Aubay : Annual Report 2020 (export)

2020 RESULTS

Analyst Meeting (SFAF) of 25 March 2021

2020, AN EXCEPTIONAL YEAR IN AN EXCEPTIONAL CONTEXT Performance indicators highlighting the resilience of Aubay's business model

In the top tier of the most resilient companies

An operating margin from ordinary activities within the guidance range for the medium-term

Growth in headcount driven by the strength of Southern EuropeNet income maintained at a high level and very robust cash generation

ORGANIC GROWTH

-1.5%

vs. guidance of 5%-7%

OPERATING MARGIN FROM ORDINARY

ACTIVITIES

9.7%

vs. 10.2% in 2019

WORKFORCE

6,562

vs. 6,503 at 31/12/2019

NET INCOME

€26.2m

vs. €26.4m in 2019

2020, A CHALLENGING THOUGH SUCCESSFUL AND TRANSFORMATIVE YEAR

• • A year in three phases:

  • ▪ Significant stress over an initial though short lasting period (March 2020)

  • ▪ Rapid and effective adaptation of the production model (a few weeks) through remote working,

  • ▪ A gradual normalization during the second half within an ecosystem that adjusted to the context. All functions of the company (business development, recruitment, support functions) experienced efficiencies from a digital work organization.

• • The lockdown decisions of the second half no longer had an impact at the business level.

• • Teams demonstrated a high degree of agility in inventing new working methods and transforming the company

• • Business development activity accelerated in the second half. The Group signed many new contracts in all countries and business sectors, including the largest ever won in France, €60 million over 5 years.

• • The business model demonstrated not only its resilience but also its ability to add new market share

REVENUE: 2016-2020

417.8+2.1%426.4

2016

2017

2018

Other countriesFrance

REVENUE GROWTH (€M)

% EXCL. FRANCE

49%

CAGR OVER 5 YRS.

9%

UTILISATION RATE

2019

2020

93.4%

REVENUE BY SECTOR IN 2020 2020 vs. 2019

Percentage of 2020 sales Revenue growth: 2020 vs. 2019

WORKFORCE (FULL-TIME EQUIVALENT)

Return to growth in H2: +58 in Q3, +93 in Q4

INCOME STATEMENT HIGHLIGHTS

(€ '000s)

2020

2019

Change

Revenue

Operating profit from ordinary activities

% of revenue

Cost of performance shares

Other operating income and expenses

Operating profit

Net financial income (expense)

Tax income/(expense)

Net income of equity accounted investees

Net income of consolidated companies

% of revenue

Net income attributable to owners of the parent

Earnings per share

10.2%

2.1% -3.7%

-3.0%

(309)

(13,135)

-0.9%

26,409€ 2.00

INCOME STATEMENT HIGHLIGHTS BY REGION:

An overall performance that was homogeneous and of a high level

REVENUE (IN €M)

OPERATING MARGIN FROM ORDINARY ACTIVITIES

2020

2019

2020 2019

Group

426.4

417.8

+2.1%

9.7% 10.2%

France

217.0

213.7

International

209.4

204.0

+1.5% +2.6%

10.0% 9.1%

✓ France was the most impacted with a decrease in organic growth of 5.5% and a decline in profitability which nevertheless remained at a high level. A situation that started to improve in the summer and a resumption in recruitment in the second half.

✓ International development continued to progress, combining growth of 2.6% with an improvement in profitability

BALANCE SHEET HIGHLIGHTS An enviable financial structure

ASSETS

LIABILITIES

In €m

31/12/2020

31/12/2019

Goodwill

Other fixed assets of which right-of-use assets

Other non-current assets

Other current assets

Cash & cash equivalents

131.3 131.4 Shareholders' equity attributable to owners of

26.8 32.3 the parent

18.6 23.0

2.6 3.1 attributable to NCI

168.6 181.9

52.5 24.5 liabilities

Total assets

381.8

372.9

In €m

Shareholders' equity

31/12/2020

31/12/2019

0.1 0.1

7.8 12.8

Borrowings and financial

Total Equity & Liabilities

381.8

372.9

CASH FLOW HIGHLIGHTS

In €m

2020

2019

Change

Cash flow % of revenue

47.2 11.1%

48.6 11.6%

-3%

Tax payments

Change in WCR

Net cash provided by (used in) operating activities

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Net change in cash and cash equivalents

Opening cash and cash equivalents

24.1 19.4

Closing cash and cash equivalents

52.2 24.1

Dividend payments: €7.9m

Debt repayments: €6.6m

CASH AT BANK AND IN HAND + MARKETABLE SECURITIES = €52.5m

SHORT-TERM BANK FACILITIES AND OVERDRAFTS = €0.3m

CHANGES IN GROSS DEBT

In €m

Gross debt at 31/12/2019

12.8

Repayments in the period (6.7)

New debt 1.7

Gross debt at 31/12/2020 7.8

Cash at bank and in hand

52.5

Net cash at 31/12/2020

44.7

A COMFORTABLE CASH POSITION

A MARKET DRIVEN BY FACTORS OFFERING VISIBILITY

• • A need for digital transformation and investments in digital tools by customers accelerated by the crisis linked to the pandemic.

