REFERENCE DOCUMENT 2007

Transcription

1 REFERENCE DOCUMENT 2007

2 Contents Key figures flap Message from the President of the Supervisory Board Message from the President of the Management Board Corporate governance Organisation A responsible company Highlights MARKETS AND COMPETENCES Aeronautics & Space Automotive Industries, Naval & Defence Technologies Energy & Nuclear Life Sciences Facilities COUNTRIES International presence Assystem in France Assystem in the United Kingdom Assystem in Asia Assystem in China Assystem in India Assystem in Germany Assystem in Italy Assystem in Spain Assystem in Romania FINANCIAL REPORT Design and layout: Les Editions Stratégiques Photos: Assystem, Laurence Godart, Getty Images, Jupiter Images, Stone, Corbis, DIGITAL Vision, Photodisc and X. Published May 2008

3 2007 KEY FIGURES Our top 10 customers represent 57% of sales (in M ) Distribution of sales by customer business segment* EADS-Airbus 41.2 Renault 30.9 EDF 30.5 Thales Group 24.0 General Electric 22.5 Peugeot-PSA 20.2 Rolls Royce 18.6 Areva 17.4 Safran 16.5 MTU 41% Aeronautics** 2% Telecom 22% Energy & Nuclear 2% Pharmaceuticals 15% Automotive 6% Miscellaneous 12% Defence * Calculated for 80% of 2007 revenues. - ** Civil and military. Distribution of capital (as of February 29, 2008) Assystem share price and average daily volume Public D. Louis/ HDL Group 47.02% 25.07% Caisse des Dépôts et Consignations 16.06% Price movement Volume Highest Lowest 180, , ,000 Treasury stock 9.06% 10 90,000 60,000 Supervisory Board Empl. mutual fund 1.09% 1.00% 5 J.07 F.07 M.07 A.07 M.07 J.07 J.07 A.07 S.07 O.07 N.07 D.07 J.08 F.08 30,000 0 Management Board (except D. Louis) 0.70%

4 Sales by geographical area (in M ) Operating income (in M ) France Outside France Net debt/ebitda * Net debt/equity % % * EBITDA = operating income + depreciation and amortization + net provision allocations

5 EXEMPLARY GOVERNANCE MESSAGE FROM THE PRESIDENT OF THE SUPERVISORY BOARD Assystem counts itself among the companies whose Audit Committee is equipped with a charter of operations and financial code of ethics. It also appears on the list of companies whose Supervisory Board has appointed a Remuneration and Nomination Committee. Assystem has equipped itself with the means for exemplary governance. It has a strong, qualified Supervisory Board that remains committed to its monitoring and strategy planning responsibilities, and maintains a quality working relationship with the Management Board. The governance of Assystem relies first and foremost on the wealth of experience of the Management Board and the Supervisory Board, whose members hold or have held management responsibilities in the industrial sectors of Assystem s customers - aeronautics and space, industry, energy and nuclear, automotive, telecom and new technologies. Their knowledge of these sectors is essential to understanding the full implications of our projects, and they ask the Management Board questions which help it refine its strategy and ensure that it is correctly applied. Several members of the Supervisory Board have held the title of Financial Director or work in the finance sector. This high level of expertise serves to enforce a rigorous code of professional ethics: Assystem is a company in constant evolution: originally in the nuclear industry alone, it has greatly diversified, enabling it to weather the crisis in the sector, and to gain a better level of resistance in its markets. Today, the company is demonstrating this same responsiveness in its efforts to adapt its economic models to the evolution of its large clients product engineering needs. In process engineering, it benefits from the new dynamics of the nuclear sector. And in a market constantly seeking embedded technologies, the Group rationalised its business portfolio and has just made an acquisition in critical safety systems. In 2007, Assystem continued its consolidation in a harsh environment. Today, with a varied business portfolio, clear strategic visibility in each one of its markets - Product, Process, Facilities and Technologies - a strong capacity to respond and to care for its customers, and a balanced shareholding coherent with its development plans, Assystem is armed to face the challenges ahead. Michel COMBES President of the Supervisory Board 1 ASSYSTEM / 2007 Reference document

6 RELIABILITY AND RESPONSIVENESS 2 With million euros in sales, a slight increase compared to 2006, and an operational income of 5.5% (35.9 million euros), a 15.1% improvement on 2006 figures, 2007 showcased the solidness of our operational and functional processes, and our ability to overcome adversity in a very volatile environment. Assystem s image in the profession, with the variety of career paths that it offers, continues to attract the talent we need to further our development and to achieve our long-term goal of being recognised among the world s top engineering firms If our improvement in income is largely due to the increased effectiveness of our organisation in France, then our cash position can be attributed to our dynamism and rigour. It is the culmination of a plan set in motion on various fronts in 2005: installation of an ERP system, development of rigorous procedures, improvement in the efficiency of our cross-functional operations, increased monitoring of foreign subsidiaries, etc. This administrative attention for detail reached in the financial engineering section made it possible to construct new sites in Paris and Toulouse, which in turn has allowed us to regroup our teams and rationalise our operations. This in-depth approach has since borne fruit in a difficult environment. Assystem s free cash flow has reached the record level of 55 million

