in terms of liquidi-ty levels by using factoring solutions, systematically sellingleases to bank subsidiaries and, where possible, makingcash payments in return for discounts.

2. Specific risks related to operations

2.1. Risks relating to Managed Services contracts

The main risk in relation to Managed Services contractsis the notice period for contract terminations. This periodis traditionally long enough to enable the Group to makethe appropriate staffing changes, particularly for signifi-cant contracts. However, in certain circumstances thenotice period may be limited to one month, in which casethe Group has to anticipate the possibility of the contractbeing terminated in order to take the necessary measures,particularly in relation to redeploying employees. In addi-tion, a portion of Econocom’s revenues are generated bysub-contractors, with the aim of increasing flexibility.

2-5-2 Risk factors

1. Financial riskThe Group’s activities are subject to certain financial risks:market risk (including currency risk), credit risk and inter-est rate risk.

The Group’s overall risk management program focuseson reducing exposure to credit risk and interest rate risk bytransferring finance lease receivables to refinancing insti-tutions and by using factoring solutions.

Financial risk management is carried out directly by Groupmanagement.

1.1. Market risk

1.1.1. Foreign exchange riskThe Group operates internationally but over 95% of itstransactions take place in the euro zone. Only the opera-tions of the Group’s UK subsidiary are exposed to foreignexchange risk, relating to the pound sterling. This exposureis limited by purchases and sales being denominated inthe same currency. The Econocom Group does not hedgeits exposure to foreign exchange risk as it is not deemedto be material.

1.1.2. Price riskEconocom Group SA/NV holds units in the MBO Capitalventure capital fund. These assets are held for sale andthe funds invested are not accessible. They are recordedat fair value in the financial statements.

1.2. Credit risk

The Group has no significant exposure to credit risk. It haspolicies in place to ensure that sales of goods and servic-es are made to clients with an appropriate credit history.The Group’s exposure is also limited as it does not haveany concentration of credit risk and uses factoring solu-tions for the Products and Solutions and ManagedServices businesses, as well as non-recourse refinancingwith bank subsidiaries in the Financial Services business.



122 •

4. Employee-related risks

To the best of the Group’s knowledge, it is not exposedto any employee-related risks other than those arisingin the normal course of business for companies of acomparable size based in Europe. The majority of theworkforce is employed in the Group’s French andBelgian subsidiaries.

5. Environmental risks

The Group does not destroy the machines purchased fromrefinancing institutions at the term of the related contracts.The machines are sold to brokers who are responsible formanaging the applicable end-of-life procedures and haveprovided the Group with guarantees that they respect therelated regulations.

6. Insurance

The Group is covered against liability claims and propertydamage via insurance policies taken out with first-rateinsurers. It has elected not to take out business interruptioninsurance.

2.2. Dependency risk

The Econocom Group continually strives to broaden itsclient portfolio as part of its development strategy to gainmarket share. None of the Group’s clients represents over5% of total consolidated revenue, and no supplier repre-sents more than 25% of its total purchases. The Group’soperations are not dependent on any specific patent oron any licenses for brands which it does not own.

2.3. Competitive risk

The IT services market is extremely competitive, and hasbeen for a long time. There are a limited number of com-petitors at an international level for all of the Group’s busi-nesses. However, in each country where it has operationsand in each of its businesses, the Group faces strongcompetition from international, national or local players.

3. Legal risks

The Group operates in various Western European coun-tries and is therefore subject to numerous different lawsas well as customs, tax and labor regulations. In order tolimit its exposure to legal risks, the Group ensures that ithas subsidiaries in each country with managers who arefully aware of the applicable local laws and regulations.

Thanks to its headquarters in Brussels, Econocom is closeto the source of new European legislation and regulations.

The Group is not aware of any exceptional events or lit-igation likely to have a substantial impact on its financialposition, assets, business or the results of its operations.



in accordance with an addendum to the share sale agree-ment signed on June 30, 2006. The applicable paymentdates are as follows:

• October 13, 2006: ?95,000 included in goodwill as ofDecember 31, 2006• January 15, 2007• March 15, 2007

A ?69,000 liability was recorded in the 2006 consolidatedfinancial statements for the last two installments of theearn-out payment.

Also on June 30, 2006, Econocom Managed ServicesSA/NV acquired a further 1.68% of the capital ofEconocom Telecom Services SA/NV for ?14,000. Theremaining 3.32% of this company that is not alreadyowned by Econocom Managed Services SA/NV will bepurchased on June 30, 2008. The price of this remaininginterest will be calculated by reference to the consolidat-ed operating profit f igures of Econocom TelecomServices SA/NV in 2006 and 2007, but may not be lowerthan ?36,000 and may not exceed ?182,000. Basedon the results for 2006 and forecasts for 2007, the priceof this interest will not be higher than the minimumamount of ?36,000. Consequently, a liability in thisamount was recorded in the consolidated balance sheetas of December 31, 2006.

Econocom Products and Solutions (EPS SAS) France

Prior to 2006 Econocom France SAS granted a put optionto one of the company’s senior managers in relation to375 shares (2.5% of the capital) that he held in EconocomTelecom SAS. During 2005, Econocom Telecom SAS wassold to Belgium-based Econocom Managed ServicesSA/NV, and subsequently merged with Signal Service intoEconocom Products and Solutions.

Following this merger, which was completed in May 2005,the above-mentioned 375 shares in Econocom TelecomSAS were converted into 8,625 shares in EconocomProducts and Solutions, representing 0.44% of that company’s capital.

2-5-3 Off-balance sheet commitments

2-5-3-1 Commitments to purchaseshares (see Note 2-2-1 for details concerning goodwill)

CHanSE SA/NV

On October 29, 2004, Econocom Managed ServicesSA/NV (Belgium) acquired a 79.57% stake in the Belgiancompany CHanSE SA/NV, with the long-term aim of hold-ing a 100% interest in the company. The core business ofCHanSE SA/NV (renamed Econocom Telecom ServicesSA in 2005) is the management of mobile phone fleetsand mobile and/or fixed telephone lines.

CHanSE SA/NV has a wholly-owned subsidiary, 2B MobileSPRL (renamed Econocom Telecom SPRL in 2005), whichis a retail specialist for mobile phones and accessories.

