SII : Annuel financial report 2021/2022

Annual financial report

2021

2022

10 500

EMPLOYEES

4 CONTINENTS

18 COUNTRIES

76 LOCATIONS

OUR SECTORS

# a c k n o w l e d g e m e n t

With an average of 9,434 employees in fiscal 2021-2022, the SII Group posted consolidated revenue of €828.9m and generated net income of €59.4m.

We wish to thank our entire staff for making this performance possible. We owe our success to their technical and human skills, their professionalism, their trust, their creativity and their ability to work together and in good spirits at providing our customers with continually improved services.

On behalf of our entire staff, we also wish to thank our customers who, year in and year out, give us the opportunity to devise solutions with a high value-added for use in their future activities. Acknowledging this represents an encouragement and a powerful generator of energy and enthusiasm for our teams.

Participation in the development of new technologies

It is essential for companies to continually create and develop new services and products, or to devise innovative manufacturing processes.

Businesses are also constantly seeking to incorporate new technologies into their information systems.

These tasks require them to rely on increasingly advanced and diversified expertise, which they can only find through outsourcing.

Firms that do business with us are looking for specialised partners capable of contributing to their ongoing innovation efforts. This has been SII's field of expertise since its inception and represents know-how that generates most of the Group's revenue.

This document is a full free translation of the original French text. In case of discrepancies, the French version shall prevail.

SII - Annual financial report 2021-2022

1

A talk with M. Eric Matteucci

Chairman of the Management Board

What is your analysis of your results?

This financial year marked a milestone for the group. At the end of the last financial year, the uncertainties related to the COVID-19 health crisis and the resulting economic crisis were still present. Despite these circumstances, we decided to be optimistic and announced organic growth of 10% accompanied by an improvement in the operating margin. Our results for the 2021-2022 financial year far exceeded our expectations.

We achieved organic growth of 27% and an operating margin of 9.5%, the strongest performance of the past decade.

This performance was driven by dynamic activity in all sectors where the SII group operates and also in all countries where it is present.

In France, the turnover reached €383.4 million, a 21.5% increase. Aeronautics-Space-Defence, Banking-Insurance- Mutuals, and Telecommunications remain the top three contributors to turnover in this area. The operating margin rose to 7.0%, an improvement fuelled in particular by a better rate of activity.

The financial year ended with a 31.5% increase in international turnover to €445.5 million. Poland, which contributed more than half of the international turnover, posted growth of 36%. In Spain, business picked up significantly (+28%), Germany ended the year with a small increase (+1%), and all the other countries, with a total turnover of €63.1 million, were up by more than 40%. The operating margin was 11.7%, up from 8.9% a year earlier. All the countries contributed to the overall improvement.

This solid performance was accompanied by a vigorous hiring spree. The SII group reached the announced goal of 4,500 recruitments over the financial year. As of March 31, 2022, the SII group had more than 10,300 employees. In France and throughout the world, the SII group remains focused on pursuing its ambitious employer brand strategy to promote the well-being and performance of its employees.

The group's operating result reached €79.1 million, which is close to the best performance in the sector.

This performance is explained by the improved TACE (rate of activity excluding leave) and the continued positive effects of the organisational overhaul of the SII group. After taking into account the financial result and taxes, the net result was €59.4 million. At March 31, 2022, the balance sheet showed a net cash position (excluding IFRS 16) of €128.6 million, compared with €88.4 million at the end of March 2021. Shareholders' equity stood at €219.1 million compared with €180.9 million a year earlier.

Do you consider the crisis to be over?

If someone had asked me that question halfway through the financial year, I would have felt that the situation seemed difficult but under control. The health situation is still experiencing successive rebounds, and the economic situation is becoming more complicated, especially with fears about interest rates.

The outbreak of the military conflict in Ukraine on February 24, 2022 has seriously deteriorated the overall situation. It is a very complex period right now with many stressful factors. In particular, the conflict has had a significant impact on energy prices and, beyond that, concerns about a possible more or less partial shortage. There are also concerns about the supply of certain agricultural products. In this context, inflation has reached a level not seen for several decades around the world. Central banks are trying to minimise the situation by raising interest rates.

All these negative factors for the development of the economy come on top of others that were present before. Given this context, we can't have any certainty about the entire financial year just beginning. In theory, we have a growth advantage associated with our past performance, but beyond the first few months of the year, visibility is reduced.

The crisis - or rather the health, economic, and geopolitical crises are very present at the beginning of this financial year, and we will have to be particularly agile and reactive to "navigate" through this storm. The very positive climate was short-lived.

2	SII - Annual financial report 2021-2022

In this environment, what is your goal for the 2022-2023 financial year?

We wanted to remain cautious in our announcements. At the presentation of our annual results on June 8, 2022, we set out our ambitions for the first half of the new financial year. We should be able to deliver double-digit revenue growth and maintain an operating margin of between 9% and 10%. Beyond this first half of the year, all the uncertainties related to the context mean that there is too little visibility to make any commitments. We will adjust our annual plan as we go along.

The context is very particular with undeniable sectoral optimism. The latest forecasts for our sector for 2022 were just adjusted upwards by Numeum, our trade association, in their announcement at the beginning of July 2022. With a sectoral growth forecast of 7.4%, this would mark another year of exceptional growth for our profession. On the ground, we don't see a marked slowdown in demand. The main difficulty remains our ability to increase our workforce.

We can't completely disregard the global environment in which we operate. Our industry depends to a large extent on our clients' investments. Inflation, rising interest rates, and changes in energy costs are increasing the cost of projects, and trade-offs may be required.

With your available cash, are not you able to participate in the concentration of the sector?

We have a history of organic growth, and our performance in this area is well established. We have no plans to radically change our strategy.

Eric Matteucci

We can supplement our organic growth with strategic acquisitions for the group's development. For example, the acquisition we made this year strengthened our presence in Belgium. In the process, we expanded our know-how and client portfolio.

Our strategy remains the same for our external growth operations. If the opportunity arises to strengthen a geography or a sector to conquer, we can take an in-depth look at such opportunities.

ESG criteria are becoming more and more important for investors. Do you think you can meet the expectations?

We have been working on these issues for a long time, and we strengthened our resolve even more this year. Just to give you two examples:

Our Great Place To Work initiative for all group subsidiaries illustrates part of our commitment. Working with our employees to create an environment conducive to their well-being at work is an essential component of our strategy.

In addition to all our actions to reduce the footprint of our activities, we have launched a major eco-design awareness plan to allow us to provide concrete answers to our clients' requests. A major training plan will be implemented in the new financial year to enhance the knowledge of our consultants on this subject.

Beyond these two examples, chapter 3 (Non-Financial Statement) of this Annual Financial Report details all the concrete elements of our commitment. We must, of course, continue and expand our actions.

SII - Annual financial report 2021-2022

3