Annual Report 2011 - Aubay · Christophe Andrieux Joel Sanzot Paolo Riccardi Deputy General Manager...

Aubay l 2011 Annual Report – Extract I 1

Annual Report 2011 Extract


CONTENTS KEY FIGURES 3 AUBAY GROUP PRESENTATION 5 Management Team 6 Composition of the Board 7 Position, objectives and strategy 8 Share Trends 10 Services offer 11 Corporate Social Responsability 15

2011 BUSINESS REPORT 18 The market in 2011 19 2011 Business Report 19 External growth policy 20

MANAGEMENT REPORT (Extract) 21 Consolidated Data 22 Condensed annual financial statements 24

- Consolidated income statement 24

- Consolidated statement of financial position 25

- Statement of cash flow 26

GENERAL INFORMATION ON THE COMPANY AND THE CAPITAL 27 General Information 28 Information on the capital 28


KEY FIGURES Aubay is a consulting firm specialized in technologies and the integration of IT systems, industrial systems, networks and telecoms. In less than 10 years, the Group made a place for itself as a comprehensive player that is European in scope. Au 31 décembre 2011, la société comptait 2701 collaborateurs répartis dans 6 pays (France, Belgique, Luxembourg, Italie, Espagne et Portugal). At the end of FY 2011 there was a sequential acceleration in growth. For the first time ever the Group posted quarterly revenue of €50 million, representing 10.1% growth on Q4 2010. Demand from the Group’s main clients remained strong over the period, making it possible to increase market share primarily in Italy, France, Luxembourg and Portugal.

France posted a very strong performance with revenue growth of 15.1% (€118 million versus €102.5 million), including 5.2% organic, and saw its workforce expand to 1,509 from 1,419. International operations also performed well, with revenue of €67.6 million, up 8.9%, and a Group contribution of 36%. The workforce also grew, from 931 to 1,192. The Aubay Group thus hit a new milestone with a total workforce of 2,701, up from 2,350 at December 31, 2010. Having achieved a productivity ratio of 91.7% in the first half of 2011, it stood at 92.5% for the full-year, representing an increase from one six-month period to the next.


Aubay Share Trend (From January 1st

, 2009 until December 31st

2011)

Euronext, Segment C ISIN FR0000063737-AUB Reuters AUBT.PA Bloomberg AUB:FP


AUBAY GROUP PRESENTATION


Management Team

Corporate Center

Operational Management

Christophe Andrieux Joel Sanzot Paolo Riccardi

Deputy General Manager Manager General Manager France / Belgium Luxembourg Italy

Philippe Cornette João Bexiga Gérard Lucente

Deputy General Manager Manager General Manager France Portugal Spain

Christian Aubert

President David Fuks Vincent Gauthier

Philippe Rabasse Deputy General Manager Deputy General Manager General Manager Financial Affairs Legal Affairs


Composition of the board of directors At December 31, 2011, AUBAY’s Board of Directors was made up of the following members:

Member’s first and last names or company name

Date of appointment (or origin of mandate)

Term expiry date

Main position in the Company

Autres Mandats exercés dans le groupe en 2011

Mandats exercés au cours des cinq dernières années, hors groupe

M. Christian

AUBERT May 14,2009

Year-end

2014

Chairman of the

Board of Directors

Representative of

Aubay SA on the

Board of Aubay Isalia

Director of Auplata SAS

Chairman and Director of GCCCM SA (to February

2011)

Director of Gold by Gold (since October 2011)

M. Philippe

RABASSE May 12,2010

Year-end

2015

Chief Executive

Officer

Member of the

Board of Aubay Isalia

Manager of Capitalinvest SNC (to March 2009)

Director of Adex SA (to July 2010)

M. Christophe

ANDRIEUX May 14,2009

Year-end

2014

Deputy Chief

Executive Officer

Managing Director of

Aubay Luxembourg

Representative of

the Belgian branch of

Aubay Luxembourg


Director of Adex SA (to July 2010)

M. Modeste

ENTRECANALES May 12,2010

Year-end

2015 Director None

Chief Executive Officer and Member of the Board

of Directors of Steria Iberica (to 2007)

Chairman and Chief Executive Officer of Editorial

BookandYou.com

M. Patrick

GRUMELART May 14,2009

Year-end

2014 Director None

Chairman of the Board of Sopromec

Participations (to 2011)

Member of the Board of Sopromec Participations

Manager of Charpath S.A.R.L

Member of the Board of Promélys Participations

M. Philippe

CORNETTE May 14,2009

Year-end

2014

Deputy Chief

Executive Officer

Director and Chief

Executive Officer of

Adex SA

Manager of SCP Peignot/Cornette (to 2007)

Manager of Etablissements Cornette S.A.R.L

M. Vincent

GAUTHIER May 10,2007

Year-end

2012

Deputy Chief

Executive Officer in

charge og Legal

Affairs

Member of the

Board of Aubay RT

Director of YCIMN SA (to 2008)


M. David FUKS May 10,2007 Year-end

2012

Deputy Chief

Executive Officer in

charge for Financial

Affairs

None None

M. Paolo RICCARDI May 10,2007 Year-end

2012 Director

Chairman of Aubay

RT None

No member of the Board of Directors has held any important corporate office within Aubay over the past five years other than the offices held and listed above. As far as the Company is aware, no member of the Company’s management or supervisory bodies has been convicted of fraud over the past five years, been charged with any offence and/or had any official public sanction taken against them, or been implicated in any bankruptcy, receivership or liquidation as per Chapter 14.1 of Annex 1 to European Regulation no. 809/2004. As far as the Company is aware, there is no conflict of interest involving any corporate officer that could have an adverse effect on the Company.