7 euros, making it possible to decrease our net debt and our financial expenses. Our gearing has been divided by nearly three, and our net debt (27.2 million euros) is now about half of our EBITDA. It is essential that we not be content with these figures, particularly our operating income, and we ensure that our good management practices continue. But even more importantly, the time has come to take advantage of our solid footing to increase growth. Indeed, our overall stagnation in sales turnover should not overshadow the dynamic growth in some sectors of our operations, particularly the continual progression of Facilities, nor the power of our growth engines, as illustrated by the significant turnaround that we achieved in our three other markets during the second half of the year. We serve the aeronautics industry as a strategic supplier in the engineering and design department; a sector that has proved promising, as our backlog of Airbus orders demonstrates. In engineering, the rejuvenation of the nuclear sector is particularly favourable to us: Assystem is historically part of the nuclear family, and can only profit from the potential of the global market. But the pursuit of our ambitious goals in engineering also requires the acquisition of additional capacities to ensure progress in infrastructure development. In these two markets, the vertical integration of the value chain could offer new opportunities. Lastly, we must continue to expand our R&D outsourcing in new technologies to fully benefit from market growth. Assystem pictures the future with prudence, but with confidence. The reliability of our functional infrastructures, which was a strategic objective, together with our responsiveness, an essential trait of our business personality, allow us to confront the risks of an uncertain shortterm world economy. Investments spurred on by concern for sustainable products and processes help the dynamics of our business and offer strong prospects for medium-term growth. Assystem s image in the profession, with the variety of career paths that it offers, continues to attract the talent we need to further our development and to achieve our longterm goal of being recognised among the world s top engineering firms. Dominique LOUIS President of the Management Board 3MESSAGE FROM THE PRESIDENT OF THE MANAGEMENT BOARD ASSYSTEM / 2007 Reference document

8 4 CORPORATE GOVERNANCE Assystem is a public limited company with a Management Board and a Supervisory Board. This form of company allows effective separation of management and supervisory roles. Assystem management is extremely vigilant about the efficiency of our major decision-making process, and the fluidity of information within the Group. This constant concern results, in particular, in a highly decentralised method of organisation. THE AUDIT COMMITTEE The Audit Committee met six times in The attendance rate was 71%. The Audit Committee s task is to assist the Supervisory Board in carrying out its duties and responsibilities in the financial and audit areas. THE SUPERVISORY BOARD During the past year, the Supervisory Board met four times. The attendance rate was 73%. In accordance with the articles of association and rules of procedure, the Supervisory Board meets as often as is required by the interests of the company, and at least four times a year. In order to carry out its duties correctly, the Board receives regular and complete information about the items submitted to it before its meetings, covering all the issues on the agenda, particularly information each quarter on the company s management. The Supervisory Board has decided to directly address certain subjects concerning the Group s strategy and has set up two Committees to do so: an Audit Committee and a Remuneration and Nomination Committee, each with its own rules of procedure. THE REMUNERATION AND NOMINATION COMMITTEE The Remuneration and Nomination Committee met twice in The attendance rate was 67%. The task of the Remuneration and Nomination Committee is to submit to the Supervisory Board proposals concerning the appointment and remuneration of members of the Supervisory Board, members of the Management Board, the President of the Management Board, and any Managing Directors and members of the Audit Committee. THE MANAGEMENT BOARD The Management Board currently comprises six members: the President of the Management Board, Dominique Louis, who represents the company with respect to third parties, and five members covering all the functional and operational skills essential for the growth of the Group: Gerard Brescon, Jean-François Lours, Stéphane Aubarbier, Gilbert Vidal and David Bradley.

9 CORPORATE GOVERNANCE The Management Board, with from left to right, in the foreground Stéphane Aubarbier, Gilbert Vidal, Jean-François Lours, in the second row Dominique Louis, David Bradley, Gerard Brescon The Management Board Dominique LOUIS President Jean-François LOURS Vice-President Executive Vice-President in charge of Strategy Stéphane AUBARBIER Executive Vice-President in charge of Engineering David BRADLEY Executive Vice-President in charge of Aeronautics Gérard BRESCON Executive Vice-President in charge of the development of Human Resources Gilbert VIDAL Executive Vice-President in charge of Finance The Supervisory Board Michel COMBES President Chairman and CEO of TDF Jean-Pierre DESGEORGES Vice-President Honorary Chairman of KBL France Former Chairman of GEC Alsthom Jean-Pascal TRANIÉ President of the Management Board of Aloe Private Equity S.A. Rémy CHARDON Consultant and Vice-President of Progosa Armand CARLIER Permanent representative of the limited liability company Amaryllis Conseil & Investissement Philippe BRAIDY Representative of Caisse des Dépôts et Consignations (CDC) Director of Territorial Development and Networks at Caisse des Dépôts et Consignations Gilbert LEHMANN Areva Management adviser Stanislas CHAPRON Chairman of the Management Board of Marsh SA The Remuneration and Nomination Committee Jean-Pierre DESGEORGES President Stanislas CHAPRON Rémy CHARDON The Audit Committee Jean-Pascal TRANIÉ President Armand CARLIER Pierre GUÉNANT Gilbert LEHMANN 5 ASSYSTEM / 2007 Reference document Pierre GUÉNANT CEO and founder of the PGA Group