Econocom Managed Services SA/NV undertook toacquire the remaining shares in CHanSE SA/NV in twophases – one-third of these shares were purchased onJune 30, 2006, and the remaining two-thirds will beacquired on June 30, 2008. The purchase price for theseadditional shares is based on the consolidated operatingprofit figures of Econocom Telecom Services SA/NV from2004 through 2007. The total price may not be lower than?275,000 and may not exceed ?1,000,000.

In November 2005, Econocom Managed Services SA/NVsold 5% of its interest in the company to one of its seniormanagers. Further to this sale, Econocom ManagedServices SA/NV undertook to buy back this 5% stake inaccordance with the same terms and conditions set outabove. Based on these calculation methods, the total pur-chase price for this stake may not be lower than ?50,000and may not exceed ?196,000.

On June 30, 2006, Econocom Managed Services SA/NVacquired a 20.42% stake in Econocom Telecom ServicesSA/NV for ?275,000 plus an earn-out payment, calculated



124 •

2007, which amended the applicable calculation formu-la. In accordance with this addendum, the purchase con-sideration for Synopse SAS will be calculated based on amultiple of the combined average profit before tax of bothSynopse SAS and Kentron for the period from January 1,2008 through December 31, 2010. The total purchaseprice may not be lower than the amount recorded at thetime of the acquisition in 2003, i.e. ?394,000.

Having analyzed the past, present and future situation, asof December 31, 2006 the Group considered that it shouldwait for confirmation that the combined companies’ prof-it figures for 2006 represent an overall upward trend beforesetting aside a provision for additional purchase consider-ation exceeding the minimum agreed amount.

For Connected Services

On August 8, 2005, Econocom Telecom Services SAacquired the entire capital of For Connected Services, aDutch company specializing in Data Mobile services. Thepurchase price for this company may include additionalpurchase consideration calculated based on the compa-ny’s average operating prof it for the period fromSeptember 1, 2005 through December 31, 2008.

The total purchase price may not be lower than ?175,000and may not exceed ?2,000,000.

Only the minimum purchase price of ?175,000 was takeninto account in the 2006 consolidated financial statements.As of December 31, 2006 the Group deemed that nocontingent liability should be recorded in the consolidat-ed financial statements in respect of the additional pur-chase consideration relating to this acquisition.

A2Z Holding

In August 2005, Econocom Group SA/NV acquired theentire capital of the Belgian company A2Z Holding NVwhich in turn held 100% of the Belgium-based companyA2Z Solutions NV and France-based Data NetworksFrance SARL.

A new agreement including a call option was signedbetween the above-mentioned minority shareholder andEconocom Managed Services SA/NV, exercisable fromDecember 31, 2006 through December 31, 2012. The calloption was exercised on January 4, 2007.

The financial impacts of this agreement were included inthe 2006 consolidated financial statements.

2-5-3-2 Commitments to pay additional purchase consideration (see Note 2-2-1 for details concerninggoodwill).

Synopse SAS

Synopse SAS specializes in consulting and IT integrationand has been at the forefront of the implementation of theIT Infrastructure Library (ITIL) in France.

Synopse SAS was acquired by Econocom ManagedServices SAS (France) in 2003. In accordance with anaddendum to the sale agreement signed on June 7, 2005,additional purchase consideration may be payable basedon a multiple of the company’s average recurring profit forthe period from January 1, 2005 through December 31,2007. The total purchase price of the company may not belower than ?400,000, which was the price recorded in theEconocom Group’s financial statements at the time of theacquisition in 2003.

As of December 31, 2006, the contingent liability corre-sponding to the additional purchase consideration to bepaid in 2007 was valued at ?64,000, based on the above-described calculation method. This liability was recordedin the 2006 consolidated financial statements. However,following the March 1, 2007 acquisition by EconocomManaged Services SAS (France) of Kentron – a competi-tor of Synopse SAS in the area of ITIL consulting – andthe decision to combine Kentron and Synopse, the meth-ods for calculating the additional purchase considerationrelating to Synopse were reviewed. An addendum to theoriginal share sale agreement was signed on January 23,



2-5-3-3 Commitment to invest in a venture capital fund

MBO Capital venture capital fund

Since October 2002, Econocom Group has invested?4,674,000 in the MBO Capital venture capital fund andhas irrevocably committed capital of up to ?5,000,000 tothe fund.

This represents a 10-year unsecured investment, whichoffers expected returns exceeding the risk-free rate. Fundsare not accessible before the end of the term and furtherdisbursements can be called for until March 2008. As ofDecember 31, 2006, the maximum amount still to be calledtotaled ?326,000.

In 2006, the Group’s investment in this fund was recog-nized in the consolidated financial statements at fairvalue at December 31, in accordance with IAS 32 and39 relating to financial instruments.

The management team of A2Z Holding has developed aninnovative approach to providing IT and telecommunica-tions services to SMEs.

The sale agreement provides for additional purchase con-sideration to be calculated based on the A2Z group’sfinancial performance and the period of time the formershareholders occupy a managerial role within the company.

The purchase price will be determined based on a multi-ple of A2Z Holding NV’s average consolidated operatingprofit over the period from September 1, 2005 throughDecember 31, 2008 or December 31, 2009, dependingon the option chosen. Irrespective of which of theseoptions is selected, the purchase price may not be lowerthan ?300,000 and may not exceed ?9,500,000.

Only the minimum purchase price of ?300,000 has beentaken into account in the consolidated financial state-ments. In view of the losses reported by the company in2005 and 2006, the total purchase price should not beabove this minimum agreed amount.

In addition, one of the company’s two managers hassigned an addendum to the sale agreement relating toA2Z Holding NV’s shares, stating that the definitive pur-chase price of his shares represents the minimum agreedamount.



126 •

2-5-3-4 Guarantees

(in € thousands)

MortgagesCarrying amount of buildings pledged as collateral 998Collateral value 3,332Guarantees given 17,748• Carrying amount of assets pledged by certain subsidiaries as guarantees for factors 2,996• Guarantees given (amounts authorized) by Econocom Group to third parties (banks and/or suppliers)

on behalf of subsidiaries 14,752Seller’s warranties 449Granted to the acquirers of the following companies:• Econocom Services BV by Econocom Nederland BV, valid until June 28, 2008• Econocom (Suisse) by Econocom Group SA, valid until February 28, 2007

2-5-3-5 Commitments to acquire property, plant and equipment

(in € thousands)

Lease contracts signed in prior years, for delivery in 2006 and subsequent years 21,338

2-5-3-6 Commitments to sell property, plant and equipment

(in € thousands)

Lease contracts signed in prior years, for delivery in 2006 and subsequent years 21,338

2-5-3-7 Commitments received: deposits and guarantees

(in € thousands)

Guarantees payable on first call 1,024



2-5-4 Contingent liabilities

The Group had no material contingent liabilities as of December 31, 2006.