Position, objectives & strategy of the Group

A comprehensive international player Aubay is a consulting firm specialized in technologies and the integration of IT systems, industrial systems, networks and telecoms. In less than 10 years, the Group made a place for itself as a comprehensive player that is European in scope. Au 31 décembre 2011, la société comptait 2701 collaborateurs répartis dans 6 pays (France, Belgique, Luxembourg, Italie, Espagne et Portugal).

Closeness and know-how : more than assets, a positioning

Aubay is present among the major players in the Banking/Finance, Insurance, Industry, Energy, Transport and Telecom sectors and is technically and functionally capable of undertaking interventions in all these fields. It stands out from the competition by offering its customers a local presence and know-how with strong added technological value.

Over the years, Aubay’s service offer has changed with the needs of its customers and transformations in the market. The Group has its greatest success with its TPAM (Third-Party Application Maintenance) offers and Service Centers. Combined with its local low-cost/Nearshore development platform (in Spain, Portugal and Italy), this product mix has placed Aubay among the top 10 suppliers for its largest customers.

Beyond its size and know-how, Aubay has always stressed its close relationships with its customers. Listening to their needs, flexibility in applying solutions, regular contacts and quality controls also make up a large part of the Group’s strength. When larger players abandon the European markets, smaller ones do not have the capacity to handle ambitious projects for key customers, positioning Aubay as a reference alternative in the market.

Internal growth: a real challenge

In 2011, Aubay generally saw sales stabilize at a high level across all business sectors except for Finance, which was marked by significant instability and project disruption. Thus, despite an uncertain economic climate that dictated prudence, the Aubay Group did not see any change in attitude amongst its main clients. Although the trend is towards streamlining expenditure, the project pipeline remained strong.

In order to respond to the strong demand and to fully capture all this business, Aubay focused on hiring and was able to take growth opportunities (further acquisition in Italy in July 2011).

What is clear, however, is that the Group’s development will above all be driven by organic growth, whether growing the Group’s business in Spain which, despite an economic downturn, showed some signs of rising demand, re-energizing the Belgium/Luxembourg region or further accelerating growth in France and Italy.

In 2012, Aubay plans to concentrate much of its efforts on hiring and will continue to look out for strong acquisition targets in light of the sustained growth seen early this year.

Quality and innovation: vital values to success

Awarded OSEO Innovation’s “Innovative Business” label for its research and development activities in the Open Source field, Aubay also has ISO 9001 v2000 certification for its project activities and is in the process of obtaining CMMI 3 certification.

This quest for recognition through modern indicators demonstrates the company’s ambition to pursue its growth, notably based on its founding values. These are expressed through the attention given to its employees (local management, in-house training, career management, etc.), to its customers (service commitments, quality guarantees, commercial intelligence, etc.), to its partners and to the state of the art (publications, seminars, etc.).


European presence and Key Accounts Aubay is currently located in France (Paris, Nantes), Spain (Madrid, Valladolid, Malaga), Belux (Brussels, Naninne, Luxembourg), Italy (Milan, Rome) and Portugal (Lisbon).

Today, all the Group’s customers – banks, insurance companies and telecommunications operators – have resolutely European strategies. These strategies are based on the search for technological service providers capable of providing them with support in their development outside their borders.

With its European presence, Aubay is now able to stand with its customers in their international growth. Whether providing support for our customers locally or helping them to develop low-cost projects (Nearshore), many of our customers in the Banking and Insurance world have placed their trust in us for many years.

A perfect understanding of the local cultures in the countries where Aubay head offices are set up provides the Group with decisive added value to meet the demands and requirements of its customers in their own development strategies in Europe.

Thanks to the quality of the relations the Group has forged with its customers, its commercial relations have a long-term outlook and it can capitalize on the areas of expertise it is developing.

Aubay’s customers are exclusively European key accounts whose needs in terms of adaptation to new technologies are as great as they are strategic. This is the only clientele that has both the desire and the capability of investing massively in new technologies by repeatedly calling upon the skills of a Group like Aubay.

The number of active customers (understood as being a customer invoiced at least once during the year for a total of at least €50,000) reached 203 at the end of 2011, representing more than 99% of the turnover for the year. This clearly testifies to the Group’s ability to convince them to take advantage of its skills to manage the most complex IT problems.

Together, the top ten customers account for 58% of total sales.

List of the group’s ten largest customers:

1 BNP Paribas

2 Crédit Agricole

3 Société Générale

4 France Telecom

5 AXA

6 ALLIANZ

7 Groupe BPCE

8 Institutions Européennes

9 Poste Italiane

10 Amadeus

Strategic Partner To stay at the top and to provide the best possible advice to its customers, it has always appeared indispensable to Aubay to work with the

top names in each category. Aubay has forged strategic technological partnerships, notably with Adobe, IBM, Sybase and Oracle.

These partnerships are not exclusive so as to guarantee total independence and to optimize the advice given to Aubay’s customers.

When they are formalized, they usually run for one year and are renewable, but most of the time they are not formalized and therefore

run for indefinite periods. If any one of these partnerships was to break down, it would not have any significant financial effect on the

Company.


Share capital (ISIN FR0000063737-AUB, Reuters AUBT.PA, Bloomberg AUB:FP)

On 31 December 2011, the share capital amounted to €7.011.802,0 divided into 14.023.604 shares with a nominal value of€ 0,50 each, fully subscribed and paid, all in the same category .

