Press release

ESI Group: Q1 2019 Revenue up 1.4% to €26.6 Million

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Regulatory News:

ESI Group (Paris:ESI), Paris, France, (ISIN Code: FR0004110310, Symbol:
ESI) announced today its revenue for the first three months of the 2019
financial year1.

Revenue (€m)   Licenses   Services   Total
Q1 2019   20.1   6.5   26.6
Q1 2018 19.0 7.2 26.3
Change +5.6% -9.9% +1.4%
Change c.e.r   +2.1%   -11.6%   -1.7%

c.e.r. – constant exchange rates

Cristel de Rouvray, Chief Executive Officer of ESI Group, commented: “Our
business model does not lend itself to quarterly interpretation, as
quarterly metrics do not give a true picture of the results we expect
from our focused sales plan. Looked at from a mid to longer term
perspective, the solidity of our installed base is demonstrated by a
very high recurrence. The trust of our innovation partners will help us
to compensate for a slow start in the Services business. In this early
part of the fiscal year, we continue to confidently and rigorously roll
out our plan to create sustainable and lasting value for all our

Licensing, the mainstay of the ESI Group’s business model, accounted for
76% of total revenue this quarter. License sales in the first three
months of the fiscal year1 were up 5.6% to €20.1 million. The
dynamic performance of our installed base (representing 79% of the
Licenses business) was driven by renewals and additional volume, with a
repeat business rate of 89.4%. Note that perpetual licenses sales
decreased by €1 million vs. the same period last year, another indicator
of long-term sustainability and the increasing efficacy of our strategy
to focus on annual rental licenses with high renewal rate.

Services, representing 24% of total revenue, include studies for
industry, advanced application research and R&D and also training.
Revenue for this business line came out at €6.5 million (down 9.9% year
to year). This does not reflect the number of important projects
confirmed in the period These include the multi-year agreement signed
with EDF for high value-added engineering studies related to design and
maintenance of nuclear power plants a 6 year contract with the option to
extend for a further 4 years.

In a geographical mix where Europe and Asia represent 82% (43% and 39%,
respectively) of quarterly sales, revenue in the Americas region picked
up amplified by a currency effect, and driven by license sales,
especially in the aeronautical industry.

Upcoming events

Combined General Meeting

July 18, 2019

    Half Year Sales and Results

September 19, 2019

    Q3 19

November 19, 2019

About ESI Group

ESI Group is a leading innovator in Virtual Prototyping software and
services. Specialist in material physics, ESI has developed a unique
proficiency in helping industrial manufacturers replace physical
prototypes by virtual prototypes, allowing them to virtually
manufacture, assemble, test and pre-certify their future products.
Coupled with the latest technologies, Virtual Prototyping is now
anchored in the wider concept of the Product Performance Lifecycle™,
which addresses the operational performance of a product during its
entire lifecycle, from launch to disposal. The creation of a Hybrid
Twin™, leveraging simulation, physics and data analytics, enables
manufacturers to deliver smarter and connected products, to predict
product performance and to anticipate maintenance needs.

ESI is a French company listed in compartment B of NYSE Euronext Paris.
Present in more than 40 countries, and addressing every major industrial
sector, ESI Group employs about 1200 high-level specialists around the
world and reported annual sales of €139 million in 2018.

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1 Exceptionally, 11-month financial year ending on
31/12/2019, subject to the approval of the AGM meeting on 18 July 2019;
Q1 reported here covers February, March and April of our traditional 12
months fiscal year