STORE ELECTRONIC

• EBITDA margin: 30.2% vs. 26.9% in 2005
• EBIT margin: 27.1%, significantly above the long term target announced at IPO (22.7%)
• Pre-tax profit: €7.2m, up by 45.6%
• Since the beginning of the year: 3 new roll outs and a 149% growth in booked orders

Business

As of 31 December 2006, consolidated sales came to €28.34m, up by 4.2% compared to 2005 (€27.19m). Recurrent business generated 27% of the Group’s sales (maintenance, restocking), while the remaining 73% came from new stores installation activities.

In France, turnover came to €24.13m, up by 25.6% compared to last year. 267 new stores were equipped compared to 175 in 2005 (+52.6%).

Exports sales came to €4.21m, down by 47% on base effect. As a reminder, Store Electronic Systems had a significant contract in 2005 with Carrefour Belgium. Excluding the Carrefour Belgium effect in 2005, exports sales for 2006 would be up by 54.7%. Outside France, 70 new stores were installed (118 in 2005 including Carrefour Belgium, 36 excluding).

Overall, 337 new stores (vs. 293 in 2005, +15%) were installed, in 23 different retail chains in 10 countries, allowing the Group to strengthen its European leadership, with a stronger footprint in the large scale food retailing segment, its priority target.

Profitability

Manufacturing costs reduction combined with very tight control of expenses, generated a significant improvement in EBITDA margin: 30.2% in 2006 compared to 26.9% in 2005.

The EBIT margin stood at 27.1%, 4 points above the long term target announced at IPO.
Pre-tax profit rose very strongly, up by 45.6% to €7.2m. Pre-tax profit was impacted by non-recurring costs of €0.4m recognised as expenses following the repayment of all the Group’s financial debt. Excluding this exceptional item, PBT would show an increase of 55%.

Balance sheet: strong cash position

As of 31 December 2006, the Group has no more financial debt. Store Electronic Systems enjoyed a strong cash position of €6.1m (vs. €8.7m in 2005). Excluding non-recurrent expenses (acquisition of shares for €2.4m of its subsidiary after the exercise of stock options by employees and earn-out of €4.1m), the net cash position would have reached €12.6m.

Outlook for 2007

The 2007 targets for Store Electronic Systems are in line with the long term growth prospects announced at IPO (2009 sales = 2004 sales X 6, or CAGR of 42 %, while maintaining operating profitability).
Furthermore, the net income will benefit from the healthy financial structure of the Group (no more financial debt).
Since the beginning of the year, the Group has won 3 additional major contracts on top of the 3 contracts already signed in September and October 2006.

• The first contract in the Americas (outside the US), resulting from the installation of a pilot store in 2005, concerns a framework agreement for installing the system in 200 superstores over 4 years, with a firm order for the installation of the first 50 stores in 2007. First installations will start at the beginning of April 2007.
• The second contract concerns the Provencia Group (a Carrefour franchisee), which operates 40 superstores and supermarkets under the Carrefour and Champion trade names. 6 stores were already installed with our system, or are being installed.
• The third is related to the installation of hypermarkets of Leclerc Group in the Western region of France, which represents more than 350,000 labels to be delivered in 2007. First installation will start at the end of March.

These new installations and the ongoing ones in major retail chains (particularly Intermarché, Leclerc, Monoprix, Système U…), have enabled Store Electronic Systems, from January 1st, 2007 to March 3rd 2007, to reach a new record level in terms of orders booked from new stores: it increased by 149%, to 127 from 51 in 2006 (l-f-l).

Q1 consolidated revenues will be published on May 15th, 2007.

About Store Electronic Systems
Store Electronic Systems is a leader in Electronic Shelf Labelling systems for large-scale food and non-food retailers. The global market for this reliable, high added-value product offers strong potential, with equipment currently being rolled out worldwide.

Store Electronic Systems is listed on the Eurolist market – Compartment B- on the EuronextTM stock exchange in Paris.
Mnémonic: SESL
ISIN Code: FR0010282822 - Reuters: SESL.PA – Bloomberg: SESL.FP

Please Contact
Thomas CHASSEPOT
Financial Director
Tél. : +33 (0)1 34 34 61 61
thomas.chassepot@ses-esl.com