SOURCE: INGENICO

March 20, 2007 16:16 ET

INGENICO: RESULTS FOR 2006: TARGETS SURPASSED

NEUILLY SUR SEINE, FRANCE -- (MARKET WIRE) -- March 20, 2007 --

Revenue: EUR 506.2 million (+ 17.5 percent*)

Profit from operations: EUR 33.1 million (+ 304 percent)

Net profit: EUR 16 million (+ EUR 56.1 million vs. 2005)

Net debt/equity: 0.22

A- RESULTS FOR THE YEAR

INGENICO S.A. has published its results for the year ended December 31, 2006, presented in accordance with IFRS.

Key figures

+-------------------------+--------+--------+------------+
|(in millions of euros)   |   2005 |   2006 |  Variations|
+-------------------------+--------+--------+------------+
|Revenue                  |   436.9|   506.2|      + 69.3|
+-------------------------+--------+--------+------------+
|Profit from ordinary     |     8.2|    33.1|      + 24.9|
|activities               |        |        |            |
+-------------------------+--------+--------+------------+
|% of revenue             |    1.9%|    6.5%|            |
+-------------------------+--------+--------+------------+
|Other income/(expenses)  |  (42.6)|   (1.9)|      + 40.7|
+-------------------------+--------+--------+------------+
|Net finance costs        |   (3.3)|   (7.8)|       (4.5)|
+-------------------------+--------+--------+------------+
|Net profit               |  (40.1)|    16.0|      + 56.1|
+-------------------------+--------+--------+------------+
|Earnings per share       |  (1.35)|    0.54|        1.89|
+-------------------------+--------+--------+------------+
|Shareholders’ equity     |   101.3|   146.9|      + 45.6|
+-------------------------+--------+--------+------------+
|Net debt                 |  (63.5)|  (33.0)|            |
+-------------------------+--------+--------+------------+
|Net debt/equity          |    0.62|    0.22|            |
+-------------------------+--------+--------+------------+
In 2006, thanks to efforts made by INGENICO to turn operations around, the Group delivered on its promises:

- Unprecedented business growth

- Major improvement in margins and a return to net profits

- Significant paydown of debt and strong cash-flow generation.

(*) On a like-for-like basis.

Unprecedented business growth

INGENICO earned revenue of EUR 506.2 million in 2006, up 17.5 percent versus 2005 (EUR 436.9 million*). This remarkable increase—which far outpaced that of the market—underscores the Company's dynamic performance. In 2006, INGENICO was able to capitalize on high growth in markets around the world, particularly Latin America, Northern Europe, Italy and Spain, as well as in Canada, where migration to the international EMV standard (1) fueled replacement or first-time purchases of terminals. Enhanced product mix also contributed to growth, as new, high-performance wireless terminals were launched.

This specific category now accounts for 15 percent of terminal sales versus 6 percent in 2005.

MoneyLine, consolidated as of November 1, 2006, contributed EUR 6 million to sales.

Major improvement in profit from operations

The Company greatly exceeded its profit margin target of at least 5 percent in 2006, with profit from operations totaling EUR 33.1 million or 6.5 percent of revenue.

This improvement of close to 304 percent over last year can be primarily attributed to the following factors:

- Sales growth

- Higher gross margin

- Leverage through greater control over operating costs.

The increase in gross margin was made possible by efforts initiated in 2005 to improve product quality while scaling back indirect costs—mainly freight costs. It is worth noting that the Company managed to achieve these results while undertaking a thorough overhaul of its production operations that led to the selection of three industrial partners worldwide. To a lesser extent, the higher gross margin was attributable to the programs initiated in 2006 to lower the cost of producing the Company's best-selling products. Those programs began to pay off during the second half of the year.

Operating expenses showed almost no change in relation to 2005, a notable achievement considering that, over the first six months of the year, operating expenses rose by 10 percent in absolute terms. The full impact of the cost-savings programs initiated in 2005 and completed in the first half of 2006 was felt as of the second half of the year.

As a result, profit from operations was equal to 6.5 percent of revenue in 2006—5.8 percent in the first half and 7.3 percent in the second half.