Aubay share trends

The Aubay stock price once again rode the financial market roller coaster in 2011. In fact, despite a sound operational performance throughout the year, the stock had a very mixed performance between the two halves. Following a sharp rise in the stock price in the first half, when it rose from €5.08 on January 1 to close at €6.80 on June 30, 2011, the stock closed at €4.62 on December 31, 2011.

Over the year, some 4 million shares were traded for a total of circa €24 million.


Aubay Group Services Offer

Aubay, the ideal partner With more than 2,700 employees, Aubay has become the Ideal Partner for its customers to handle all issues concerning their IT systems.

The Ideal Partner, because Aubay has a complete, international product offer covering all its customers’ needs, from Consulting missions to

setting up a dedicated service center, not to mention delegating skills in the context of our Technical Assistance offer.

The Ideal Partner because Aubay has the twofold technical and sectoral skills necessary for overseeing its customers’ projects through to

success. These skills are at the heart of the Group’s strategy and know-how, and are capitalized on at our centers of expertise. They notably

enable our customers to take advantage of the resources and skills that are best suited to their needs.

The Ideal Partner because Aubay’s teams are always open, responsive and flexible, able to adapt to the customer’s needs to define the

best working environment, whether in terms of operational aspects or contractual and financial aspects.

Consultancy The complexity of IT systems, the multiplicity of applications that are critical to companies and the rapid development of technology reinforce the importance of the Consultancy professions and the need for a real long-term relationship.

Aubay consultants’ mission is to provide our key customers with the best possible support in their search for upgradability, effectiveness and performances for their IT systems.

Our cutting-edge knowledge of all technologies and the specificities of each sector enable our teams to build the best system in keeping with the objectives of each company.

Our teams of consultants can count on all the know-how and skills at Aubay. This expertise gives rise to regular training sessions and periodical publications in White Papers.

Our independence from all suppliers is an essential factor in our performances. It ensures choices of solutions for our customers that are well suited and judicious.

We cover a wide range of missions, a few examples of which are worth pointing out:

For a major bank, managing the IT system upgrade for its payment facilities and adapting it to the new SEPA practices, and the definition and implementation of a risk management system;

For a large operator, the definition of upgrade possibilities for a new paperless billing platform;

For a Ministry, the audit of a new management solution for real estate assets.


Standardized Offers In response to the challenges of globalization, budget control and quality of service, Aubay has a set of standardized offers that can be modulated and adapted to the specificities of each customer.

The competitiveness of our offers is based on:

Pooling skills and resources;

Continuous quality improvement;

Capitalization and implementation of the best practices;

Tight management of business variations;

Foreseeing and controlling risks;

Software tools adapted to the context.

Aubay’s standardized offer covers the following services:

Skills center: development and integration service center dedicated to one or more projects;

TMA: maintenance and optimization of application assets;

TSA: application support/user support dedicated to application assets;

TRA: tests and acceptance procedures for applications;

TEX: facilities management for operations and infrastructures;

Package: managing a project with a commitment to results.

AUBAY handles the question of location or relocation using a network of service centers. All the processes comprising our offers are formalized in reference to the ISO 9001/2000, ITIL, SIX SIGMA and CMMI standards.

Innovation and capitalization are also at the heart of our concerns, with the development and implementation of specific tools for each field. The Acube toolbox in the open source domain was one factor behind Aubay’s receiving the Oseo Innovation “Innovative Business” label.

Outsourced R&D Aubay’s R&D combines our skills in consulting and engineering for technologies.

Aubay’s R&D works in the sectors of defense, aeronautics and space, energy, telecommunications, transport and rail, as well as in most other industrial sectors.

Aubay’s R&D provides support to its customers for studying and implementing their outsourced research and development projects and their industrial systems.

Our teams’ technical expertise mainly covers:

industrial data processing and real-time embedded systems;

application and distribution IT systems;

technical and scientific engineering;

complete testing and measurement systems;

digital and analog electronics;

Telecommunications and multimedia broadcast systems.

Our centers of expertise

Our position as a global player means that we must have a mastery of most technologies and be able to propose their most effective implementation for our customers’ needs and constraints.

Aubay’s teams make sure that they make the most of each technology while taking existing assets into account: they have expertise in fields ranging from IBM Mainframes for processing large volumes of data to ICTs and Decision/Business Intelligence for sharing and

http://ns2014414.ovh.net/~devaubay/aubay/index.php?id=90







restituting data through multiple channels such as the Internet, telephone platforms, SMSs, as well as client-server architecture, departmental systems and more specialized fields such as Desktop Publishing.

Aubay has also developed lines of excellence for system and network infrastructures to ensure architecture definition, system administration, project integration and operations oversight.

Thanks to continuing training for the company’s human resources who are grouped by center of expertise, Aubay accompanies its employees toward the most sophisticated state of the art through a constant technology watch and capitalizing on know-how.

Combining all these forms of expertise within homogenous project teams is a guarantee of access to the best practices in the market for our customers.

Aubay Services Centers Because guaranteed quality, responsiveness and cost optimization are at the heart of our customers’ concerns, Aubay has developed a Service Center offer to standardize services by pooling technical and functional resources within a single specialized, upgradable structure.

Located on the customer’s premises or at one of the Aubay sites in Europe, two Aubay Service Center models are available:

Dedicated Service Center: the technical platform, the premises and all the resources are dedicated to a single customer. The quality approach used is usually the customer’s.

Pooled Service Center: the resources, technical platforms, tools and quality processes are pooled for a group of customers.

Combined with these models, Aubay’s standardized offers represent a strong commitment to the customer to meet the need of service relocation with a commitment to results.

This industrial logic also enables businesses to benefit from a supervisory structure specialized in production management and risk management, and to control the quality of service using relevant indicators and specific scorecards.