2-5-5 Management remuneration

(in euros) 2006 2005Remuneration allocated to members of the Board of Directors(including attendance fees) 1,004,648 2,041,424Remuneration allocated to members of Econocom’s management bodies 1,849,822 1,426,000Stock options held by members of Econocom’s administrative and management bodiesNumber of stock options outstanding as of December 31 790,000 1,027,400



128 •

2-5-6 Related-party transactions Transactions between the parent company and its subsidiaries, which are related parties, have been eliminated onconsolidation and are not presented in this note.

The transactions with related parties summarized below mainly concern the principal transactions carried out withcompanies in which the Chairman of Econocom Group’s Board of Directors holds a directorship.

Econocom International NV is an unlisted holding company which has a 49.27% stake in Econocom Group. Alliance Support Services SA, Audevard and SCI Pergolèse are subsidiaries of Econocom International NV but are notincluded in the scope of consolidation of the Econocom Group.

(in € thousands) ALLIANCE SUPPORT SERVICES ECONOCOM INTERNATIONAL NV2006 2005 2006 2005 2

I. Asset balances with related parties 323 5,087 1 81. Other financial assets 0

1.1. Securities other than shares1.2. Loans1.3. Other

2. Trade and other receivables 323 5,087 1 82.1. Trade receivables 323 156 1 82.2. Other receivables 4,931

3. Other assetsII. Liability balances with related parties 1,333 345 4,466 6,4721. Liabilities bearing interest 4,445 6,445

1.1. Bank borrowings1.2. Finance leases1.3. Bank overdrafts1.4. Other borrowings 4,445 6,445

2. Liabilities not bearing interest3. Trade and other payables 1,333 345 15 21

3.1. Trade payables 1,333 345 15 213.2. Other payables

4. Other liabilities 6 6III. Related-party transactions1. Sales of goods 59 15 72. Purchases of goods (48)3. Services rendered 540 6924. Services received (4,737) (2,684) (577) (723)




INTERNATIONAL NV SCI PERGOLESE AUDEVARD TOTAL2005 2006 2005 2006 2005 2006 2005

8 384 0 1 0 709 5,0950 169 0 0 0 169 0

0 00 0

169 169 08 215 0 1 0 540 2,0958 1 325 164

215 215 4,9310

6,472 0 0 0 0 5,799 6,8176,445 0 0 0 0 4,445 6,445

6,445 4,445 6,445

21 0 0 0 0 1,348 36621 1,348 366

6 6 6

1 67 15(48)

11 540 703(723) (850) (5,314) (4,257)


130 •

2-5-8 Assessments made byManagement and sourcesof uncertainty

The main areas in which judgment was exercised byManagement were as follows:

• Decisions regarding goodwill impairment: the methodol-ogy applied factors in future cash flows and assumptionsconcerning growth and interest rates. The two main acqui-sitions concerned are A2Z and Signal Service. • Valuation of the phantom shares and stock options grant-ed since November 2002: the actuarial formulae used areaffected by assumptions concerning employee turnover,developments and volatility of the share price of EconocomGroup, as well as the probability of managers achievingtheir objectives (see Note 2-3-1-3).• Assessment of the probability of recovering the tax losscarryforwards of the Group’s subsidiaries.• Determining the risk of non-recovery of the lease pay-ments due on self-financed contracts in France: asEconocom generally puts in place non-recourse refinanc-ing for its contracts, the Group has no historical statisticsrelating to the non-recovery of such payments. In addition,no non-payment incidents have arisen in the recent past.As a result, provisions have been recognized on the basisof a risk assessment. These provisions are reviewed at leastevery six months taking into account any changes in thesituation of the clients and contracts concerned.• In addition, as part of the normal course of its operations,the Group is subject to various claims and disputes whichthe company considers will not lead to any material costand will not have any material impact on its financial posi-tion, operations and/or assets.

Apart from those related to the judgments listed above, theGroup’s principal sources of uncertainty are:• The ability to recover, over and above the amounts rec-ognized in the financial statements, the substantial tax losscarryforwards (?66 million) of several subsidiaries.• For much lower amounts, the possible consequences ofthe calling on sellers’ warranties granted at the time of cer-tain disposals made in recent years.

2-5-7 Events after the balancesheet date

In accordance with its strategy of achieving both organicand external growth, the Econocom Group has undertakenthree acquisitions since December 31, 2006:

• On February 1, 2007, the Group’s French subsidiaryEconocom Managed Services SAS acquired Kentron, themain independent competitor of Synopse – a companyspecializing in ITIL consulting services which is alreadyowned by Econocom Managed Services. By combiningSynopse SAS and Kentron, Econocom Managed ServicesSAS has become France’s leading provider of ITIL con-sulting services – a recognized methodology aimed at opti-mizing information technology service management. TheGroup now counts 35 specialized consultants in France,and around thirty in the Benelux countries.

• Since year-end 2006 the Group has also pursued itsdevelopment strategy in the Telecom Services businessby acquiring the B-to-B operations of The Phone House.Through this acquisition Econocom’s Telecom Servicesbusiness has strengthened its position as the independentleader in B-to-B distribution in France and has speededup its expansion in the area of managed telecom services.

• Lastly, the Group has acquired Alliance Support ServicesSA, a company with 450 employees that generated ?34million in revenue in 2006. By adding Alliance SupportServices to its operations in France, Econocom has con-solidated and rounded out its service offering, especially inthe area of implementation and maintenance services.

At the forthcoming Annual General Meeting, the Board ofDirectors will recommend raising the gross dividend pershare to ?0.20 (?0.16 net), with the dividend payment totake place in early June 2007.




Report of the Statutory Auditors onthe consolidated financial statements for the year ended December 31, 2006


132 •

The parent company financial statements

Income statement

Balance sheet

Cash flow statement

*The parent company financial statements have been prepared in accordance with Belgian GAAP.

Condensed parent company financial statements*for the year ended December 31, 2006



Econocom Group SA/NV parent company financial statements In accordance with article 105 of the Belgian Company Code, Econocom Group SA/NV hereby states that the followingfinancial statements are an abridged version of the full annual financial statements that can be obtained from the Companyand which will be filed with the Banque Nationale de Belgique. This abridged version does not contain all of the notes tothe parent company financial statements or the Statutory Auditors’ report, which contained an unqualified audit optionin relation to the annual financial statements of Econocom Group SA/NV.