10 ORGANISATION Assystem s operations are wide-ranging in many respects: the technical skills and specialties required, as well as the legal, cultural and geographical landscapes of the countries in which it is present. 6 LOCAL SERVICES AND FIXED-PRICE PROJECTS: TWO REALITIES, TWO WAYS A ssystem has 9,000 employees in Europe and Asia that stretch across a network of approximately 90 establishments and several hundreds of operational units. The company s operations are wide-ranging in many respects: the technical skills and specialties required, the sectors in which it conducts business (Aeronautics & Space, Automotive, Energy & Nuclear, Life Sciences, Industries, Naval & Defence) and the two cross-functional areas of business in which it operates (Facilities and Technologies), as well as the legal, cultural and geographical landscapes of the countries in which it is present. Operations can also be distinguished by their form of contractualisation. Technical assistance is a local service closely dependant on local conditions, in which customers expect a high degree of responsiveness. Fixed-price projects, on the other hand, demand a much higher level of commitment, and therefore require the mobilisation of specific and rare skills in project management, legal matters, insurance, business, etc. Assystem s organisation reflects the needs of each one of these operational paradigms: fixed-price projects are handled under the direct responsibility of the sectors, which concentrate expertise at the international level; local services are managed locally, so that units are responsive and able to take the initiative as much as possible.the sectors coordinate technical assistance for large international accounts. Support functions are structured to closely fit operations, according to a dual logic of decentralisation and mutualisation generally carried out at the national or regional level. Headquarters concentrates on comprehensive tasks such as strategy, financial and legal planning and control, HR and communication policy, as well as certain functional areas of expertise.

11 SIMPLIFIED ORGANISATIONAL CHART AS OF JANUARY 1 ST, 2008 ORGANISATION Spain ASSYSTEM Iberia Portugal ASSYSTEMBrime Portugal Italy ASSYSTEM Italia Slovakia ASSYSTEM Slovakia Germany ASSYSTEM Aerospace Germany ATENA ASSYSTEM Deutschland Belgium ASSYSTEM Belgium Romania ASSYSTEM Romania Canada ASSYSTEM Canada Luxembourg Luxembourg company of ASSYSTEM GROUP UK United Kingdom ASSYSTEM Group UK 7 TFSI Brazil SYTECH BRASIL Switzerland Geneva branch of ASSYSTEM France ASSYSTEM France ASSYSTEM Innovation ATS and its subsidiaries France India China ASG Athos Aéronautique ANAFI and its subsidiary ATENA INDIA ASSYSTEM Engineering Consulting ATSINO ASSYSTEM Facilities EUROSYN Développement ASSYSTEM International ASSYSTEM / 2007 Reference document

12 A RESPONSIBLE COMPANY 8 After having endowed Assystem with the means for lasting development, the time has come to increase the visibility of the company s founding values: excellence, responsibility, integrity and respect, and to make them common ground for all of our employees, whatever their origin. I n 2006, Assystem made a strong public statement by promulgating its Charter of professional ethics, which formalises the principles of action and the rules which govern the behaviour of each employee, with respect to all stakeholders and, in particular, toward their natural and human environment, because the greatest resource of a company like Assystem is the men and women who work for it. THE FIGHT AGAINST EXCLUSION It is therefore natural that Assystem strongly emphasises the human dimension of sustainable development, through the fight against exclusion stemming from social origin or handicap. In 2007, the Group signed, along with the Ministry for National Education, the Charte d Engagement des entreprises au service de l égalité des chances (Charter of corporate commitment to serving equal opportunity in education) as well as an agreement with Lycée Henri IV. The second agreement is a practical application of the Charter, designed to provide "a personalised response to the major difficulties which most underprivileged young people face in education, orientation and professional integration". Assystem France is also an active participant in the fight against exclusion resulting from handicap: the agreement signed in June 2007 with Agefiph commits the company to setting aside an annual budget of 85,000 euros for the hire of 15 disabled people for the June June 2008 period. It also created a Mission Handicap unit, whose role is to raise awareness, train both teams and management, and help change the image of being handicapped within the company. Members of the company have responded enthusiastically to these actions, which enmesh Assystem in the human experience of its employees. HELPING TO REDUCE GREENHOUSE GASES Assystem is committed to the fight against global warming: it joined, alongside other international firms, Global Compact s Carbon Disclosure Project, which seeks to measure greenhouse gas emissions (GHG). In view of this membership and actions initiated in the United Kingdom, the company will soon start the first phase in the ISO environmental certification process. One concrete example of our commitment to reducing emissions is our use of videoconferencing whenever possible to avoid business trips. In addition, Assystem took the initiative of conceiving a transportation solution which minimizes GHG emissions: the Assystem City Car, a concept hybrid car constructed in collaboration with the designer Sbarro. The demonstration vehicle, unveiled in 2007, is now undergoing a feasibility study in partnership with the Franche-Comté region. Assystem is also involved, through some of its contracts, in innovations which address issues in sustainable development: the BMW hydrogen engine, the fuel cell of a large French car manufacturer, and Gamesa wind turbines. These initiatives represent a synergy of two dimensions of sustainable development: the economy and the environment.