Return to net profit

Net profit was EUR 16 million, equal to 0.54 euros per share, versus a net loss of EUR 40.1 million in 2005, or - 1.54 euros per share.

Expenses to be deducted from profit from operations totaled EUR 17.1 million, including non-recurring expenses for a net amount of -EUR 1.9 million related primarily to the disposal of non-core businesses (Debitek, ITS and INGENICO Sweden) and restructuring.

Net finance costs amounted to EUR 7.8 million, including - EUR 3.9 million in coupon payments on the "OCEANE" convertible bond.

Income taxes were EUR 7.4 million, reflecting the Company's conservative approach to capitalizing loss carryforwards.

Debt reduction and higher operating cash flow

The Group reduced its debt by EUR 30.4 million, pushing net debt down from EUR 63.5 million in the previous year to EUR 33.1 million at December 31, 2006. First and foremost, this achievement reflects the Group's higher profits. Cash flow from operating activities totaled EUR 28.1 million, a figure EUR 52.4 million higher than in 2005. Over the same period, and although its business was expanding, INGENICO nonetheless scaled back working capital requirements by nearly EUR 10 million.

Also over the same period, shareholders' equity increased by EUR 45.6 million, chiefly due to higher net profit and the capital increase that resulted from the merger of MoneyLine with and into the Group last October 30th.

The ratio of net debt to equity is now 0.22 versus 0.62 at December 31, 2005.

B- OUTLOOK

For INGENICO, growth, positive earnings and deleveraging were the hallmarks of 2006. In 2007, the Group intends to make further progress in those areas.

This new year should once again offer INGENICO multiple opportunities for market success, both with new customers and through the successful launch of ACQUA, a new product designed for emerging countries.

The first quarter of 2007 should mark a return to the seasonality typical of our Industry. The Company expects strong growth in the second quarter, followed by sustained sequential growth during the second half of the year.

The Company is also expecting higher profit margins in 2007. With its cutting-edge technology and bright outlook for further market success, INGENICO is confident going into this new year of business. In light of the Company's return to profits, the Board of Directors will be asking the shareholders to approve a return to dividend payments at their Annual Meeting next May 10th (1).

(1) To be paid out of the share premium account, since net profit for the year will be appropriated to retained earnings, an account with an accumulated deficit.

INGENICO CEO Amedeo d'Angelo commented. "Thanks to the involvement and efforts of all our people, Ingenico has met and even surpassed the targets we announced. In less than 18 months, INGENICO has drastically revamped its production, its product offer and its processes, while maintaining its global and entrepreneurial culture. We take an ambitious view of the future and will therefore be maintaining our goal of making INGENICO the pivotal player in the secure transaction business."

+-------------------------+
|About INGENICO           |
+-------------------------+
|Throughout the world,    |
|businesses rely on       |
|INGENICO for secure and  |
|expedient electronic     |
|transaction acceptance.  |
|INGENICO products        |
|leverage proven          |
|technology, established  |
|standards and            |
|unparalleled ergonomics  |
|to provide optimal       |
|reliability, versatility |
|and usability. This      |
|comprehensive range of   |
|products is complemented |
|by a global array of     |
|services and             |
|partnerships, enabling   |
|businesses in a number of|
|vertical sectors to      |
|accept transactions      |
|anywhere their business  |
|takes them.              |
+-------------------------+
|www.ingenico.com.        |
+-------------------------+
+-------------------------+