Condensed parent companyfinancial statementsfor the year ended December 31, 2006


134 •

(in € thousands) 2006 2005II. Cost of sales 10,456 10,607

A. Materials and goods 80 81B. Services and miscellaneous goods 6,807 6,578C. Personnel costs (incl. social security charges) and pensions 3,170 3,448D. Amortization/depreciation and impairment of start-up costs, property, 296 497

plant and equipment and intangible assetsE. Impairment of inventories, work-in-progress and trade receivables 22

(increases +, reversals -)F. Provisions for contingencies and charges (increases +, utilizations and reversals -) 71G. Other operating expenses 10 3

V. Financial expenses 1,402 2,100A. Interest expense 487 284B. Impairment of current assets other than those referred

to in II E (increases +, reversals -) (47)C. Other financial expense 915 1,863

VIII. Exceptional expenses 4,614 178B. Impairment of long-term investments 4,602 40C. Provisions for exceptional contengencies and charges (increases +, utilizations -)D. Losses on disposal of fixed assets 12 94E. Other exceptional expense 44

X.A. Income tax (8) 46

XI. Profit for the year 25,495 11,367

TOTAL 41,959 24,298

Income statementfor the year ended December 31, 2006

EXPENSES




(in € thousands) 2006 2005I. Sales of services 9,558 9,940

A. Revenue 7,363 8,030C. Own work capitalizedD. Other operating income 2,195 1,910

IV. Financial income 12,527 10,499A. Income from long-term investments 12,112 10,264B. Income from current assets 324 176C. Other financial income 91 59

VII. Exceptional income 19,874 3,859A. Reversals of impairment of property, plant and equipmentB. Reversals of impairment of long-term investments 3,682D. Gains on disposal of fixed assets 19,874 129E. Other exceptional income 48

X. Tax adjustments and reversals of tax provisions 0 0

TOTAL 41,959 24,298

Appropriation of profitA. Total profit available for distribution 36,085 20,823

1. Profit for the year 25,495 11,3672. Retained earnings 10,590 9,456

C. Appropriation to equity (4,757) (5,593)2. Legal reserve 0 (14)3. Other reserves (4,757) (5,579)

D. Appropriation to retained earnings (25,528) (10,590)1. Amount carried forward (25,528) (10,590)

F. Profit available for distribution (5,800) (4,640)1. Dividends (5,800) (4,640)

Income statementfor the year ended December 31, 2006

INCOME


136 •

(in € thousands) Dec. 31, 2006 Dec. 31, 2005Fixed assets 99,701 89,517

II. Intangible assets 206 412

III. Property, plant and equipment 712 740A. Land and buildings 514 538B. Plant and equipment, fixtures and fittings 175 179E. Other property, plant and equipment 23 23

IV. Long-term investments 98,783 88,365A. Related parties 95,079 85,296

1. Shares 39,098 41,2422. Receivables 55,981 44,054

C. Other long-term investments 3,704 3,0691. Shares 3,694 3,0152. Receivables and cash guarantees 10 54

Current assets 30,463 18,597VI. Inventories and work-in-progress 55 0A. Inventories 55 0

VII. Receivables due within 1 year 7,987 4,729A. Trade receivables 841 1,614B. Other receivables 7,146 3,115

IX. Short-term investments 18,015 308A. Treasury stock 5,015 258B. Other investments 13,000 50

X. Cash and cash equivalents 4,329 13,458

XI. Accruals and other assets 77 102

TOTAL ASSETS 130,164 108,114

Balance sheetas of December 31, 2006

ASSETS




(in € thousands) Dec. 31, 2006 Dec. 31, 2005Equity 106,318 86,623

I. Share capital 16,181 16,181A. Subscribed capital 16,181 16,181

II. Additional paid-in capital 55,038 55,038

III. Revaluation reserve 2,520 2,520

IV. Other reserves 7,051 2,294A. Legal reserve 1,618 1,618B. Unavailable reserves 5,015 258

1. For treasury stock 5,015 258D. Available reserves 418 418

V. Retained earnings 25,528 10,590

Provisions and deferred taxes 226 154VII. A. Provisions for contingencies and charges 226 154

4. Other contingencies and charges 226 154Liabilities 23,620 21,337

IX. Short-term liabilities (due within 1 year) 23,346 21,337A. Current portion of long-term liabilitiesB. Borrowings 15,372 14,028

1. Bank borrowings 615 1072. Other borrowings 14,757 13,921

C. Trade payables 1,586 1,7351. Amounts due to suppliers 1,586 1,735

E. Accrued taxes and personnel costs 492 8331. Taxes 6 822. Personnel costs (incl. social security charges) 486 751

F. Other liabilities 5,896 4,741

XII. Accruals and other liabilities 274 0

TOTAL EQUITY AND LIABILITIES 130,164 108,114

Balance sheetas of December 31, 2006

EQUITY AND LIABILITIES


138 •

(in € thousands) 2006 2005Profit for the year 25,495 11,367Income tax expense (8) 46Depreciation, amortization and impairment 4,931 (3,145)Change in provisions 72Gains/losses on disposals of long-term investments (19,861) (32)Dividends received from investments (10,350) (9,230)Interest received on financial receivables due in more than 1 year (1,762) (1,034)Gains/losses on sales of treasury shares 859 1,793

Operating cash flow (a) (624) (235)Change in receivables due within 1 year (3,258) 6,352Change in other current assets (30)Change in trade payables (149) (164)Change in accrued taxes and personnel costs due within 1 year (341) 587Change in other current liabilities 76

Change in working capital (b) (3,702) 6,775Income tax expense (c) 8 (46)

Net cash provided by/(used) in operating activities (a+b+c) = d (4,318) 6,494Cash flows from investing activitiesAcquisition of property, plant and equipment and intangible assets for internal use (235) (261)Disposal of property, plant and equipment and intangible assets for internal use 131 88Acquisition of investments (903) (498)Disposal of investments 23,020 10,939Acquisition of financial receivables due in more than 1 year (24,578) (42,952)Repayment of financial receivables due in more than 1 year 8,049 30,358Acquisition of other long-term investments (1,499) (1,315)Disposal of other long-term investments 864 165Dividends received from investments 10,350 9,230Interest received on financial receivables due in more than 1 year 1,762 1,034

Net cash provided by investing activities (e) 16,961 6,788 Cash flows from financing activities Issuance of shares and share premiums 1,110Change in financial liabilities due within 1 year 1,344 6,909Acquisition of treasury stock (7,648) (9,272)Disposal of treasury stock 2,032 1,900Dividends paid during the year (4,550) (4,452)

Net cash used in financing activities (f) (8,822) (3,805)Change in cash and cash equivalents (d+e+f) 3,821 9,477

Cash flow statement




Information about the Company

1. General information

• Company name: Econocom Group SA/NV

• Registered office: Clos du Parnasse 13 A/B – 1050Brussels (Ixelles), Belgium. The registered office may betransferred to any other location in Belgium upon decisionof the Board of Directors.

