FY20 results

Investors presentation

ESI Group

March 17th, 2021

External Use esi-group.com

Disclaimer

This document has been prepared by ESI GROUP (the "Company") and is for information purposes only.

The information and opinions contained in this document are provided as of the date of this document only and may be updated, supplemented, revised, verified or amended, and thus such information may be subject to significant changes. The Company is not under any obligation to update the information or opinions contained herein which are subject to change without prior notice.

The information contained in this document has not been subject to independent verification. No representation, warranty or undertaking, express or implied, is made as to the accuracy, completeness or appropriateness of the information and opinions contained in this document. The Company, its subsidiaries, its advisors and representatives accept no responsibility for and shall not be held liable for any loss or damage that may arise from the use of this document or the information or opinions contained herein.

This document contains certain forward-looking statements. These statements are not guarantees of the Company's future performance. These forward-looking statements relate to the Company's future prospects, developments and marketing strategy and are based on analyses of earnings forecasts and estimates of amounts not yet determinable. Forward-looking statements are subject to a variety of risks and uncertainties as they relate to future events and are dependent on circumstances that may or may not materialize in the future. Forward-looking statements cannot, under any circumstance, be construed as a guarantee of the Company's future performance and the Company's actual financial position, results and cash flow, as well as the trends in the sector in which the Company operates, may differ materially from those proposed or reflected in the forward-looking statements contained in this document. Even if the Company's financial position, results, cash-flows and developments in the sector in which the Company operates were to conform to the forward-looking statements contained in this document, such results or developments cannot be construed as a reliable indication of the Company's future results or developments.

Many of these risks, uncertainties, and factors are currently amplified by, and may continue to be amplified by, the COVID-19 pandemic.

The Company does not accept any obligation to update or to confirm projections or estimates made by analysts or to make public any correction to any prospective information in order to reflect an event or circumstance that may occur after the date of this document.

This document does not constitute an offer to sell or subscribe or a solicitation to purchase or subscribe for securities in France, the United States or any other jurisdiction. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption from registration thereunder. No public offering of securities may be conducted in France or abroad prior to the delivery by the French Autorité des Marchés Financiers (Financial Markets Authority) of a visa on a prospectus that complies with the provisions of Directive 2003/71/CE as amended.

Speakers

Cristel de Rouvray

Mike Salari

Olfa Zorgati

Emmanuel Leroy

CEO

C-COO Revenue Generation

CFO & Head of Operations

EVP Industry Solutions

Copyright © ESI Group, 2020. All rights reserved.

External Use

ESI's Vision / Mission

We envision a world where Industry can commit to bold OUTCOMES, addressing high stakes concerns - environmental impact, safety & comfort for consumers and workers, adaptable and sustainable business models

Providing reliable and customized SOLUTIONS anchored on predictive physics to allow industries to take the right decisions at the right time.

ESI - Our new corporate purpose

Boost human creativity

to drive industrial

performance to ever

higher levels

Corporate Social Responsibility

Customer & planet example

Emancipating from real prototypes - waste, energy and raw materials savings

2020 demonstrated the resiliency of ESI's business

Long-term relationships

"With this further development of the software suite, ESI Group has achieved a quantum leap in the field of simulations.

By being able to utilize a unique mathematical model for both crash and load testing, we're improving our development efficiency at several stages of a project. Given the ever-shortening development cycles in the automobile sector, this gives us a decisive competitive edge."

Dr. Ralph Sundermeier, Head of Functional Calculation Interior and Methods at Volkswagen

"Water impact has a destructive force that is more powerful than expected. In the worst-case scenario, if the strength of the underside of the vehicle body is inadequate and the quantity of splashed water is large, the impact could cause parts on the underside to fail." Turning to virtual testing, usingESI Virtual Performance Solution (VPS), they were able to study how water impact affects the vehicle bodyby simulating a crash into different obstacles.

Honda Engineering

"ESI Virtual Seat Solution was used to determine the exact position of an occupant settling into the seat. We also used the software to simulate the inflation of the bladders and to determine how the bladders could change the posture of the seated occupant. This information allowed us to place the multi-contour bladder positions appropriately in the seat."

Missy A. Pereny, Seat Comfort Manager Lear Corporation

"ESI VA One is an outstanding software product. However, the real success is provided in the proactive, flexible, timely and high-quality support of the ESI team from our first contact with the sales team to our contact with technical support."

