2006 business review

PART.01 | PART.02 | PART.03 |

Fermat: a good year and termination of the distribution agreement

Banks continued to prepare themselves for the introduction of the Bâle II Directive in 2007. With these projects now reaching their end, turnover from Fermat declined, as we had expected, but managed to stay ahead of our estimates thanks to the good progress of the implementation projects. New contracts were signed in 2006, notably with Vontobel, Europe’s largest mortgage bank. In 2006, turnover was €12.2m from €14.8m in 2005. The contract to distribute Fermat products expired on 31 December 2006, allowing us to concentrate on developing, integrating and marketing our own products.

As a result, GL TRADE sold the subsidiary that had distributed Fermat products, Ubitrade GmbH, to the Fermat group on 1 January 2007.

Profitability remains strong

GL TRADE consolidated its financial position through tight control of costs.

8% growth in current operating income

Current operating income, before amortization of intangible assets relating to acquisitions, came to €32.9m (including businesses to be sold), a margin of 17.8% of turnover. This margin was above 18% in the second half of the year. Thus the Group met the targets it had set itself.

Most costs are fully controlled. The number of employees rose from 1,083 in 2005 to 1,155 in 2006, an increase of 1% (excluding employees at Emos and Nyfix Overseas, which were acquired during the year).

However, legal costs increased due to our defense of our interests in the case of a patent registered by an American competitor in the field of derivatives.

Net income of €19.6m

The sale of our non-strategic holding in Bourse Connect in 2005, generating a capital gain of €8.2m, resulted in a sharp 33% rise in net income. This year, net income was 6% higher (excluding the Bourse Connect sale) at €19.6m.

Cash to back acquisitions policy

Net cash fell from €31.7m at end-2005 to €21.6m at end-2006. This change was due to a new €7m loan taken out to finance the acquisition of Nyfi x Overseas Inc, and the financing, from the Group’s own resources, of the Emos acquisition.

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