• Legal form, constitution, consultation of legal documents.

Econocom Group SA/NV is a société anonyme governedby the laws of Belgium. It was incorporated under a deedfiled by Jacques Possoz, notary, on April 2, 1982, whichwas published in the appendices to the Moniteur Belge ofApril 22, 1982 (no. 820-11).

Econocom Group SA/NV is a company that publiclyraises, or has publicly raised, capital under the terms ofcompany law.

The Company is registered with the Brussels corporateregister under number 0422.646.816.

• Term: unlimited.

• Financial year: January 1 to December 31.

• Consultation of legal documents: – The parent company and consolidated financial state-ments and related reports may be consulted at theBanque Nationale de Belgique. – The bylaws and above-mentioned financial statementsand related reports may be consulted at the registry ofthe Commercial Court.– All of the above-mentioned documents may be con-sulted at the Company’s registered office at Clos duParnasse 13 A/B - 1050 Brussels, Belgium.

2. Corporate purpose (Article 3 of the bylaws)

The Company’s purpose, in Belgium and abroad, is:

• the purchase, sale, leasing and supply of computers andIT products generally, and all related financial operations;

• the negotiation of any and all business process engi-neering contracts with companies and the provision ofany and all technical assistance in the field of informationtechnologies;

• the design and implementation of electronic servicesand any and all related programming systems.

To this end, the Company may acquire, manage, operateand sell patents, trademarks, and technical and industrialknow-how.

The Company may establish branch offices or subsidiariesin Belgium or abroad.

The Company may deal with any and all Belgian or foreigncompanies with similar or complementary activities bymeans of asset transfers, partial or total mergers, sub-scription to initial capital or capital increases, financialinvestments, disposals, loans or any other means.


140 •

At the same time, the Econocom Group boasts a van-guard offering of IT and telecom services for SMEs, com-bining product supply with operational, administrativeand financial services. This comprehensive managementsolution is billed on the basis of a monthly subscriptioncost per user.

European presence

The Econocom Group’s extensive European reach, whichit has built up over the past 25 years, has generated a trulyinternational culture and broad expertise. Thanks to thisoperating footprint, the Group is able to effectively serveinternational clients that are seeking a partner to meet theirneeds.

Independent advice

The Econocom Group is independent of hardware andsoftware manufacturers and financial companies. Thisindependence enables it to act as a neutral advisor forclients and to recommend the best solution in a spirit oftotal impartiality.

Econocom’s main competitors

None of the Group’s competitors has as large a productand service offering in as many countries. The main com-petitors in each of its businesses are as follows:

• Managed Services: Cap Gemini, Atos, Steria, EDS,Unilog (Logica-CMG group), and GFI, which have an inter-national presence, but do not offer distribution or flexibleleasing services. However, many service companiesdevelop application software (accounting, inventory man-agement, sales management, etc.), which is not part ofEconocom’s current offering.

Competition

Econocom Group stands out from its competition due toits:

• Comprehensive and specialized offering in the manage-ment of corporate distributed infrastructures.

• Dual skills in IT and telecommunications services.

• Independence from IT equipment manufacturers andfinancial companies.

• Presence in 8 European countries.

Comprehensive offering

At present, there is no other independent player in Europethat can design, supply, manage and finance corporate ITand telecommunications infrastructures, and also provideall related services, including the supply and customiza-tion of products and solutions as well as the operational,administrative and financial management of IT andtelecommunications assets and infrastructure.

In addition, the Group launched a telecommunicationsoffering as of 2000, well before its main competitors, andsince then has stepped up its presence by carrying out anumber of acquisitions over the past three years. TheGroup is well positioned to leverage the expected sharpgrowth in the market for mobile services and voice/dataconvergence solutions. It has the required capabilities tomeet future strong demand for mobile solutions as well asfor the management of telecommunications fleets and theirrelated costs.

Competition and recruitment



• attendance at trade fairs and/or the presentation ofcareer opportunities at suitable teaching establishments;

• annual individual staff appraisals to assess objectivesattained and unfulfilled potential. These interviews arecombined with skills enhancement programs.

The Group’s European presence, reputation in its market,broad business base and listing on the Euronext market inBrussels all serve to attract graduates and experiencedstaff alike.

In 2006, the Group focused on strengthening its salesand marketing teams, particularly in the Financial Servicesbusiness.

Following the acquisitions carried out in early 2007, theEconocom Group’s total workforce stood at 2,200.

• Products and Solutions: Systemat and Dolmen(Belgium and Luxembourg), Computacenter (France,Belgium, Germany and the United Kingdom), and SCC(France and the United Kingdom).

• Financial Services: the financial subsidiaries of manu-facturers such as IBM, HP and Dell, and banks’ leasingsubsidiaries (ECS and Arius) do not offer the same degreeof independence or IT specialization as Econocom.Companies such as EMG (Belgium) and CHG (Germany)do not have a comparable geographical coverage, or donot carry out distribution and/or service activities.

• Telecom Services: Econocom has few competitors inthe telecommunications field. Mobile telephone operatorsare more often the Group’s partners than its competitors,and their distributors are above all companies specializedin the sale of mobile telephone equipment and voice sub-scriptions. Companies such as Telindus in Belgium, andCSC and EDS, are not direct competitors of theEconocom Group, as they are positioned in the networksector of the telecommunications market, with Telindusfocused on network integration and the others on networkmanagement.

Recruitment

As is the case for all service-based activities, the recruit-ment of qualified staff is a key success factor.

