A- Results for the year

• Revenue: €506.2 million (+ 17.5 percent*)
• Profit from operations: €33.1 million (+ 304 percent)
• Net profit: €16 million (+ €56.1 million vs. 2005)
• Net debt/equity: 0.22

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

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.

Unprecedented business growth

INGENICO earned revenue of €506.2 million in 2006, up 17.5 percent versus 2005 (€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 €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 €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 €16 million, equal to 0.54 euros per share, versus a net loss of €40.1 million in 2005, or - 1.54 euros per share.

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

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

Income taxes were €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 €30.4 million, pushing net debt down from €63.5 million in the previous year to €33.1 million at December 31, 2006. First and foremost, this achievement reflects the Group's higher profits. Cash flow from operating activities totaled €28.1 million, a figure €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 €10 million.

Also over the same period, shareholders' equity increased by €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."

Read the consolidated statement here:Download the document now 92.2 kb (Adobe Acrobat Document)