Capitalizing on our strengths and momentum to ratchet our ambitions up a notch

Cegid preserved its level of performance remarkably well in 2009. How do you explain this and what is your orientation for 2010?

Patrick BERTRAND
Chief Executive Officer

In 2009, we confirmed that our Group is strong and its strategy judicious. Our resilience did not come by accident. We were attentive, as we always have been, to striking the right balance between an ambitious, long-term strategy, based on product innovation and new sales and marketing practices, and rigorous management of our expenditures and investments. In 2009 we were also successful in preserving the Group's skills and in developing an appropriate human resources policy.

For 2010, we naturally plan to stay the course and apply the fundamentals of our strategy:

Be a specialist. Cegid is a specialized provider, not a generalist. Our objective is to offer our customers enterprise solutions tailored to their line of business. We have always taken the view that an IT system must adapt to the needs of the enterprise and not the reverse. This is possible only if the specificities of each business or sector are integrated at the software development stage. We listen to our customers, in particular through the ties we have developed with user clubs and professional conventions. This makes it easier for us to understand the challenges our customers face. Using this knowledge, we constantly adapt our solutions, in line with changes in each business segment.

Anticipate underlying market trends, by maintaining a constant and ambitious policy of research and innovation. Cegid has been making its applications available to customers in SaaS mode for several years. More and more companies, both large and small, now prefer this usage mode and its numerous advantages: availability, performance, security and minimal cost.

Propose solutions tailored to every size company. The entrepreneur who has just created a company does not have the same needs as a multinational firm. It has always been important for Cegid to reason in terms of each company's size. This approach leads to a pragmatic, efficient and powerful solution. We are convinced that companies will reject the "big bang" mentality when they change their information systems in the future. This is because the economic context demands a quick return on IT investments. Only agile, scalable solutions adapted to the user's line of business can help companies react flexibly to change and to the requirements of their environment.

What are Cegid's principal growth accelerators for 2010?

Apart from strengthening our fundamentals in the ways I have just described, we plan to intensify our efforts around four growth drivers that will increase Cegid's performance.

Develop the ecosystem, whose momentum is now starting to pay back our investment. Initiated in the last few years, the Cegid ecosystem and the application partnerships we have developed with other providers now enable us to offer our customers even more complete solutions. The ecosystem also teams us up with the market's largest integrators in the deployment of solutions requiring extensive customer support.
Finally, the relationship we have with the principal technology providers allows us to better anticipate changes in these crucial areas.

Accelerate our multi-channel sales strategy. Nearly 40% of sales to our new customers are now realized through the "indirect" and "influenced" sales channels. This network of carefully-selected resellers and partner-consultants and/or integrators efficiently complements our direct salesforce. We also plan to adapt the sales channel to the customer’s purchasing power or the type of product sold by intensifying development of our telesales teams. Finally, the B-to-B e-commerce portal "Cegid Store" and the Comptanoo portal, managed by our joint venture with Groupama, will add to our sales and marketing impact in 2010.

Strengthen our acquisition policy. This is central to our long-term investment strategy. Cegid has developed thanks to organic growth, supplemented by targeted acquisitions. We have made these acquisitions so as to strengthen our expertise in our various fields of specialization and to rapidly extend our installed base and as a result, our market share. In this way, the Manufacturing, Retail, CPAs and Hospitality vertical market suites and the Finance-Accounting functional area have been enriched by competencies that complement our original solutions. Acquisitions are an essential element of our Group's development and are especially important in a consolidating market. Cegid plans to maintain and develop this growth strategy in 2010.

Grow internationally. Apart from accompanying our French customers as they expand abroad, Cegid can now address essentially all companies in the Retail sector from its international offices. Supported by judicious local partnerships, this vector for expansion is now an essential component of our development strategy.

Cegid has made big strides over the last few years. What is the Group's ambition for tomorrow?

Even though we have had to deal with a very uncertain global economic context, and in all likelihood will have to continue doing so in 2010, Cegid was relatively protected from the consequences of the financial crisis. Over the last 10 years, the Group has done a remarkable job of structuring and strengthening itself through the application of a meaningful strategy. This is now paying off. Our sales and earnings more than doubled over the period.

For the future, we aim to pursue our development while maintaining the level of performance that has made us successful. Cegid is prepared to push the frontier much further out. Owing to our stable and ambitious shareholders and the talented, high-quality staff that the Group plans to develop and promote, we can do this. A new generation of users whose points of reference are very different is coming of age among our customers. We will have to remain attentive to them at all times. They can only encourage us to develop our inventiveness and creativity, the essential sources of innovation.

We will remain prudent yet confident in 2010, but most importantly we will seek higher rewards in the years to come, as we can combine the potential of new technologies with the essence of our role as a software provider to deliver solutions whose functionality and usage modes respond efficiently to the needs of our customers.