Appendix

+-------------------------+--------------------+--------------------+--------+
|   in millions of euros  |2005                |         2006       |  Change|
+-------------------------+--------------------+--------------------+--------+
|  Revenue                |               436.9|               506.2|  + 69.3|
+-------------------------+--------------------+--------------------+--------+
|  Cost of sales          |             (298.8)|             (343.7)|  (44.9)|
+-------------------------+--------------------+--------------------+--------+
|  Gross profit           |Research and        |  Distribution costs|   138.1|
|                         |development expenses|                    |        |
+-------------------------+--------------------+--------------------+--------+
|                         |                    |                    |   31.6%|
+-------------------------+--------------------+--------------------+--------+
|  Gross profit           |Research and        |  Distribution costs|   138.1|
|                         |development expenses|                    |        |
+-------------------------+--------------------+--------------------+--------+
|                         |                    |                    |   31.6%|
+-------------------------+--------------------+--------------------+--------+
|  Gross profit           |Research and        |  Distribution costs|   138.1|
|                         |development expenses|                    |        |
+-------------------------+--------------------+--------------------+--------+
|                         |                    |                    |   31.6%|
+-------------------------+--------------------+--------------------+--------+
|  Administrative expenses|              (54.2)|              (54.2)|        |
+-------------------------+--------------------+--------------------+--------+
|  Profit from operations |                 8.2|                33.1|  + 24.9|
+-------------------------+--------------------+--------------------+--------+
|  Other income/(expenses)|              (42.6)|               (1.9)|  + 40.7|
+-------------------------+--------------------+--------------------+--------+
|  Net finance costs      |               (3.3)|               (7.8)|        |
+-------------------------+--------------------+--------------------+--------+
|  Income taxes           |               (2.5)|               (7.4)|        |
+-------------------------+--------------------+--------------------+--------+
|  Net profit             |              (40.1)|                16.0|  + 56.1|
+-------------------------+--------------------+--------------------+--------+
|  Earnings per share     |              (1.35)|                0.54|  + 1.89|
+-------------------------+--------------------+--------------------+--------+
Consolidated income statement for the year ended December 31, 2006

Changes in shareholders' equity

+-------------------------+--------------------+
|                         | in million of euros|
+-------------------------+--------------------+
|Balance at January 1,    |               101.3|
|2006                     |                    |
+-------------------------+--------------------+
|Profit for the period    |                16.0|
+-------------------------+--------------------+
|Merger with MoneyLine    |                31.2|
+-------------------------+--------------------+
|Capital increase (excl.  |                 2.1|
|MoneyLine)               |                    |
+-------------------------+--------------------+
|Share-based payment      |                 5.9|
+-------------------------+--------------------+
|Translation differences  |               (1.5)|
|and other adjustments    |                    |
+-------------------------+--------------------+
|Purchase of treasury     |               (8.1)|
|shares                   |                    |
+-------------------------+--------------------+
|Balance at December 31,  |               146.9|
|2006                     |                    |
+-------------------------+--------------------+
Key cash flow and net debt figures
+-------------------------+--------+--------+--------+
|In millions of euros     |   2005 |   2006 |  Change|
+-------------------------+--------+--------+--------+
|Cash flow from operating |  (24.3)|    28.1|  + 52.4|
|activities               |        |        |        |
+-------------------------+--------+--------+--------+
|Change in working capital|     1.4|     9.7|   + 8.3|
|requirements             |        |        |        |
+-------------------------+--------+--------+--------+
|Net cash flow from       |  (22.9)|    37.8|  + 60.7|
|operating activities     |        |        |        |
+-------------------------+--------+--------+--------+
|Investing activities (1) |   (5.5)|  (10.3)|   (4.8)|
+-------------------------+--------+--------+--------+
|Cash flow after investing|  (28.4)|    27.5|  + 55.9|
|activities (1)           |        |        |        |
+-------------------------+--------+--------+--------+
|Change in net debt       |  (22.0)|    30.4|        |
+-------------------------+--------+--------+--------+
|Net debt/equity          |    0.62|    0.22|        |
+-------------------------+--------+--------+--------+
(1) Investing activities: acquisitions of intangible assets and property, plant and equipment.
+-------------------------+
|About INGENICO           |
+-------------------------+
|Throughout the world,    |
|businesses rely on       |
|INGENICO for secure and  |
|expedient electronic     |
|transaction acceptance.  |
|INGENICO products        |
|leverage proven          |
|technology, established  |
|standards and            |
|unparalleled ergonomics  |
|to provide optimal       |
|reliability, versatility |
|and usability. This      |
|comprehensive range of   |
|products is complemented |
|by a global array of     |
|services and             |
|partnerships, enabling   |
|businesses in a number of|
|vertical sectors to      |
|accept transactions      |
|anywhere their business  |
|takes them.              |
+-------------------------+
|www.ingenico.com.        |
+-------------------------+
+-------------------------+

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