The choice of locations for Aubay Service Centers was finely studied and responds to the necessary criteria for successful relocation:

A dense network of experienced resources available on the local job market.

Possibility of working in the customer’s language;

Team stability;

Possibility of forging ties with universities;

Fast, easy access to the Nearshore service center. The Aubay Services Centers network:

France: Paris (380 people), Nantes (80 people)

Spain: Valladolid (80 people)

Portugal: Lisbon (30 people)

Italy: Reggio Calabria (30 people)


Corporate Social Responsability Since its founding in 1997, Aubay has always had a strong concern for the quality of its services, its customers’ satisfaction and its employees’ skills by being socially and environmentally responsible.

Aubay’s quality policy Bureau Veritas, the world leader in assessment and certification services, has certified that Aubay’s quality management complies with the ISO 9001:2008 standard for:

Coordination, Engineering, Qualification and Maintenance of Software Projects; Coordination of technology consulting and IT system integration

Aubay’s fundamental values can be seen every day in its professional responses that are organized in keeping with its quality policy:

Understanding needs Getting the players involved Gathering improvements Describing activities

Fulfilling commitments Planning beforehand Dealing with deviations Applying directives

High-performance resources Supplying professional resources Assigning responsibilities clearly Training and informing players

Relevant deliverables Coordinating with the plan Managing configurations Assessing conformity

Aubay is working on a program of constant improvement to its services with two targeted objectives:

Completing at the very least a CMMI maturity level 2 assessment beneficial to software development activities and other IT services;

As a partner with SEI, completing the general deployment of CMMI practices at the service centers and in technical assistance.

Aubay & the United Nations Global Compact Commitments have been made in the areas of vocational training, the environment and measures in favor of the disabled in the workplace.

Regular verifications are performed on the fulfillment of these commitments.

As part of the commitments entered into and pursued as a signatory to the Global Compact, in 2007 Aubay began a Handicap Mission,

governed at present by a company-wide agreement entered into in December 2011, for a period of three years and in 2009, an initiative to

combat stress.

This more recent commitment is just one example of our passion for and promotion of the sustainable development values signed up to in

the Global Compact:

2007: Implementation of a mass training policy for our employees using e-Learning.

2008: Measurement of natural resource consumption to set up an effective action plan in favor of the environment.

2009: Initiative to hire, integrate and retain employees with disabilities (Agreement with Agefiph)

2010: Aubay sites are equipped with videoconferencing equipment (after an analysis of the modes of transportation used by the personnel).

2011: Initiative to combat stress, put in place within the company to assess, prevent and reduce psycho-social risks and stress in the workplace.


Structurally, the quality improvement approach at Aubay is a commitment to stricter standards affecting a wider scope and range of

products:

2009: Our quality system reached the ISO 9001: 2008 level, adding TPAM offers to the initially certified scope of our packages.

2010: Extension of the certified scope to controlled technical assistance.

2011: CMMI initiative to achieve maturity level 2 for a significant portion of our service centers.

Lastly, Aubay ensure its subcontractors are committed to sustainable development and quality assurance:

during our annual referencing procedures, they are asked to sign a charter to ensure compliance with the principles laid down in the Global Compact;

calling on external services is always an opportunity to draw up and apply quality plans that include the demands of our quality system.

The objectives pursued and the measures taken to achieve them are summarized below:

No. Guiding Principles Measures

1 Businesses should support and respect the protection of internationally proclaimed human rights.

Aubay supports its employees’ initiatives for providing assistance to people with difficulties and measures to overcome disabilities or the loss of autonomy. More generally, Aubay encourages responsible behavior that protects Human Rights.

2 Businesses should make sure that they are not complicit in human rights abuses.

Aubay mobilizes players (private individuals and public entities) who intervene under its influence to prevent the risks of abuses and, if necessary, to reestablish ethical behaviors.

3

Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining.

Aubay complies with the law in this area: existence of a Works Council and staff representatives; establishment of and compliance with election protocols; collective bargaining practices, etc.

4 The elimination of all forms of forced and compulsory labor.

Aubay introduces an initiative to assess, prevent and reduce psycho-social risks and stress in the workplace.

5 The effective abolition of child labor.

Aubay does not currently work in geographical areas confronted with these types of problems.

6 The elimination of discrimination in respect of employment and occupation.

The Human Resources Department works in compliance with the law to distribute a social report including indicators on equal opportunity (men/women) and on recruitment (diversity of origins – Aubay has representatives from all origins making up the reality of French life, i.e. people from sub-Saharan Africa, North Africa, Asia, Eastern Europe, the Middle East, etc.).

The e-learning training objective using Skillsoft has been achieved and accredits the resolution taken in 2007 with the Global Compact. Furthermore, in-house training sessions have been widely organized: project and quality, acceptance tools, languages, operating systems, new technologies, etc.

7 Businesses should support a precautionary approach to environmental challenges.

Aubay, with its consultancy activity, consumes few natural resources. Special attention is paid to saving paper. There is a constant focus on reducing employee travel by giving them local missions. Aubay also supports this approach with a policy of encouraging its employees to take public transportation.

8 Undertake initiatives to promote greater environmental responsibility

Aubay is extending its policy of exemplarity in this area, measuring its resource consumption since 2007.

