STORE ELECTRONIC SYSTEMS (SES)

• Operating income : 8 709 K€ (i.e. 33.5% of turnover), up 27.2%

• Profit after tax : 5 688 K€, at 21.9 % of turnover

• Organizational enhancements, in anticipation of faster growth in H2.

Turnover

H1 total sales amount to 25 983 K€, against 20 154 K€ during the same period in 2007 (+28.9%); growth was particularly strong in Q2 (+43.5%).
Globally over the 6 months period, the sharp increase in Export sales has continued with a turnover of 8 861 K€, up 55.9%. In France, turnover amounts to 17 122 K€, (+18.3%), with an acceleration of growth in Q2 (+36.3%); this can be explained by new regulations boosting competition among retail chains, combined with increased inflation. This context significantly increases the number of in-store price changes, further reinforcing the relevance of an electronic shelf labels system installation.

Profitability

At a level of 8 709 K€, the operating income for the first 6 months increased by 27.2% vs. H1 2007; it exceeds by nearly 13% the total operating income of FY 2006.
The EBIT margin is at 32.1% of turnover.
During the first half-year, the Company has also elected to proactively enhance its organization to cope with the expected acceleration of growth by year end. SES has thus selectively increased its headcount and has nearly tripled the capacity of its warehouse. Nevertheless, SG&A remain completely under control at 21.0% of turnover in H1 2008 vs. 22.5% in H1 2007.

Balance sheet

The Company has no financial debt; the cash position amounted to 10.0 M€ as of June 30 2008, against 8.6 M€ at the end of the first half of 2007.

Outlook

Between January 1st and August 8 2008, SES has recorded 499 new orders (+49%), slightly more than the entire installed base during FY 2007.
Store Electronic Systems won new competitive bids in South America, Italy and Spain, including in non-food.
This dynamic sales activity, combined with a more significant contribution of the Auchan roll-out agreement towards year end, should allow the Company to grow its turnover by at least 38% in FY 2008, with an EBIT margin in the vicinity of that of H1.
Longer term, the growing interest of major oil companies comes as an additional confirmation of the huge worldwide potential for ESL systems. Indeed SES has signed, in collaboration with a local partner, a first batch of 9 gas stations abroad under the BP, Esso, Tamoil, Texaco, and Total brands.

Q3 turnover will be published on November 13, 2008.

About Store Electronic Systems

Store Electronic Systems is one of the world leaders in Electronic Shelf Labelling Systems (EEG) for large-scale food and non-food retailers.
The global market for this reliable, high value-added product offers strong potential, in its deployment phase at the international level.

Store Electronic Systems is listed on the Compartment B of EuronextTM Paris .

Mnémo: SESL

ISIN codes: FR0010282822 - Reuters: SESL.PA - Bloomberg: SESL.FP

www.ses-esl.com
www.store-electronic-systems.com