The Econocom Group has specialized recruitment unitsin each country where it operates and all of its subsidiariesare committed to a pro-active policy of recruiting andretaining skilled employees. The Group’s recruitment pro-gram is supported by:

• an international database of vacant positions at all of theGroup’s subsidiaries, displayed on the corporate website,and the circulation of all career opportunities on a largenumber of specialized recruitment websites;


142 •

2002In 2002 the Group acquired the Belgian company SXConsultants, specialized in IT asset managementprocesses and tools. Other acquisitions includedComdisco France/Promodata, specialized in the admin-istrative and financial management of IT assets, and themaintenance business of TASQ in France.

These acquisitions represented a total investment of some?70 million, including assumed debt.

2002 also saw the inception of the Group’s new business-based organization. This move was intended to ensure acloser alignment with the needs of clients looking for along-term partner committed to operational excellenceacross the board.

2003In April 2003, Econocom acquired Synopse SA, a FrenchIT consulting and integration services firm specialized inmanaging IT infrastructures.

In October 2003, Econocom set up a joint-venture,Econocom Nord Lease, in Germany. The objective of this65%-owned joint venture was to spearhead the develop-ment of Econocom Financial Services’ operations inGermany.

1. Principal investments

As well as recruiting new sales agents, engineers andtechnicians, Econocom Group SA/NV carries out exter-nal growth transactions each year in order to acquirespecific skills or speed up its expansion. The Group’sprincipal investments between 2002 and 2006 concernthe purchase of the following companies:

Recent developments and outlook

The Econocom Group’s development strate-gy combines both organic and externalgrowth objectives.



2005During 2005, the Econocom Group continued to imple-ment its strategy of focusing on its key businesses andstrategic markets, and to expand in the area of B-to-Btelecommunications services.

To this end it sold its 33% interest in Ace Computer LLCin the US (operating in the Products and Solutions busi-ness), as well as its Switzerland-based FinancialServices subsidiary. At the same time the Group carriedout the following external growth transactions in thetelecommunication services market:

• In August, the Group extended its presence fromFrance and Belgium to the Netherlands, acquiring ForConnected – a company specialized in data mobileservices. This acquisition rounded out the data mobileoffering already provided by the Group’s French andBelgian subsidiaries.

• In October, the Group acquired the B-to-B business ofJCA, a mobile services operator with a strong position insouthwest France, thereby reinforcing Econocom’s cov-erage of the French market for cellular fleet management.

In August 2005, the Group acquired A2Z Holding NV. Thiscompany has developed a vanguard approach to provid-ing IT and telecom solutions to SMEs, by providing com-prehensive services for managing workstations andtelecommunications resources, which it bills based on amonthly cost per user.

The acquisitions carried out in 2005 represented a totalinvestment of some ?5 million (including current accountadvances) for Econocom Group SA/NV.

2004On February 1, 2004, the Group sold its French mainte-nance operations to Alliance Support Services SA. Thisbusiness had around 450 employees and generated?32 million in revenue.

As part of its 2003-2007 “Share Five” strategic plan, in2004 the Group stepped up the pace of its diversificationinto the business-to-business (B-to-B) telecommunica-tions market, viewed by Econocom as a new avenue forgrowth. The scope of consolidation was extended duringthe year due to the following transactions:

• the acquisition in August of Signal Service SA, a B-to-Bmobile telephony specialist in France;

• the purchase in November of a 74.57% interest inCHanSE SA, a Belgium-based B-to-B mobile telephonyspecialist, as well as in CHanSE’s wholly-owned subsidiary2B Mobile SprL.

These two acquisitions represented an aggregate invest-ment of some ?10 million.


144 •

2006In 2006, the Group pursued its strategy of expanding inthe telecom services business through the followingtransactions:

• The purchase of the B-to-B business of Avenir Telecom– a major player in France’s mobile telephony market. Thistransaction enabled the Group to bolster EconocomTelecom Services’ business of distributing and manag-ing mobile telephony fleets, and to extend its sales andmarketing presence to the southeast of France – a high-potential region.

• The acquisition by Econocom Managed Services SA/NVof an additional stake in Belgium-based EconocomTelecom Services (formerly CHanSE), raising its interestfrom 74.57% to 96.68%.

Also during the year, Econocom Group SA/NV acquireda 35% stake in the German company Econocom Albis,increasing its interest to 100%. Econocom Albis special-izes in administrative and financial management services.

These acquisitions represented an aggregate investmentof some ?2 million.

Lastly, in order to concentrate its managerial and financialresources on its strategic businesses, the Group sold itsinterest in the Dutch company Econocom Services BV.Specialized in mainframe services, this company no longerfit with the Econocom Group’s core business.

2. Changes in capital

Most of the Group’s development has been equity-financed.

As of December 31, 2006, the Company’s share capitalstood at ?16,180,922.08 and was composed of29,000,000 ordinary shares with no stated par value, heldin registered or bearer form, in units of one, five, ten andfifty shares. The capital is fully paid-up.

Authorized unissued capital stood at ?15,894,722.08.

Changes in the Company’s capital since 2002 correspondto capital increases carried out for the purpose of allocat-ing shares on the exercise of employee stock options.

The cancellation of shares in 2002, 2004 and 2005 hadno impact on share capital.


External growth transactions carried out in the first quar-ter of 2007 – notably the acquisition of the French main-tenance services company Alliance Support Services –are expected to have a favorable impact on results for theyear as a whole. In addition, the Group expects to seepositive returns on its investments made in 2005 and 2006to bolster its sales and marketing team and develop newbusinesses.

Lastly, the Group also intends to continue its drive to opti-mize its management processes and improve productivity.

In view of these conditions, Management is aiming to sig-nificantly increase the Group’s operating profitability andbottom-line profit figure for 2007.

At the Extraordinary General Meeting on May 17, 2005,the shareholders renewed, for a five-year period, theauthorization given to the Board of Directors to increasethe Company’s capital on one or several occasions, by amaximum amount of ?16,037,822.08.

Pursuant to its policy relating to treasury shares,Econocom Group SA/NV and its subsidiaries held799,034 Econocom Group SA/NV shares as of December31, 2006, representing 2.76% of the total number ofshares in issue.

3. Outlook

The beginning of 2007 saw a rise in the number of ordersand contracts, spurred by growth in 2006 and a favorableoperating environment for the Econocom Group’s marketsegments.

The Group’s moves to strengthen the management teamof its Telecom Services business, coupled with the suc-cessful integration of the businesses acquired in 2005 and2006 began to bear fruit in the second half of 2006 andshould enable the Group to pursue – and even speed up– its growth strategy. Several acquisitions are planned forthis business during the course of 2007.