9 Encourage the development and diffusion of environmentally friendly technologies.

Aubay’s product offering policy with its customers complies with Principle 9 of the Global Compact: encouraging the development and diffusion of environmentally friendly technologies. These offers include:

- Acube, built on the new programming standards (Java, Ajax, Web 2.0) reduces financial efforts (free open-source license acquisition) and the deployment of paying resources in emerging countries (minimal coding for easy maintenance with limited expertise, only low-bandwidth telecom links available);

- Content management (web site construction): encouraging remote collective work and mobility, while reducing travel;

- Paperless invoicing with its impact on the overcutting of forests.

10

Aubay’s work is based solely on its technological excellence and its effectiveness in winning contracts with its customers, using only legal, honest practices and methods.

Aubay’s work is based solely on its technological excellence and its effectiveness in winning contracts with its customers, using only legal, honest practices and methods.


The Handicap Mission in France As part of its Corporate Social Responsibility, Aubay has for a number of years had an equal opportunities policy, in particular via its Handicap Mission. Following on from the agreement signed with AGEFIPH in 2009, in December 2011 Aubay France signed a company-wide agreement to encourage the hiring of people with disabilities. Entered into with three unions and following approval by the Regional Enterprise, Competition, Consumption, Labor and Employment Directorate (DIRECCTE), this agreement came into force on January 1, 2012 for a period of three years.

This new agreement reflects the company’s desire to strengthen its social responsibility and thereby increase the efforts made to, amongst other things, hire, integrate and retain employees with disabilities.

This company-wide agreement sets out five key priorities: Inform and raise awareness internally and outside the company via a range of communications programs (posters, leaflets,

guides, etc.) Stimulate hiring through greater participation in student forums and jobs fairs. Support and train internal stakeholders in order to optimize the integration of new employees with disabilities: new managers,

HR managers and sales reps. Increase use of services offered by disability-friendly companies. Support and promote sporting and cultural initiatives by participating in events organized by associations helping people with

disabilities.

In order to optimize the onboarding and monitoring of employees with disabilities, Aubay furthermore offers a whole series of assistance and support measures tailored to each situation (job, disability, family circumstances, etc.), in particular as regards working time, workstation layout, accessibility and administrative procedures.


2011 BUSINESS REPORT (Extract)


The Company’s Board of Directors met on March 21, 2012, meeting chaired by Mr. Christian Aubert, to review the consolidated financial statements for the year ended December 31, 2011.

The market in 2011 For 2011, Syntec Numérique has confirmed sector growth of +2.7% in Europe.

FY 2011 saw sales stabilize at a high level throughout the market. While the number of calls for tenders, all business sectors combined, remained substantial, indicators show a lengthening of decision-making cycles and some project postponements. The macro-economic climate did not bring a halt to IT investments. It nevertheless generally gave rise to increased cautiousness and forward-planning within IT Departments. They thus confirmed their desire to intensify efforts and the number of projects while streamlining expenditure. Price increases (+1%) only played a modest part in the sector’s growth in 2011.

France is the country driving the European average with growth of +3.6%, including +2.7% in the IT Consulting & Services segment. Business was very brisk in this region in the first half. Despite a deterioration in the economic climate in Q3, sales remained sustained. Uncertainty led to a slight fall-off in Q4. The growth in the IT Consultancy & Services segment was primarily driven by facilities management (infrastructure and applications).

Outlook for 2012

Following a mixed 2011, Syntec Numérique has a number of reservations regarding 2012 and is forecasting modest sector growth of circa +1%, including +0.9% in the IT Consultancy and Services segment. The indicator is positive on the back of the high level of sales and the stabilization of order books. It is nevertheless dragged down by price pressures and the lengthening of decision-making cycles.

Market opportunities are anticipated in innovative projects (mobility, e-health, electronic payment, etc.). Business sectors identified as promising are Transportation (aeronautics and aerospace) and Services & Utilities. The Banking and Insurance sectors are expected to see flat sales. The Manufacturing sector and the Public Sector are expected to be the least dynamic over the coming months.

Group activity in 2011

At the end of 2011 there was a sequential acceleration in growth. For the first time ever the Group posted quarterly revenue of €50 million, representing 10.1% growth on Q4 2010. Demand from the Group’s main clients remained strong over the period, making it possible to increase market share primarily in Italy, France, Luxembourg and Portugal.

Annual revenue totaled €185.6 million, up a sharp +12.8%, although slightly lower than the Group’s initial target as a result of the postponed consolidation of part of the Italian business from July 1 to November 1 (-€1 million) and weaker than anticipated hiring in what was still a competitive market. The productivity ratio was very strong in Q4 at circa 94%, and 92.5% over the full-year.

As of December 31, 2011, the total workforce stood at 2,701 compared to 2,350 as of December 31, 2010, a net increase of 350 employees. Excluding the 150 employees joining following the acquisition of the Italian business, the net increase was 200 employees, which, despite the slight postponement, represents the strongest annual hiring drive since the Group was founded.

The very strong sales in Q4 generated an annual current operating margin of 8.2%, up on 2010 (7.7%), and annual current operating income of €15.3 million.

France With revenue of €118.0 million (up 15.1%), operations in France now account for over 64% of the Group total. This strong performance was in part due to what proved to be strong demand throughout the year, across all sectors. Aubay’s services in the Banking and Insurance sectors and in outsourced R&D also met with great success.


In this region, the workforce stood at 1,509 as of December 31, 2011, compared to 1,419 the previous year, representing an increase of +6.3%. The productivity ratio of 91.4% in 2011 helped improve the current operating margin, which stood at 9.3% at end-2011, compared to 8.9% at end-2010. In 2012, the Group’s main challenge, assuming an unchanged market, will be its ability to hire in France.