13 A RESPONSIBLE COMPANY 9 Mission Handicap Agreement with Lycée Henri IV Assystem has agreed to financially support, over a period of three years, the CPES Initiative (Classe Préparatoire aux Études Supérieures - preparatory class for highly-selective universities), to help students from modest backgrounds enter into the most selective preparatory classes. Company executives sponsored six pupils from Henri IV s scientific stream. Assystem France acted to lend a helping hand to the social and professional integration of disabled people through an agreement with AGEFIPH signed on June 22, The project, supervised by Mission Handicap, contains four principal objectives: to recruit, integrate, guide, and retain handicapped workers. Thanks to an effective communication campaign, the first results were tangible: 11 hires were made. As of December 31, 2007, Assystem France counts 52 disabled employees. ission HANDICAP Hydrogen vehicle Assystem collaborated with BMW on the Hydrogen 7, the first hydrogen-fuelled production vehicle. Assystem was responsible for the fuel control unit, all the way from the definition of the technical specifications to the delivery of a preproduction run of 200 prototypes: proof of Assystem s strong involvement in innovative projects designed to address problems in the field of sustainable development. ASSYSTEM / 2007 Reference document

14 2007 HIGHLIGHTS 10 CHINA JV Assystem - ATSINO May 15. Inauguration of ATSINO, the first joint-venture in the automotive industry between Assystem and Chinese partners. ATSINO gives Chinese manufacturers a local offer adapted to their operating methods, and supported by highly qualified European teams. FRANCE Parisian teams under one roof December 11. Inauguration of Futura 2, the new Assystem site in Saint-Quentin (Yvelines). As a performance driving force, it brings the employees of six Paris-area sites under one roof. FRANCE The "Bee[Z ]" ERP is operational December 31. Installation of Assystem France s new ERP is complete. The new integrated system provides Assystem France with accounting and management support, and gives managers a real-time view of their business. APPOINTMENT David Bradley enters the Management Board December 13. David Bradley, Executive Vice-President in charge of Aeronautics, is named to the Assystem Management Board. Chairman of Inbis (now Assystem UK Ltd) since 2002, David Bradley had been a member of the Executive Board since 2005.

15 2007 HIGHLIGHTS RECENT EVENTS JV Assystem Silver Software February Signature of an agreement with Silver Software for the creation of a joint-venture for the design of electronic and computer-based critical safety systems. The project will combine all of Silver Software s operations with Atena s Technologies division, and primarily will serve the aeronautics, railway and automotive sectors. 11 Assystem City Car March At the International Motor Show in Geneva, Assystem presents the wheel base of the Assystem City Car, an urban vehicle which develops innovative and buildable solutions at a cost in line with the market. By physically building the wheel base, in partnership with designer Franco Sbarro, the Automotive teams involved with the project since 2007 validated their initial research in terms of mobility, handling and stability, as well as respect for the environment: diamond-shaped wheels, a very low centre of gravity, dual electric and thermal motorisation, directional wheels, etc. Southwest teams under one roof March The employees of the Southwest region, previously spread across three sites in the Toulouse area, now all work together at the new Arc-en-Ciel building, located near Airbus. In addition to the internal synergies made possible by the move, Arc-en-Ciel will be, after Futura 2, the company s second largest data-processing centre, allowing Assystem France to both share and safeguard its data. ASSYSTEM / 2007 Reference document

16 12 AND

17 MARKETS COMPETENCES 13 > Aeronautics & Space > Automotive > Industries, Naval & Defence > Technologies > Energy & Nuclear > Life Sciences > Facilities ASSYSTEM / 2007 Reference document MARKETS AND COMPETENCES

18 > SALES IN FRANCE m AERONAUTICS & SPACE 2007 has given Assystem the opportunity to draw the benefits from its internationalisation and make one more step forward towards being a fully integrated organisation. > SALES OUTSIDE FRANCE m 14 The main expertise of Assystem in the aeronautic sector lies in mechanical design applied to aerostructures and system installation (electrical, mechanical, fuel systems), to engines, satellites and helicopters. Assystem assists its customer s research activities through the provision of resources, provides product design and definition services and supports the development of the cost effectiveness of manufacturing processes. Lastly, Assystem offers service activities in certification, modification, retrofit and customisation of aircraft was more a time for consolidation and diversification than a growth year. The activity level was slightly lower than expected, due to less activity with third party suppliers and to delays in the launch of the A350. But this delay was partly compensated for by new activities on programmes such as the A330 and A400M. The increasing workload linked to the detailed design stage of the A350 should intervene in Still, Assystem fully achieved its operational profit objectives, thanks to the integration and more efficient execution of fixed-price work packages. > HEADCOUNT 2, independents > SALES DISTRIBUTION BY CUSTOMER Airbus: 49,5% Rolls Royce: 10,2% EADS: 9,7% BAE Systems: 8,6% MTU: 4,3% Other customers: 17,7% Indeed, being an international company really proved a key asset, in view of the volatility of the market: it reached a peak of demand in the United Kingdom and Germany in the first semester, and slackened in the second half of the year, while it picked up in France. By moving work, and people, throughout the various offices, including those in Italy and Romania, Assystem could both answer customer demand and keep a quasi steady level of work in all countries. Assystem demonstrated it was an integrated company, with enough flexibility to place the right resources in the right place at the right moment, and deliver the quality customers expect.