• • Customers are also concerned about the robustness of their IT systems, fuelling additional expenditures.

• • Key accounts are still trying to generate savings by outsourcing the scale up of their application assets to suppliers like Aubay.

• • The trend of cloud migration is accelerating and involves comprehensive (re)developments of applications.

• • IT is ultimately one strategic component and a major priority for key accounts.

2021 BEGAN FOR AUBAY WITH A HIGH LEVEL OF TRUST CAPITAL

• • Customer demand did not decline, but in contrast has tended to strengthen.

• • Needs for investments in digital transformation (SMACS) and scale up of application assets. Our balanced offering is perfectly adapted and efficient.

• • We are in an optimal operational situation, where all entities can concentrate on a single objective: growth.

• • We benefit from an enviable financial position with more than €40 million in net cash.

• • Political decisions involving partial or total lockdown in different countries are today without impact.

• • Working methods are now functioning smoothly, robust and efficient

2021… GOOD NEWS FOR THE START OF THE YEAR

• • The productivity rate is at a good level. Downtime between contracts for the beginning of the year is better than expected.

• • Recruitment trends are positive with the workforce is increasing at a slightly faster pace than we expected.

• • France is in an acceleration phase and has recovered its pre-crisis momentum.

• • The Price/Wages mix is under control. No pressure on prices to date with the exception of selected specific customers.

2021… TELEWORK IS A PRIORITY AND A SOURCE OF OPPORTUNITIES

• • Maintaining to the extent possible a rate for telework at 100% during the current period.

• • A smoother and faster recruitment process. Meetings through digital tools are more effective.

• • Certain areas still need improvement: onboarding of new employees/trainees, maintaining an Aubay culture.

• • Post-crisis, forecast for an average of 40% for telework, with significant differences according to country and, above all, the wishes of customers and employees.

• • No financial gains expected as the savings (premises, travel) will no doubt be offset by the investments. It is currently premature to offer forecasts on this subject.

OUR 2021 TARGETS

A good start for the year in all countries, strengthening our confidence in meeting our objectives which are both ambitious and realistic. Business is expected to gradually improve over the period.

The goal is to get back on track for organic growth and approach the lower limit of our medium-term objective which is between 5% and 7%.

The objective for the operating margin from ordinary activities is within the medium-term target, i.e. 9.5% to 10.5%.

REVENUE (€M)

€440m-€450m

OPERATING MARGIN FROM ORDINARY ACTIVITIES

9.5%-10.5%

20 -

INTERIM DIVIDEND / SHAREHOLDER STRUCTURE

ANNUAL DIVIDEND TRENDS

Regular increases since the beginning

0,70

0,60

In €

0,66

0,50

0,40

0,30

0,20

0,10

0,00

'10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

DIVIDEND

The Board of Directors has proposed a dividend of €0.66 per share, a 10% increase in relation to 2019. Subject to approval by the General Meeting and in light of an interim dividend of €0.33 paid in November 2020, the additional payment to be made in May will be €0.33.

SHAREHOLDER STRUCTURE AT 31/12/2020

% of Capital

% of Voting rights

Partners / Managers

46.02 61.02

Free float

53.92

38.98

Treasury shares

0.06 -

20 YEARS TO BUILD A DISTINCTIVE IDENTITY AND NAME RECOGNITION Today, Aubay is…

• ✓ The most important Digital Service Provider created since 1998

• ✓ A Pure Player in its two target markets:

  • • digital transformation & IT industrialisation

• ✓ A compact and legible organisation

  • • 1 country = 1 legal entity

  • • The same organisation, the same brand

• ✓ A stable management team, but with a successful track record in regularly integrating new talents

• ✓ A culture of growth, based on a balance of organic and external growth

  • • 30 acquisitions

• ✓ 6,562 employees, 92% of which are engineers or equivalent

• ✓ Exclusively Tier 1 customers

• ✓ A targeted geographical presence:

  • • in those markets where our customers are and are going

• ✓ Quality & proximity and determination

• ✓ A virtuous development strategy : ambition & prudence

AUBAY, A EUROPEAN DIGITAL SERVICE PROVIDER

• ▪ Created in 1998, listed on Euronext (SBF 250)

• ▪ 17 offices in 7 European countries

A strengthened European presence

Revenue by market
France	51%
Italy	25%
Spain / Portugal	20%
Belux	4%

Engineers and Consultants at 31/12/2020

Total = 6,562

• ▪ 46.2% of the capital held by managers

Group revenue (€m)