International Outside France, Aubay posted annual revenue of €67.6 million, up 8.9%. As expected, the strong growth of the Italian operations marked this region as one of the Group’s main drivers. Italy in fact pushed forward with and accelerated a sustainable return to double-digit growth from the first quarter by signing major contracts with strategic clients. In July 2011, Aubay acquired the banking operations of SELEX Elsag (Finmeccanica Group) in Italy. In line with the Group’s development strategy, this transaction enabled Aubay to strength its positioning and market share in Italy, in the banking sector and vis-à-vis numerous new clients. Although excellent, the Group’s productivity ratio outside France (94.1%) was not sufficient to offset the performance of the Belgium/Luxembourg region, which had a challenging year on the back of falling demand, most particularly in Belgium. In that country, Aubay saw revenue decline on the back of the planned end to the contract with the Belgian Federal Police Force, the impact on margins of which was nevertheless brought under control between April and October 2011. In 2012, the main challenge facing Aubay will be to return to growth in this region, all the more complicated since the base effect will be unfavorable. Despite an extremely challenging economic climate, Aubay managed to stabilize the Spain/Portugal region and even managed to grow in Portugal. With the first signs of recovery seen in Spain, Aubay hopes to take advantage of as many opportunities as possible and thereby speed up its growth.

External growth policy From the outset, Aubay has pursued a targeted, opportunistic acquisitions policy to speed its growth in markets deemed strategic and take

advantage of its ability to fund acquisitions.

FY 2011 provided Aubay with an opportunity to strengthen its presence in the Italian market through the acquisition of the banking

operations of SELEX Elsag (Finmeccanica Group) on attractive financial terms.

Aubay continues to look for takeover targets, with the same requirement for a combination of strategic appeal and an attractive price.


MANAGEMENT REPORT (Extract)


Consolidated data

For the year ending 12/31 (in € thousands) 2011 2010 2009

Revenue 185 566 164 605 147 245

Current operating income 15 282 12 689 8 776

As a % of the revenue %TR 8,2% 7,7% 6,0%

Net income 7 888 6 322 3 912

Group net income 7 736 6 275 3 984

Net earnings per share € 0,55 0,45 0,29

Shereholder’s equity including minority interests 87 814 80 898 75 928

Cash flow before financing costs and taxes 14 633 11 609 8 392

Non-current assets 84 746 78 434 71 225

Financial debt (1 846) 1 285 (1 325)

Net cash K€ 14 785 13 897 9 580

Balance sheet total K€ 173 196 147 015 131 862

Income statement

Aubay posted 2011 revenue of €185.6 million compared to €164.6 million the previous year, an increase of 12.7%. The end of the year saw a sequential acceleration in growth. For the first time the Group posted €50 million in revenue in a single quarter.

Revenue in €M 2011 2010 Variation

1st

quarter 46.7 38.9 +20.1%

2nd

quarter 44.2 38.7 +14.2%

3rd

quarter 44.6 41.6 +7.1%

4th

quarter 50.1 45.4 +10.1%

Total 185.6 164.6 +12.8%

The operating margin continued to improve, rising to 8.2% from 7.7%, and for the second half alone it stood at 9.0% compared to 7.5% in

the first half. In absolute terms, annual current operating income totaled €15.3 million, up 20.4% from €12.7 million in 2010. The

improvement stemmed from a 0.2 percentage-point improvement in gross margin and a 0.3 percentage-point reduction in overheads. Operating expenses totaled €171.3 million. Personnel costs amounted to €128.6 million, up 14.4% and representing 69.3% of revenue

versus 68.3% in 2010. Other expenses broke down as follows: Purchases consumed and external expenses for €39.7 million;

Taxes for €2.2 million;

Expenses for amortizations and provisions for €0.9 million. The balance of other operating income and expenses was €-0.2 million, mainly comprising €0.7 million in non-recurring expenses, +€0.9

million in gains on the disposal of assets, and €0.4 million in stock option/free share expenses.

Operating income thus stood at €15.1 million (8.1% of revenue) compared to €11.4 million (7.0% of revenue) in 2010.

Net financial income was a €-1.0 million charge, compared to €-0.3 million. Corporate income tax amounted to €6.3 million, mainly consisting of current income tax of €6.7 million (including €2.4 million for the CVAE

[French levy on corporate added value] and IRAP [Italian regional tax on productive activities] and €1.0 million relating to a tax dispute).

€0.4 million in deferred tax assets were booked, primarily from the recognition of tax loss carryforwards. The quoted tax rate stood at 44%

for the year.

Net income – Group share stood at €7.7 million compared to €6.3 million in 2010, a 23.3% increase.

Balance sheet

Total assets in the balance sheet at end-2011 stood at €172.1 million compared to €147.0 million in 2010. The main items were as follows:


Assets

Non-current assets totaled €84.7 million, an increase of €6.3 million. The main change stemmed from the consolidation of the Italian business for €5.6 million. There was no change in goodwill in 2011, which stood at €64.5 million.

Following the disposal of shares in Octo Technology during the year, reducing the holding from 21.9% to 9.1%, it was reclassified from “shares accounted for under the equity method” to “other financial assets” reflecting the loss of significant influence. The securities were measured at fair value at December 31, 2011.

Deferred tax assets totaled €1.6 million and primarily comprised €1.3 million in tax loss carryforwards at Aubay Spain and Adex Ingénierie.

Customer accounts receivable amounted to €65.0 million compared to €48.8 million the previous year, reflecting the growth in revenue. The DSO also rose to 97 days compared to 83 days at end-2010.

Free cash was up at €15.2 million compared to €14.3 million at end-2010.