19 MARKETS AND COMPETENCES 15 To offset the risks inherent in the weight of its major customers, Assystem has set itself the target to broaden its customer base. It has been successful in developing new relationships with customers in both Europe and in the United States, working with a new tier one supplier to Airbus and Boeing and across a wider spectrum of aircraft programmes including business jet programmes, a sector that offers good opportunities and a different economic cycle from that of bigger aircraft. Diversity also comes from military activities, which represent a significant percentage of the business. As far as the engine business is concerned, Assystem has formed an international sub-business unit teaming up France, Germany and the UK. Assystem has tuned itself up to meet the challenges of 2008: facing a more competitive commercial environment with stricter cost pressures and learning to work with new customers. High activity levels are expected in the second half of the year, because of the need of engineering support for the A380 as well as the growing support for the A350. Assystem relies on its ability to be recognised as a key engineering partner by undertaking a combination of fixed price packages and local technical support for all customers irrespective of the size or nature of the requirements. DASSAULT AVIATION Dassault Aviation has been a customer for over 10 years. At the end of 2005, they commissioned Assystem teams to draft studies on commercially fitting their Falcon 900 and 7x business jets through a fixed-price contract. Our ability to offer a multi-site unit to manage the project, which was spread out between Saint Cloud and Mérignac, was one of the key elements to this success. ASSYSTEM / 2007 Reference document

20 > SALES IN FRANCE m AUTOMOTIVE The year 2007 demonstrated the efficiency of Assystem s planning and control networks, the ability of the Group to redistribute its internal resources, and the responsiveness of its Automotive teams faced with significant changes in market demand. Overall, sales revenue in the sector slightly decreased, but profitability improved considerably during the second half of > SALES OUTSIDE FRANCE m > HEADCOUNT 1, In France, Assystem was confronted with a decrease in engineering and industrialisation operations resulting from a reduction in its customers investments in their production equipment, but also enjoyed gains in productivity related to the increase in fixed-rate priced product development. Indeed, in addition to design blocks, whole "markets" are being outsourced; one manufacturer entrusted Assystem with the study of a subset for all its vehicles over a period covering several years. Reacting to this new situation, Assystem reassigned approximately 200 employees in less than six months, some 20% of its Automotive workforce, to various other divisions, mainly Energy & Nuclear. Another key action, the separation of project management from technical assistance, was completed in It allowed us to professionalise our Projects section, both in relation to number and expertise of the technical teams and the installation of production and monitoring tools. As a result, we have seen improvements in project cost control. In parallel, the level of quality, as judged by our customers, achieved an ambitious goal in line with their expectations. The third highlight of 2007 is the development of new technical assistance positions: quality (accidentology studies), innovation (participation in the development of a fuel cell vehicle) and logistics. Finally, after-sales operations such as technical documentation for customers and dealers, and diagnostic tools were increasingly produced under fixed-price contracts and enjoyed solid growth. At the international level, Assystem followed manufacturers onto their markets. In Romania, the team working on local projects expanded from 30 to 80 people following Renault s decision to develop its Logan platform locally. In Italy, the strong development of the Fiat product plan, which offers valuable prospects for 2008, resulted in the size of the dedicated team multiplying by five. And in China, the ATSINO joint-venture, created in 2007, got off to a fast start with its DPCA and Nanjing Automotive Corporation operations. The current situation allows us to have an optimistic outlook for Quality management of large contracts has rewarded Assystem with a positive brand image. Its technical assistance structures have been adapted to fit the innovation needs of the markets, and offshore subsidiaries participated in their specialisation. > SALES DISTRIBUTION BY CUSTOMER Renault: 50% PSA: 20% Fiat: 14% Volvo Trucks: 5% Other customers: 11% DPCA DPCA, a joint-venture between PSA and Dong Feng Motors, worked with a mixed team of French and Chinese partners within ATSINO. The team produced, in record time, a preliminary study of the adaptation of a gear box to the technical specifications of the customer s engines.