AUABAEY,UAROEPUERAONPEDAINGITCAULSTSOERMVEICREBPARSEOVIDER

2020 revenue by business sector (%)

The top 15 Group customers

Telecoms/ Media/ Gaming

BNP PARIBAS CREDIT AGRICOLE

ALLIANZ SANTANDER

AXA

BPCE SOCIETE GENERALE EUROPEAN INSTITUTIONS

TIM

ITALIAN POSTAL SERVICE

ORANGE

Bank/ FinanceInsurancePublic sectorIndustry / TransportServices/ UtilitiesE-commerce /

Retail

VODAFONE BANQUE DE FRANCE

SNCF INTESA SAN PAOLO

OUR DNA

A family-held growth company

A HANDS-ON MANAGEMENT TEAM...

Revenue growth (€m)

500

400

300

200

100

0

Trends for Op. profit for ordinary activities (€m)Dividends (€ '000s)

10000

5000

0

1998

1999

2000

2001

2002

A culture of GROWTH

Balancing internal growth with acquisitions

A culture of PROFITABILITY

A balance between Ambition and Caution (a capacity for adaptation)

A commitment to SHAREHOLDER RETURNS

2020

Dividend policy: approx. 30% of net income (annual increases since 2002),

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

…. CREATING GRADUAL GROWTH IN VALUE

A VIRTUOUS CIRCLE OF GROWTH

Shareholder returns

Gradually creating value	Improving margins	Acquiring marginally
&	and cash flow generation	profitable companies
&	though
Rapid integration under a	well-positioned
common banner	in their markets
Recent successful
acquisitions:

Recruiting highly qualified candidates

Master's degree or equivalent 43%

Engineering degree 41%

Bachelor's degree or equivalent 16%

+1,200 highly qualified candidates recruited in 2020

Relevant proposals Attractive customers

30 successfully integrated acquisitions

• • Quantic, France, 2019

• • Business assets,

  Italy, 2017

• • CastInfo, Spain, 2015

• • Norma4, Spain, 2014

• • Aedian, France, 2013

• • BSC, Italy, 2013

• • Adex, France, 2010

• • Selex Elsag, Italy, 2011

• • Projipe, France, 2006

• • WhyNot, France, 2005

INCOME STATEMENT AT 31/12/2020

(€ '000s)

31/12/2020

%

31/12/2019

%

Revenue

426,382

100%

417,757

100%

Other operating income Purchases used in production and external charges Staff costs Taxes other than on income Amortisation, depreciation and provisions Change in inventories of work in progress and finished goods Other current operating income and expenses	421 242 (86,216)(76,535) (287,855)(288,213) (3,702)(3,056) (7,628)(7,412) (187) 18
Operating profit from ordinary activities 41,215 9.7% 42,801 10.2%
Expenses linked to restricted share unit awards and similar share-based payments (1,112) (1,484)

Current operating profit

10.2%

40,103

9.4%

41,317

9.9%

Other operating income and expenses Operating profit

(1,463)

(1,464)

Income from cash and cash equivalents Net borrowing costs Other financial income and expenses Net financial income (expense) Tax Income from equity-accounted investees Net income before results of discontinued operations or assets held for sale Net income after tax of discontinued operations or assets held for sale

(588)(725) 169416 (419)(309) (12,036) 31% (13,135) 33% 26,185 26,409

Net income

38,640	9.1%	39,853	9.5%
33%
26,185	6.1%	26,409	6.3%

Attributable to shareholders Attributable to non-controlling interests

Basic weighted average number of shares Earnings per share

Diluted weighted average number of shares Diluted earnings per share

26,132	26,409
53	0
13,192,494	13,180,931
1.98	2.00
13,244,994	13,279,431
1.97	1.99

ASSETS (€ 000s)	31/12/2020	31/12/2019
Goodwill	131,305	131,412
Intangible assets	771	828
Property, plant and equipment	5,166	5,575
Right-of-use (ROU) assets	18,611	22,996
Equity-accounted investees	-
Other financial assets	2,263	2,661
Deferred tax assets	2,472	2,796
Other non-current assets	118	277
NON-CURRENT ASSETS	160,706	166,545
Inventories and work in progress	516	411
Contract assets	29,148	29,216
Trade receivables and related accounts	105,432	115,097
Other receivables and accruals	33,496	37,209
Marketable securities	579	1,056
Cash at bank and in hand	51,883	23,411
CURRENT ASSETS	221,054	206,400
TOTAL ASSETS	381,760	372,945

LIABILITIES (€ 000s)