Liabilities

Shareholders’ equity stood at €86.7 million, up €5.8 million, mainly as a result of:

2011 retained earnings of €7.7 million;

the payment of the 2010 dividend for €2.0 million, and a €1.1 million interim dividend for 2011;

share capital increases resulting from the exercise of stock options, bonus shares, as well as a program reserved for employees and share-based payments totaling €0.8 million.

Gross borrowings stood at €17.1 million compared to €13.1 million. The net debt position was €1.8 million.

As regards cash flow, cash flow before financing costs and taxes stood at €14.6 million compared to €11.6 million, an increase of 26%. Net of taxes and the change in working capital requirements, cash flow from operating activities totaled €4.6 million. €6.4 million was spent on intangible assets and property, plant and equipment (including the Italian business), partly offset by €2.6 million in proceeds from the disposal of investments. Cash flow from investment activities thus stood at €-3.6 million. Cash flow from financing activities totaled €-72,000. This was mainly comprised of a dividend payment of €3.1 million (including €1.1 million for the 2011 interim dividend), the taking out of a new €5.3 million loan, the repayment of €1.5 million in borrowings, and, lastly, €0.9 million in interest paid.


Condensed annual financial statements Consolidated income statement at december 31, 2011

(in € thousands) 31/12/2011 % 31/12/2010 % 31/12/2009 %

Revenue 185 566 100% 164 605 100% 147 245 100%

Other operating revenue 178 322 248

Purchases (39 673) (37 957) (35 273)

Payroll expenses (128 571) (112 387) (100 867)

Taxes (2 157) (1 812) (2 627)

Amortization/depreciation allowances ans provisions

(932) (856) (879)

Change in inventories of work in progress and finished goods

- - -

Other operating income and expenses 871 774 929

Current operating income 15 282 8,2% 12 689 7,7% 8 776 6,0%

Other operating income and expenses (171) (1 242) (793)

Operating income 15 111 8,1% 11 447 7,0% 7 983 5,4%

Cash and cash equivalents - - -

Cost of net debt (922) (592) (1 252)

Other financial income and expenses (36) 332 (41)

Financial income (958) (260) (1 293)

Tax expenses * (6 265) 44% (5 257) 47%* (3 121) 47%*

Share in net income of companies accounted for by the equity method

- 392 343

Net income before income from divestments or disposals in progress

7 888 6 322 3 912

Net income from divestments or disposals in progress

- - -

Net income 7 888 4,3% 6 322 3,8% 3 912 2,7%

Group share 7 736 6 275 3 984

Minority interests 152 47 (72)

Earnings per share 0,55 0,45 0,29

Diluted earnings per share 0,54 0,44 0,31

* **


Consolidated statement of financial position

at december 31, 2011

ASSETS (in € thousands) 31/12/2011 31/12/2010 31/12/2009

Goodwill 64 511 64 511 59 579

Intangible fixed assets 14 135 8 238 5 970

Tangible fixed assets 2 010 1 634 1 466

Securities under the equity method - 2 304 2 805

Other financial assets 2 456 476 438

Deferred tax assets 1 565 1 207 903

Other non-current assets 69 64 64

NON-CURRENT ASSETS 84 746 78 434 71 225

Inventories 4 11 10

Accounts receivable 65 013 48 822 44 383

Other receivables and accruals 7 061 5 358 5 996

Investment securities 648 349 1 956

Cash 14 598 14 041 8 292

CURRENT ASSETS 87 324 68 581 60 637

TOTAL ASSEST 172 070 147 015 131 862

LIABILITIES (in € thousands) 31/12/2011 31/12/2010 31/12/2009

Capital 7 012 6 945 6 926

Additional paid-in capital and consolidated revenues 71 135 67 145 64 532

Group net income 7 736 6 276 3 984

Group shareholders’equity 85 883 80 366 75 442

Minorities interest 805 532 486

SHAREHOLDERS’EQUITY 86 688 80 898 75 928

Borrowings and financial debt : part due in over one year 8 528 10 869 10 287

Deferred tax liabilities 2 68 137

Provisions for risk and expenses 1 412 986 700

Other non-current liabilities 1 003 6 4

NON-CURRENT LIABILITIES 10 945 11 929 11 128

Borrowings and financial debt : part due in under one year 8 564 2 236 1 286

Accouts payable 9 221 9 119 6 897

Other payables and accruals 56 652 42 833 36 623

CUURENT LIABILITIES 74 437 54 188 44 806

TOTAL LIABILITIES 172 070 147 015 131 862


Statement of cash flow at december 31, 2011 (in € thousands)

31/12/2011 31/12/2010 31/12/2009

Consolidated net income (including minority interests) 7 888 6 322 3 912

Net income accounted for by the equity method - (392) (343)

Net depreciation and amortization expense 1 154 787 864

Income and expenses linked to stock options and equivalents 414 312 64

Other income and expenses - - -

Income from dividends

(177) - -

Capital gains and losses on disposals (1 943) (1 281) (489)

Cash flow after cost of net financial debt and taxes 7 336 5 748 4 008

Cost of net financial debt 929 604 1 263

Tax expense (including deferred taxes) 6 368 5 257 3 121

Cash flow before cost of net financial debt and taxes (A) 14 633 11 609 8 392

Tax paid (B) (4 754) (3 673) (4 072)

Change in Working Capital Requirement linked to operations (including debt linked to employee expenses) (C)

(5 295) 2 337 3 101

Net cash flow from operation (D) = (A+B+B) 4 584 10 273 7 421

Disbursements linked to the acquisition of tangible and intangible fixed assets (6 293) (765) (540)