21 INDUSTRIES, NAVAL & DEFENCE In the Industries, Naval & Defence division, Assystem created dedicated management teams for its technical assistance projects. The sustained pace of its operations is particularly owed to a lasting resurgence in railway investment. > SALES IN FRANCE m > HEADCOUNT 550 MARKETS AND COMPETENCES Industries, Naval & Defence teams focus primarily on product development, which represents 80% of its operations, and industrialisation (20%). In 2007, performance and sales objectives were met and exceeded. Operations were initially buoyed by the civil naval sector, which regained momentum as expected. In the beginning of the year, Aker Yards, a shipbuilding group, entrusted Assystem with the study of part of their new passenger liner, one assignment within the framework of a larger partnership that is growing stronger and will continue to do so in the coming years. Additionally, the railway sector has again become very active: our teams posted significant growth in this sector, particularly with Bombardier and Alstom. After years of underinvestment, a new demand for updated equipment has been stimulated by events such as the Olympic Games in Beijing and London, and by structural causes, such as increased awareness of sustainable development practices. Lastly, our teams in the Industries, Naval & Defence division profited from the strong performance of manufacturing industries, which enabled them to secure a large international project with Schneider Electric. In the future, railway should continue its ascent thanks to the development of new high-speed lines across the world and urban transport in large cities is also set to mark a new beginning for the military naval sector, with the "number 2" aircraft carrier expected to be officially signed during the first half of the year. And, by , Assystem will become involved in creating the new Barracuda generation of nuclear attack submarines. High investments are also expected in companies in heavy industry such as Alcan, ArcelorMittal and Michelin, for which Assystem opened a dedicated office in Clermont-Ferrand in > SALES DISTRIBUTION BY CUSTOMER DCNS: 15% Schneider Electric: 11% Aker Yards: 6% EDF: 5% ADP: 5% Cryostar: 4% Alstom: 3% Arcelor: 3% Bombardier: 3% Michelin: 3% Other customers: 42% SCHNEIDER ELECTRIC Following an international call for bids, Schneider Electric chose Assystem s Industries teams to produce all of the technical documentation for its "Automation & Control" offer, from document design through translation of the finished product in ten languages. By signing a Service Level Agreement, Assystem pledged not only to assure the quality of its services, but also to reduce costs. CONVERTEAM Converteam, supplier of propulsion systems, entrusted Assystem s Naval Defence teams with the testing portion of its technical assistance contract with Bombay shipyard Mazagon Dock Ltd. Assystem, recognized for its experience and its ability to select technicians to assist the end customer, is tasked with writing the procedures and the operating guide for the ship s propulsion system, and will assist the Indian teams in testing the latter both docked and at sea. 17 ASSYSTEM / 2007 Reference document

22 > SALES IN FRANCE m TECHNOLOGIES Our competences in Technologies are present in almost all of the Group s sectors of operation. After reorganising in 2007, Technologies began to bear the fruit of its dynamic development, expanding its offer and customer portfolio, and strengthening its presence in new countries. > SALES OUTSIDE FRANCE m > HEADCOUNT 1, Present in the aeronautics, automotive, nuclear and energy, defence, industry, telecommunications, tertiary and transport sectors, our Technologies teams engage in studies and the construction of prototypes, hardware and software development, systems integration, validation, training, and maintenance in operational condition (MOC). Their principal areas of expertise are embedded systems, electronics, systems, tests and measures, automatic operations and information systems. In 2007, Technologies completed its reorganisation by separating, from a sales and execution standpoint, local services and consultancy from Research and Development responsibilities, and > SALES DISTRIBUTION BY CUSTOMER EADS Airbus: 13% Thales: 10% Sagem: 9% MTU: 6% EDF: 5% Peugeot: 4% Other customers: 53% from Engineering. However, the two departments remain very close in terms of information sharing and coordination, and benefit from the synergy between thelocalapproachoftheformer,andthe global vision of the latter. Technologies strengthened its position in automotive, aeronautics & space and increased its presence in railway, defence and energy & nuclear. In the automotive sector, it expanded its traditional clientele in the manufacturing world through a testing and validation contract for engine parts, which provided an opportunity to develop a relationship with Fiat. In aeronautics, Technologies enjoyed a solid year working with the EADS Group, especially in validation, tests and embedded systems.

23 MARKETS AND COMPETENCES 19 It also expanded in Germany and worked on a first project for Eurocopter. Other significant successes of 2007: in aerospace with Astrium and Thales Alenia Space, in the railway sector with Alstom, and in the defence, energy & nuclear sectors with Thales and Sagem, where the Group gained position in the MOC of programmable controllers at nuclear power plants. Intermsofgeographicaldevelopment, Assystem launched operations in Spain and Romania, relying on its local presence for support. The Group s approach requires strengthening local areas of expertise in order to transform them into areas of profit, as was the case in France, where the Group pursues a dual strategy: geographic coverage (local and national), and sector-based coverage by region. The success of this strategy shows the dynamism of our Technologies teams. Thanks to sound organisation and a high level of expertise,our Technologies teams approach 2008 with confidence. To fully benefit from market dynamics, the teams were given three objectives: to initiate the strategy and development programme; to strengthen their lines of communication; and to continue active recruiting of new employees as well as earning the loyalty of current ones, supported by a corporate culture based on solid values, which balances a competitive nature, efficiency and performance with mutual respect and solidarity. THALES ALENIA SPACE Since the end of 2006, a Technologies team has been, via a fixed-price service acceptance, testing equipment embedded in satellites at the Thales Alenia Space site in Toulouse. The success of this assignment, essential for ensuring the conformity of the aerospace equipment, led to the creation of another team in Spain s capital Madrid to carry out similar testing services under tighter deadlines for Thales Alenia Space s Madrid subsidiary. RAIL TRANSPORT Since the communication network that commands automated trains is moving to WIFI, the world number one in rail transport entrusted Assystem with the drafting of a White Paper on international safety standards, certification processes and the technical solutions needed to meet its demands. ASSYSTEM / 2007 Reference document