Changes in the Company’s share capital and number of shares since January 1, 2002 are summarized in the table below.

Date of Type Change in the Change in Issue Total amount of Number Share operation of issue number of shares capital (€) premium (€) the operation (€) of shares capital (€)

01/01/2002 8,149,105 16,018,319.0804/30/2002 Exercise of stock options 9,900 19,503.00 96,087.36 115,590.36 8,159,005 16,037,822.0806/27/2002 Four-for-one stock split 32,636,020 16,037,822.0812/18/2002 Cancellation of treasury shares (1,136,020) 31,500,000 16,037,822.0812/22/2004 Cancellation of treasury shares (1,500,000) 30,000,00007/20/2005 Exercise of stock options 265,000 143,100.00 966,650.00 1,109,750.00 30,265,000 16,180,922.0812/22/2005 Cancellation of treasury shares (1,265,000) 29,000,000 16,180,922.0812/31/2006 29,000,000 16,180,922.08

Recent developments and outlook


146 •

10-year consolidated highlights

(in € millions) Belgian GAAP IFRS

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Balance sheetNon-current assets(excl. goodwill) 12.52 16.36 24.89 47.29 47.76 124.42 74.01 39.19 34.20 31.02Goodwill 7.56 12.00 10.52 8.92 7.68 10.35 7.68 10.62 14.66 16.56Current assets (excl. cash and cash equivalents and short-term investments) 56.42 71.02 77.54 181.59 171.01 182.11 152.71 183.3 167.86 180.77Short-term investments 18.02 24.44 46.09 53.64 57.46 71.50 102.27 60.05 60.07 76.62

Total assets 94.52 123.82 159.04 291.44 283.91 388.39 336.67 293.16 276.79 304.96Equity attributable to shareholders of the parent company 17.29 27.24 57.01 74.28 84.48 87.27 72.80 83.18 87.69 88.23Minority interests 0.02 0 0 0 0.40 0.55 0.76 0.35 0.36 0.11Provisions 5.23 6.50 8.36 11.10 11.18 28.27 30.44 13.28 6.20 5.22Borrowings 11.45 12.27 16.14 23.43 17.08 20.12 21.19 16.79 17.84 23.24Other liabilities 60.53 77.81 77.53 182.63 170.77 252.19 211.48 179.56 164.70 188.16

Total liabilities 94.52 123.82 159.04 291.44 283.91 388.39 336.67 293.16 276.79 304.96

Income statement

Consolidated sales of products and services 309.87 413.36 630.77 730.15 968.99 976.59 1,041.74 602.39 550.94 589.81Profit from ordinary activities before amortization of goodwill 5.68 7.93 12.24 17.27 21.68 22.13 11.94 - - -Recurring operating profit - - - - - - - N/M 18.99 16.47Operating profit - - - - - - - 17.83 18.99 14.50Profit from ordinary activities 3.94 6.22 9.75 14.47 18.06 19.37 8.94 17.61 19.03 14.49Profit/(loss) before amortization of goodwill 4.26 5.85 8.92 11.85 19.49 13.22 (4.48) - - -Profit/(loss) for the year 2.53 4.14 6.43 9.05 15.86 10.47 (7.48) 13.43 14.18 10.17Cash-flow (a) 6.67 9.07 14.48 15.22 26.11 32.50 22.57 8.16 21.99 20.19Return on equity (b) 23% 23% 17% 19% 21% 22% 12% 21% 22% 16%

Breakdown of revenue by business

Products and Solutions 87 116 192 300 418 308 242 203 191 188Managed Services 25 37 56 87 123 119 149 100 111 100Financial Services 197 259 380 338 424 545 647 299 248 280Telecom Services 22

Total 309 412 628 725 965 972 1,038 602 550 590

Breakdown of revenue by geographical region

Belgium and Luxembourg 142 168 202 213 215 209 207 165 173 174Netherlands 39 51 156 87 153 198 232 78 69 68France 53 99 160 307 464 463 514 286 264 302U.K. 32 30 27 23 29 18 9 8 9 5Switzerland 28 43 58 58 36 21 22 - - -Spain 9 11 11 9 13 20 38 17 13 20U.S.A. 6 10 14 28 55 39 12 31 - -Italy - - - - - 4 4 17 22 21

Total 309 412 628 725 965 972 1,038 602 550 590

(a) Consolidated cash flow corresponds to profit/(loss) for the year + amortization/depreciation and impairment (of non-current assets, inventories and receivables) + provisions for contingencies and charges + amortization of goodwill (ordinary and exceptional) + exceptional impairment, provision charges and reversals – debt waivers (in 1994 and 1995).

(b) Return on equity corresponds to profit from ordinary activities before tax/equity as of December 31.



(in € millions) Belgian GAAP IFRS

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Number of shares (as of December 31)

Ordinary shares 23,703,552 25,359,888 28,192,176 32,422,892 32,596,420 31,500,000 31,500,000 30,000,000 29,000,000 29,000,000AFV (preferred shares) 0 0 0 0 0 0 0 0 0 0Total 23,703,552 25,359,888 28,192,176 32,422,892 32,596,420 31,500,000 31,500,000 30,000,000 29,000,000 29,000,000Free float 23.80% 31.05% 42.54% 49.21% 46.34% 44.70% 45.01% 43.19% 43.13% 40.15%

Per share data (in €)

Net dividend (on ordinary shares) 0.025 0.028 0.038 0.053 0.075 0.075 0.075 0.112 0.12 0.15Gross dividend (on ordinary shares) 0.033 0.038 0.05 0.07 0.10 0.10 0.10 0.15 0.16 0.20Payout rate (c) 20% 15% 14% 16% 22% 22% 41% 33% 33% 58%Profit from ordinary activities before amortization of goodwill 0.239 0.313 0.435 0.535 0.65 0.70 0.38 - - -Recurring operating profit - - - - - - - N/M 0.65 0.57Operating profit - - - - - - - 0.60 0.65 0.50Profit from ordinary activities 0.166 0.245 0.345 0.445 0.555 0.61 0.28 0.59 0.66 0.50Profit/(loss) before amortization of goodwill 0.18 0.231 0.318 0.388 0.585 0.42 -0.14 - - -Profit/(loss) for the year 0.107 0.163 0.228 0.28 0.488 0.33 -0.24 0.45 0.49 0.35Consolidated cash flow 0.283 0.358 0.513 0.47 0.695 1.03 0.72 0.27 0.76 0.70Equity attributable to shareholders of the parent company 0.729 1.078 2.023 2.29 2.593 2.77 2.31 2.77 3.02 3.04Price/earnings (before goodwill) 12 25 26 9 9 9 N/A - - -Price/earnings (after goodwill) (d) 21 35 36 12 11 11 N/A 13 13 19Price/cash flow (d) 7.8 16.2 16.0 7.0 8.0 4.0 7.1 22 8 10Net yield (e) 1.12% 0.49% 0.46% 1.57% 1.43% 2.00% 1.47% 1.93% 1.80% 2.25%Gross yield (e) 1.50% 0.65% 0.61% 2.09% 1.91% 2.66% 1.96% 2.59% 2.42% 3.00%