Proceeds linked to the disposal f tangible and intangible fixed asstes - 9 -

Disbursements linked to the acquisition of financial fixed assets - - -

Proceeds linked to the disposal of financial fixed assets 2 650 2 170 271

Change in loans and advances (158) (8) 25

Effect of changes in consolidation scope - (6 227) -

Dividend received 177 308 318

Net cach flow from investments (E) (3 624) (4 513) 74

Sums paid by shareholders during capital increases - - -

Sums paid upon the exercise of stock option 424 108 26

Treasury stocks repurchase ans resale (339) (4) 184

Dividends paid over the course of the year : - - -

- Dividends paid to parent company shoreholders (3 081) (1 802) (1 642)

- Dividends paid to minorities shareholders of consolidated company - - -

Cash receipts on new loans 5 327 6 700 126

Repayment of borrowings (1 470) (5 794) (7 228)

Net financial interest paid (927) (634) (1 139)

Other fluws (6) (17) (13)

Net cash flow from financing activities (F) (72) (1 443) (9 686)

Effect of change in foreign exchange rates (G) - - -

Change in net cash flow (D+E+F+G) 888 4 317 (2 191)

Cash in beginning of year 13 897 9 580 11 771

Cash at year end 14 785 13 897 9 580


GENERAL INFORMATION ON THE COMPANY AND THE CAPITAL


General information

Share Capital

On 31 December 2011, the share capital amounted to 7.011.802€, divided into 14.023.604 shares with a nominal value of €0,50 each, fully subscribed and paid, all in the same category.

Dividends

Dividends paid out over the last three years :

Year Overall Unit amount Fiscal Characteristics *

2008 1 659 601 € 0,12 € 100%

2009 1 803 425 € 0,13 € 100%

2010 1 963 921 € 0,14 € 100%

* 40% reduction mentioned in Article 158-3-2 of the French General Tax Code

Interim Dividend and Proposed Final Dividend for FY 2011 An interim dividend of €0.08 per share for FY 2011 went ex-coupon on November 25, 2011 and was paid out on December 1, 2011. The Annual General Meeting called for May 22, 2012 will be asked to approve a final dividend for FY 2011 of €0.18 per share. The dividends are valid for five years, in accordance with applicable legislation.

Breakdown of capital and voting rights over the past three years, to the best of the Company’s knowledge

To the best of the Compny’s knowledge, its shareholder structure breaks down as follows :

Position at 31.12.2011 Position at 31.12.10 Position at 31.12.09

Shareholders Number of

shares % of

capital % of voting

rights Number of

shares % of

capital % of voting

rights Number of

shares % of

capital % of voting

rights

Philippe Rabasse 2 107 000 15,02 18,49 2 011 980 14,49 16,80 1 940 000 14,01 16,63

Famille Aubert 2 023 842 14,43 16,70 2 063 842 14,86 18,30 2 063 846 14,90 18,53

Christophe Andrieux 1 092 026 7,79 10,50 1 092 026 7,86 9,18 1 092 026 7,88 9,30

Philippe Cornette 702 979 5,01 6,65 700 479 5,04 7,19 700 479 5,06 7,28

Vincent Gauthier 465 476 3,32 4,45 463 850 3,34 2,42 460 000 3,32 2,43

Famille Entrecanales 452 716 3,23 4,31 455 716 3,28 4,71 513 792 3,71 5,38

Didier Lalanne 390 080 2,78 3,15 349 370 2,52 2,62

Christian Meunier 273 500 1,95 2,62 273 000 1,97 2,84 271 500 1,96 2,86

Famille Riccardi 240 000 1,71 1,15 240 000 1,73 1,25 240 000 1,73 1,27

Massimo Galletti 195 469 1,39 1,61 204 915 1,48 1,79 204 915 1,48 1,08

Titres d'autodétention 31 651 0,23 0,00 7 819 0,06 0,00 7 780 0,06 0,00

Nextstage* 731 067 5,21 3,52

Public 5 317 798 37,92 26,85 6 026 558 43,37 32,90 6 357 717 45,89 35,24

Total 14 023 604 100,00 100,00 13 889 555 100,00 100,00 13 852 055 100,00 100,00

*Registered office: 25 rue Murillo, 75008 Paris – On behalf of the FCPI it manages, ultimately controlled by Mr. Hervé David de Beublain

As far as the Company is aware, as of December 31, 2011 there was no concerted action.

As far as the Company is aware, no shareholder in the float holds over 5% of the share capital or voting rights.

As far as the Company is aware, no other shareholder directly, indirectly or in concert holds 5% or more of the share capital or voting rights.

As far as the Company is aware, there is no shareholders’ agreement requiring disclosure under the provisions of the Dutreil Act.

There are currently no preference shares, and there are no plans at present to introduce them.

In fact, the dispersion of shares among a large number of company-manager shareholders, and the absence of a concerted action, mean there is no possibility it could be deemed “controlled”.


The Company is not aware of any agreement whose performance could result in control being acquired.

As of the date of filing of this document with the AMF, no material change to this section had been brought to the Company’s notice.

Individuals and legal entities holding a significant stake in the Company’s capital on 31 December 2011 to the best of the Company’s knowledge As of December 31, 2011, the Company’s share capital was primarily held by Mr. Rabasse (15.02%), Mr. Aubert and his family (14.43% of the share capital), Mr. Andrieux (7.79%), Mr. Cornette (5.01%) and Nextstage (5.21% of the share capital, 25 rue Murillo – 75008 Paris), on behalf of the FCPI it manages, ultimately controlled by Mr. Hervé David Beublain.

Annual Report 2011 - Aubay · Christophe Andrieux Joel Sanzot Paolo Riccardi Deputy General Manager...

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