24 > SALES IN FRANCE 3 70 m ENERGY & NUCLEAR > SALES OUTSIDE FRANCE m Beyond its work in the tests and start-up operations market, its historical expertise, and the strengthening of its technical assistance operations, in 2007 Assystem secured its footing in the field of EPCM (Engineering, Procurement, Construction Management), both in order to better service large manufacturers in the sector and to further its own international development. > HEADCOUNT 1, With 15% growth in France and the hire of over 330 employees, in 2007 Assystem was able to respond to increasing demand from large accounts such as General Electric, CEA, EDF, AREVA and Alstom. Assystem also entered the gas market with Gaz de France in a joint agreement with a European partner. In the nuclear market, Assystem continues to gain recognition thanks to a contract with EDF related to EPR and its first project with AREVA, on the Finnish OL3 reactor. At the international level, Assystem began an electronuclear study in China with the NPIC, and also assisted Gamesa, the Spanish wind turbine designer and manufacturer, in relocating part of its manufacturing operations there. Assystem also remained very visible in the British nuclear market through its contracts with UKAEA and Harwell among others, as well as its work on programmes at the Nuclear Decommissioning Authority s (NDA) Sellafield site. > SALES DISTRIBUTION BY CUSTOMER General Electric: 30% CEA: 16% Areva: 11% EDF: 9% Alstom: 7% Other customers: 27% Within the company, Assystem set up an organisation design for its engineering competences called DMI (Direction des Métiers de l Ingénierie Engineering Competences Management). Engineers of various specialities bring their technical support and know-how to teams in charge of the implementation of projects both in and outside France. For 2008, Energy & Nuclear teams have targeted dual objectives. First, to fortify our presence as EPCM contractors in the construction of Basic Nuclear Installations (BNI) in the field of dismantling and waste conditioning, and secondly to use our position as French industry leader in the field of nuclear OIE (Owner Integrated Engineering) to help us develop in other sectors.

25 LIFE SCIENCES > SALES IN FRANCE m > HEADCOUNT 155 > SALES DISTRIBUTION BY CUSTOMER MARKETS AND COMPETENCES In the life sciences sector, Assystem exploited its strong competences in qualification-validation to focus on its move into biotechnologies and expanded its scope of activities to OIE and EPCM contracts to better serve its customers needs. Sanofi-Aventis: 40% Lilly: 25% Novartis: 4% GSK: 3% Merial: 2% Other customers: 26% ALSTOM POWER Three framework agreements were signed with Alstom Power between June and October 2007 (with the Plant section and the Turbomachines group). These signatures occure at a moment when the Group is again opening to subcontracting in an effort to get a large number of projects off the ground very quickly. Assystem takes part in the development or the design of various equipment and integrated systems in thermal stations. Life Sciences teams are present in two main markets: facility qualification-validation and OIE and EPCM. Its major competences are testing, start-up operations and regulatory compliance. Life Sciences is well-known in France and possesses a 30% market share in the country. In 2007, the division enjoyed a growth rate of over 15%, sustained by continued investment in the pharmaceutical sector. In qualification-validation, it further penetrated the biotechnologies sector, a field which is developing rapidly and will soon be one of the focal points of pharmaceutical industry growth. The sector requires specific competences in terms of equipment and regulatory compliance. Assystem strengthened its partnerships in this area with several pharmaceutical laboratories and semi-public organisations which develop projects both in and outside France. In addition, Life Sciences reinforced its positioning by adding new services to its OIE repertoire: cost control, logistics and planning; and by developing its EPCM services. These are strategic services designed to fulfil the requirements of our customers, who expect guidance and shared risk in fixed-price contracts, a business that continues to grow in scale, duration and breadth. 21 Three main goals have been identified for 2008: > take advantage of our prominence in the qualificationvalidation market in order to expand the breadth of our operations to include all OIE services. > increase our EPCM activities by demonstrating Assystem s ability to create tailor-made solutions for large investment projects. > benefit from our solid position in France to lay the foundation for real international development. To do this, we will have to invest energy to ensure that our 2007 efforts in Switzerland, in Belgium, and in the United Kingdom bear fruit. Life Sciences also equipped itself with the means to succeed in overcoming the challenges of recruitment by setting up an organisation and lines of communication adapted to attracting the talent needed to continue its growth. PHARMACEUTICAL INDUSTRY Assystem was entrusted with a highly critical assignment by a world leader in vaccine production. In conjunction with the extension of one of its customer s sites, an Assystem team implemented the strategy and coordination for qualification testing of the site s "noble" utilities (purified water and water for the preparation of injectables), cleansing and sterilisation equipment, and end-of-production visual inspections. An assignment which opens up new horizons for the future. ANIMAL HEALTH Assystem was entrusted by its customer, a major player in the sector, with the preparation of reorganisation plans for one of its French sites in view of increasing its export capacity. Assystem s responsiveness, its competences in industrial engineering and its knowledge of processes, equipment and the customer s regulatory status were all essential to the success of this prime contract. ASSYSTEM / 2007 Reference document