Stock market data (in €)

Average share price 1.48 4.26 8.90 6.27 4.32 4.80 4.97 5.84 6.42 6.35As of December 31 2.21 5.80 8.20 3.34 5.24 3.75 5.10 5.80 6.62 6.66High 2.21 6.04 12.50 8.88 5.60 6.13 5.90 6.23 6.92 7.05Low 1.01 2.32 5.63 3.34 2.68 2.50 3.90 5.03 5.70 5.09Annual return (at end-December) (f) 106% 164% 42% -58% 59% -27% 38% 16% 16% 3%Annual market return (g) 36% 44% -7.20% -5.02% -4.91% -22.50% 16.01% 38.19% 28.09% 26.17%Annual trading volume (in units) 4,025,616 5,595,040 8,456,600 3,918,372 3,685,716 3,105,787 3,034,001 5,880,902 5,127,011 4,833,457Average daily trading volume 16,160 22,464 38,440 15,680 14,624 12,318 11,992 22,994 19,903 19,098Annual trading volume, in absolute value(in ? millions) 5.96 23.82 78.52 25.66 14.93 14.92 14.68 34.32 32.61 30.99Market capitalization as of Dec. 31 (in ? millions) 52.30 146.95 231.18 108.21 170.72 118.13 160.65 174 192 193Listing market (h) CSF CDF TSC TC TC TC TC TC TC TCNumber of employees as of Dec. 31 (i) 522 835 1,088 1,682 1,859 2,390 2,355 1,700 1,770 2,200

(c) Payout rate = gross dividend/consolidated profit from ordinary activities after tax and before amortization of goodwill until 2003; and gross dividend/profit fromcontinuing operations as of 2004.

(d) Share price as of December 31/profit for the year or cash flow.(e) Net or gross dividend / share price as of December 31.(f) Annual return = (Change in share price as of December 31 relative to December 31 of the prior year + net dividend) / share price as of December 31 of the

prior year.(g) Return index (Belgian All Shares) of Euronext Brussels.(h) The listing market is Brussels. SM = Second Marché from June 9, 1988; CSF = Marché au Comptant Simple Fixing from December 13, 1996;

CDF = Marché au Comptant Double Fixing from March 11,1998; and TSC = Marché à Terme semi-continu from March 11,1999.The Econocom Group share has been listed on the Marché à terme continu (TC) since March 16, 2000.

(i) The figures as of December 31, 2006 include the impact of external growth transactions carried out in the first quarter of 2007.


Design and production: .

Photo credits: Gérard Uferas, Corbis (Jim Craigmyle, Max Power, LWA-Dann Tardif/zefa, B. Bird/zefa) - Getty Images (N. Clements, Altendro Images, B. Lang, Bloom Productions, D. Lees, E. Audras, J. Feingersh, G. Doyle) et X.


Econocom addressesBelgiumClos du Parnasse, 13AB1050 Brussels

Parc HorizonLeuvensesteenweg 510, bus 801930 ZaventemTel.: 32 2 790 81 11Fax: 32 2 790 81 20

France42-46 rue Méderic 92582 Clichy CedexTel.: 33 1 47 56 37 00Fax: 33 1 47 31 03 00

GermanyFriedhofstrasse 1363263 Neu-Isenburg Tel.: 49 6102 88 483-0Fax: 49 6102 88 483-1

ItalyVia Giorgio Stephenson n.43/A20157 MilanTel.: 39 02 39030411 Fax: 39 02 39030400

Luxembourg4, rue d’Arlon8399 WindhofTel.: 352 39 55 50Fax: 352 39 55 88

The Netherlands Kokermolen 11 3994 DG Houten Tel.: 31 30 63 58 333 Fax: 31 30 63 58 300

SpainC/Josefa Valcarcel, 4228027 MadridTel.: 34 91 411 91 20Fax: 34 91 563 92 33

United Kingdom18-20, Kew Road,Richmond Surrey TW9 2NATel.: 44 20 8948 83 77Fax: 44 20 8948 84 81

www.econocom.com

Board of Directors

Jean-Louis BouchardChairman and CEO

Charles de Water

Christian Bret

Gaspard Dürrleman

Rafi Kouyoumdjian

Jean-Philippe RoeschCEO

Patrik VandewalleCEO

Group Management Committee

Jean-Philippe RoeschCEO & Chief Financial Offi cer

Patrik VandewalleCEO & Chief Operating Offi cer

Didier BerthoManaging Director, Managed Services and Products and Solutions, France

Jürgen HeymanManaging Director, Managed Services and Products and Solutions, Benelux

Bruno LemaistreManaging Director, Financial Services

Frans Van GilsManaging Director, Financial Services, Netherlands and Germany

Statutory Auditors

PricewaterhouseCoopersReviseurs d’entreprises SCCRLrepresented by Emmanuèle Attout

Patrik VandewalleJean-Philippe RoeschRafi KouyoumdjianGaspard DürrlemanChristian BretCharles de WaterJean-Louis Bouchard

CONTENTS

1 • Group Profi le

2 • Interview with Jean-Louis Bouchard, Chairman of Econocom

4 • Key fi gures

6 • 2006 Highlights

10 • Econocom’s strategy

12 • Econocom’s service offerings

16 • Some of Econocom’s European clients

18 • Thales

20 • Belgian Finance Ministry

22 • Renault

24 • Electrabel

26 • INSEAD

28 • Telenet

30 • t for telecom

32 • Informática El Corte Inglés

34 • FJH

36 • Gabetti

38 • The BSS Group PLC


Econocom Group Board Members

www.econocom.com

2006Annual report

Eco

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Ann

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