Florian Ruess, Managing Director, Space Structures GmbH

The path to ESI's performance improvement is to leverage this foundation for improved

New Business & profitability

2020

Building a foundation for improved growth & profitability

Key figures

EBIT (adj.) decrease limited to -4.6 m€ vs -13.6 m€ decrease in revenue

(€m)

FY 2020

FY 2019

(Jan - Dec)

Change

Change cer

Revenue

132.6

146.2

-9.3%

-8.7%

Gross margin

98.7

107.4

-8.1%

-7.5%

%revenue

74.5%

73.4%

EBIT (adjusted*)

3.7

8.3

-55.7%

-55.0%

%revenue

2.8%

5.7%

EBIT

4.0

8.4

-52.0%

-55.0%

%revenue

3.1%

5.8%

Net result

1.4

n/a

n/a

%revenue

1.1%

n/a

n/a

Cash

22.5

20.2

11.0%

* Adjusted before IFRS 16

EBIT (adj.) per destination - Overview

132.6

-9.3%

98.7

Operating Costs : 95.1 m€ (-4.2%)

  • • Improvement of GM at 74.5% vs 73.4% in 2019

  • • Decrease of operating costs mostly due to S&M : lower marketing costs (digital events) & decreased travel expenses

1 1

EBIT (adj.) per nature - Overview

Decrease of all types of costs

€m

FY 2020

FY 2019 (JAN- DEC)

VARIATION

Amount

%revenue

Amount

%revenue

Amount

% Var

Revenue

132.6

146.2

-13.6

-9.3%

Expenses linked to revenue

-7.9

-6.0%

-9.0

-6.1%

1.1

-11.7%

Staff costs

-93.4

-70.5%

-95.9

-65.6%

2.5

-2.6%

Other costs

-27.6

-20.8%

-33.6

-23.0%

6.1

-18.1%

Total costs to EBIT (adj.)

128.9

137.9

-9.0

-6.6%

EBIT (adjusted)

3.7

2.8%

8.3

5.7%

-4.6

-55.8%

Cash position & Net financial debt

Good trend of financial indicators

Cash position

m€

FY20

FY19

Cash

22,5

20,2

Net financial debtGearing

Net financial debt/Equity

45

Incl. RCF

0,0

10,0

40

35

30

25

20

15

10

5

0

40

2018

2019

201820192020

35

30

25

20

15

10

5

0

2020

201920192020

2020

Net financial debt decreased in FY 20 by 4.5m€

Net financial debt bridge

31/12/2019

Cash position increase

External Use

Syndicated loan reimbursmentRevolving credit decreaseState guaranteed loan

CIR factoring decrease

Other

31/12/2020

Improving the Group's long-term profitability

Rationalization of some elements of the Group's cost structure

Facilities

Adapt to new ways of working

Simplification & synergiesGo digital

Align on ROI

Global structure

Events & travel

Software development

Q1 forward-looking statement

Revenues

€52m - €55m

vs €54.9m in 2020

These statements are subject to a number of risks and uncertainties, including those related to the COVID-19 virus and associated further economic and market disruptions; further adverse changes or fluctuations in the global economy; further adverse fluctuations in our industry, foreign exchange fluctuations, changes in the current global trade regulatory environment; fluctuations in customer demands and markets; fluctuations in demand for our products including orders from our large customers; cyber-attacks; expense overruns; and adverse effects of price changes or effective tax rates.

2021

A roadmap to align all Group efforts to accelerate revenue growth: focus on New Business

ESI - A reliable partner for helping customers make the right decision at the right time

Combination of services & licenses, predictive physics 48 years

Global company

Cross-industry with top-class customers

Committed company

On BFM Business - March 6th, 2021

Our approach to tackle customers challenges

Allowing industries to make the right decisions at the right time

4 industries of focus

Automotive &

Land transportation

Aerospace, Defense &

Heavy industry

Naval

4 customers targeted outcome

Pre-certification & validation

Human centric

Smart manufacturing

Energy

Pre-experience

Customized approach

Our sales motion

Execute reliably Globally & locally

Global account management

Local sales

2021, a focus on New Business

Global marketing programs to feed our new business pipeline

A program is a globally coordinated approach-to-market to increase New Business: Account-base Marketing, dedicated events, industry demonstrators to make it easier to sell

End-to-end Assembly Solution

Take the right decision at the right time

Customer Challenges / Stakes

ESI outcome :

  • CO2 emissions, EV, Lightweight

    • High accuracy virtual prototyping

  • Complexity : body variant, growing outsourcing rate

    • Multi-material / Multi-process assemblies

  • Assembly Process digitalization

  • End-to-end chaining of product development cycle

Product Design

Ensure feasibility of new design

Performances Engineering

Validate Performances as Manufactured

Manufacturing & Assembly

Ensure Assembly Quality

Industrialization / In Service

Improve Productivity

Assembly Operation Performances

Hybrid TwinTM of Assembly Line

Example

Filling customer's gap with more Predictive models for full vehicle safety as Manufactured

No ManufacturingWith Manufacturing

Influence

Influence

Upcoming events

April 29th

Feb 11th - April 29th

May 27th

June 22nd

Q1-FY21 sales

Webinar Series

Safe, Clean & Productive

Heavy Machinery

Webinar

Fatigue Simulation of Welded Structures

General Shareholders

Meeting

More events presented in our website:www.esi-group.com/company/events

Take away

Demonstrated resilience of our business model

Focus on New Business

Culture of transparency & execution

A committed company

Thank you

Any Questions?

Email:investors@esi-group.com

Copyright © ESI Group, 2020. All rights reserved.

External Use esi-group.com

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ESI Group SA published this content on 17 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 March 2021 16:52:04 UTC.