26 > SALES IN FRANCE m FACILITIES In the facilities market, Assystem found ways to secure growth, despite the decrease in activity in the aeronautics sector, by increasing its presence in other sectors, such as energy and naval & defence, and by developing new competences, notably in training and industrial performance improvement (IPI). > SALES OUTSIDE FRANCE m > HEADCOUNT 1, Overall, it was a good year for Facilites, which enjoyed sales growth and increased income. In France as well as abroad, its principal engine of growth was the operations-maintenance market, where it maintained its consistent progress. The energy production sector fuelled Facilities strong growth, particularly in the field of nuclear and thermal power stations. Naval & Defence also proved to be very dynamic; the maintenance intervals of the Téméraire submarine and the Charles de Gaulle > SALES DISTRIBUTION BY CUSTOMER EADS - AIRBUS: 23,5% EDF: 17,9% DCN: 7,9% Groupe AREVA: 7,7% THALES: 7,0% Other customers: 36,1% aircraft carrier gave Facilities teams many occasions to practice their expertise. Aeronautics suffered from Airbus slowdown, but a rigorous savings program made it possible to compensate for this decrease of activity and to preserve profitability. On the export side, Facilities consolidated its positions in the Middle East and increased its activities in the oil sector. In addition, Facilities developed on a new market, industrial performance improvement (IPI), which progressed in terms of profitability and sales turnover. A branch of auditing, IPI often serves as an entry point for customer development, so that they can later implement the improvement recommendations suggested by Assystem

27 MARKETS AND COMPETENCES 23 and the planning and coordination that this entails. One of the resounding successes of our 2007 move into IPI was the pre-audit of EDF s Renouveau project for the modernisation of its hydropower plant operations. Our Auditing, Counselling, and Training pole executed a significant organisational rationalisation, a mutualisation of its agencies competences, and large account prospecting. For example, a new offer was developed which targets the major actors in the nuclear sector: a qualifying training programme for their employees. It represents another layer of the various development vectors such as asbestos risk training, the fire safety training carried out in the tertiary sector to conform to new regulations, or the transfer of competences. Indeed, many companies face the risk of losing skills and knowledge and are interested in the methodology of the Facilities teams, who offer them the possibility of managing their competences and making sure they endure. EDF Assystem was chosen by EDF to carry out the prediagnotics for four development plans for its hydropower plant renovation project. EDF selected Assystem for the project because of its expertise in evaluation, and its experience in organisation, computer-assisted maintenance and rotating parts. In addition, our Technologies teams possess an expertise in control and supervision, another factor which helped us win the bid. STAT MARINE TFSI Ltd employees played a part in the deep water installation of "well jumpers" - pipes about thirty meters length that weigh approximately twenty tons - within the framework of an oil development project in the deep waters of Nigeria. TFSI was able to show its versatility on this complex project, carried out for Stat Marine, an industry leader in Underwater Engineering for the Oil and Gas industry. ASSYSTEM / 2007 Reference document

28 INTERNATIONAL PRESENCE 24 Country establishment Representative office Already firmly established in Europe, Assystem is expanding in buoyant Asian markets such as China or India. Belgium Brazil Canada Channel Islands China France French Polynesia Germany India Italy Luxembourg New Caledonia Poland Portugal Romania Slovakia Spain Switzerland United Kingdom

29 COUNTRIES ASSYSTEM IN FRANCE > MAIN SUBSIDIARIES: Assystem France, Assystem Facilities > HEADCOUNT: RECRUITMENTS: 1,150 > SECTORS: aeronautics, automotive, energy & nuclear, heavy and manufacturing industries, naval & defence, life sciences Newfound serenity Assystem Facilities pursuit of growth, Assystem France s turnaround, a return to fundamentals and a positive balance sheet. Assystem in France approaches 2008 with a clear priority: profitable and cash-generating growth. Profitable growth has been a top priority for Assystem Facilities, one of our French subsidiaries, which enjoyed a very satisfactory 2007 period. For Assystem France, the largest subsidiary of the Group, 2007 marks a return to operational and financial serenity. The first pillar of this composure is the now operational ERP called "Beez", whose installation began in This support tool provides us with reliable reporting. The second pillar is the optimisation of our use of resources: the Information Systems Division has constructed a system for sharing protected data. Human Resources ensures both the mobility and the progression of our employees and the transfer of resources between entities to balance the workload, as was the case during the first half of the year for 200 Automotive employees. is planned for the end of The same regrouping occurred in Toulouse, where all teams were transferred to the Arc-en-Ciel building in March Assystem is now ready to profit from the growth opportunities, particularly in the energy and nuclear sector where France plays a leading role with respect to the Group s other establishments. To obtain the necessary competences for this growth, Assystem has launched a plan to create a training school for careers in the electronuclear sector, an area whose occupational territory must be expanded outside France. An expression of Assystem s leadership in the sector, this school will make it possible to increase the employees skill sets, and at the same time serve as an attraction pole and instil a sense of collective belonging in the Group. 25 To further streamline operations, Assystem France and Assystem Facilities teams relocated in August 2007 to a single site in Ile-de- France, at our functional Futura 2 location in Saint-Quentin-en- Yvelines, which brings under one roof all of the expertise necessary for the execution and monitoring of an increasing number of fixed price projects. The opening of a second site in Saint-Quentin, Futura 3, This last point is essential to HR policy, which simultaneously aims to reinvigorate recruitment - notably with a new application management tool to be launched by the end of and to control turnover by recognising the efforts of team members and by helping them to develop useful know-how for the future. ASSYSTEM / 2007 Reference document