The French IT services group announces a 40% internal growth in Q4 at the end of a year in which the overall performance was +33%. Without any acquisitions, this performance is to be set against a backdrop of sluggish markets, both in Western Europe and in the emerging areas where our group has offices. The growth of service expenses was less than 1% in France and Germany and less than 3% in Romania. Profitability has gone up faster than the sales figure (+42%), accounting for an increase in productivity while prices have remained the same.

Despite these solid fundamentals, the Group is witnessing a drop in orders coming from its small customers and reductions on certain projects. The budget of certain companies seems tight at the end of this year. Consequently, our profitability could also be affected, even though the sales figure of the group will continue its ascent in Q1 2011.

Commercially speaking, this strong increase in Q4 2010 is mainly due to the development of projects belonging to clients we gained in the previous years (farming). A new 2010 client has also increased its orders, doubling the volumes initially contracted (from 2010) and then quadrupling them (Q1 2011). Moreover, the group is launching two new operations in Germany. Two new French customers have also joined our portfolio.

As regards strategy, Pentalog has begun searching for cloud computing alliances through joint ventures. This operation has been entrusted to Invelia, a consulting agency in the field of strategy, mergers and acquisitions. An article on this topic will be published in the following days. The Pentalog incubator (Pentalabbs, www.pentalabbs.com) is fully operational and is already delivering results, as it supports a first start-up in which Pentalog has invested. Several technologies are also being studied, two of which could rapidly join the product portfolio of the group and could generate revenues as soon as 2011. A participation in several new companies could be announced in the following three months. As far as the R&D offer of the group is concerned, Pentalabbs confirms its status as an International Innovation Center, besides that of player in the IT services sector.