31/12/2020

31/12/2019

Capital	6,604	6,597
Additional paid-in capital and consolidated reserves	170,016	151,164
Net income attributable to the Group	26,132	26,409
Shareholders' equity attributable to the Group	202,752	184,170
Attributable to non-controlling interests	144	91
SHAREHOLDERS' EQUITY	202,896	184,261
Borrowings and financial liabilities: non-current portion	3,913	5,697
Lease liabilities: non-current portion	13,756	17,823
Deferred tax liabilities	1	5
Provisions for contingencies and expenses	6,751	6,129
Other non-current liabilities	273	489
NON-CURRENT LIABILITIES	24,694	30,143
Borrowings and financial liabilities: current portion	3,907	7,124
Lease liabilities: current portion	5,240	5,435
Trade payables and related accounts	30,572	30,576
Other payables and accruals	18,319	115,406
CURRENT LIABILITIES	96,132	158,541

184,261

6,597 151,164 26,409

184,170

91

30,143

TOTAL EQUITY AND LIABILITIES 2020 results - Analyst Meeting

154,170

158,541 372,945

STATEMENT OF CONSOLIDATED CASH FLOWS AT 31/12/2020

(€ 000s)

31/12/2020

31/12/2019

Consolidated net income (including non-controlling interests) 26,185 26,409

Income from equity-accounted investees

Net exceptional depreciation, amortisation and provisions 6,346 6,587

Non-cash expenses and income relating to share-based payments 1,049 1,484 Other non-cash items 212

Dividend income

Gains and losses on disposals of fixed assets Cash flow after net interest expense and tax Net borrowing costs

Tax expense (including deferred taxes)

Cash flow before net interest expense and tax (A)

Income tax payments (B)

Change in operating working capital requirements (including liabilities relating to employee benefits) (C)

Net cash provided by (used in) operating activities (D) = (A+B+C)

Outflows for the acquisition of tangible and intangible fixed assets

998

(89) 24

34,790 34,685

593 730

11,849 13,135

47,232 48,550

(9,651) (15,382)

9,662 1,693

47,243 34,861

(1,023)

(1,938)

Inflows from the disposal of tangible and intangible fixed assets 0

Outflows for the acquisition of financial assets Inflows from the disposal of financial assets Change in loans and advances granted

Outflows (inflows) linked to business combinations net of cash acquired Dividends received

Net cash provided by (used in) investing activities Proceeds from capital increases

Amounts received upon the exercise of stock options Purchases of treasury shares for cancellation

Purchases of and proceeds from the sale of treasury shares Dividends paid in the period

Net dividends paid to parent company shareholders

Dividends paid to the non-controlling shareholders of consolidated companies Inflows from new borrowings

Repayment of debt Repayment of lease liabilities Net interest payments

The purchase of non-controlling interests (put options) Other financial flows

Net cash provided by (used in) financing activities (F)

Effects of changes in foreign exchange rates (G)

Change in net cash (D+E+F+G)

(7) 32

356 (70)

(6,768)

89

(674) (8,655)

(7,916) (8,703)

1,734

(6,631) (6,722)

(5,048) (5,316)

(595)

(731)

(18,456)

(21,472)

(31) 25

28,082 4,759

Cash and cash equivalents at the beginning of the year Cash and cash equivalents at year-end

52,213 24,131

24,131 19,372

CHANGE IN SHAREHOLDERS' EQUITY AT 31/12/2020

Additional paid-in Net incomeEquity

Non-Share capital capital and consolidated attributable to attributable to controllingreserves shareholdersTotalshareholdersinterests

Shareholders' equity at 1 January 2019

6,568 29

131,516

27,327

165,410 0 1,408

Increase and reduction in capital Share-based payments Dividends

Net income appropriation

Net income for the period Change in treasury shares Change in Group structure

Flows related to equity-accounted investments

Other changes

Other comprehensive income

(29)

1,408

(8,703)

• 27,327 (27,327)

  26,409

(4)

(69)

(282)

0

165,410 0 1,408

(8,703)

(8,703)

-

-

-26,409 26,409

(4)(4)

0 -

91 91

-

-(69) (69) (282)(282)

Shareholders' equity at 31 December 2019

Shareholders' equity at 1 January 2020

Increase and reduction in capital Share-based payments

Dividends

Net income appropriation Net income for the period Change in treasury shares Change in Group structure Other changes

Other comprehensive income

6,597 6,597 7

151,165 151,165

26,409 26,409

(7)

1,049

(7,916)

• 26,409 (26,409)

  26,132

(132)

(15)(536)

184,170 184,170 0 1,049

• 91 184,261

• 91 184,261

(7,916)

- 26,132

- 53

(132)

0

1,049

(7,916)

- 26,185

(132)

0 0

(15)(15)

(536) (536)

Shareholders' equity at 31 December 2020

6,604

170,017

26,132

202,752

144

202,896