Sopra Group: Earnings Rise Sharply in 2006 to Reach an Operating Margin of 8.4%, a One Point Increase

Sopra Group (Paris:SOP):

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Change

2006 2005 (%)
-------------------------------------------- ---- ------ ------ ------
Key income statement items
----------------------------------------------------------------------
Revenue MEUR 897.7 757.0 +18.6%
Profit from recurring operations MEUR 75.0 56.1 +33.7%
as % of revenue % 8.4% 7.4%
Net profit MEUR 44.2 35.3 +25.2%
as % of revenue % 4.9% 4.7%
-------------------------------------------- ---- ------ ------ ------
Data per share
----------------------------------------------------------------------
Basic net earnings per share(1) EUR 3.86 3.25 +18.8%
Fully diluted net earnings per share(2) EUR 3.78 3.18 +18.9%
-------------------------------------------- ---- ------ ------ ------
Financial ratio
----------------------------------------------------------------------
Net debt / Equity % 45% 69%
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At 8.4%, an increase of one point compared to 2005, Sopra Group's
2006 operating margin from recurring operations was in line with the
improvement target for the year. Net profit attributable to the Group
and profit from recurring operations increased respectively by 25.2%
and 33.7% compared to the previous year.

This surge in earnings was achieved on the back of strong revenue
growth(3), amounting to 18.6% overall and including an organic growth
component of 8.5%.

"We are very pleased with our performance in 2006, a year in which
we were able to combine strong growth with considerable improvement in
our operating margin," said Pierre Pasquier, Chairman and CEO of Sopra
Group. "We also successfully integrated our 2005 and 2006 acquisitions
in the United Kingdom, Spain and the United States. By generating a
third of our revenue outside France, Sopra Group now enjoys a very
significant international presence."

In addition, the Group has continued efforts, begun in 2005, to
transform its core business and its production system, the results of
which have already had a positive impact in 2006. Pierre Pasquier
commented: "This transformation process is ongoing and we should see
further amplification of its benefits in the coming years, thus
contributing to the success of 2010 Project".

Information by division

-- Consulting (Orga Consultants): penalised by recruitment
difficulties during the year, the operating margin from
recurring operations slipped to 9.8% and provides ample room
for improvement in 2007, as the year already holds great
promise for business growth, particularly in the Banking and
Insurance sectors.

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Full Year Full Year
(EUR millions) 2006 2005
--------------------------------------------
Revenue 41.0 100.0% 41.3 100.0%
Profit from recurring operations 4.0 9.8% 5.0 12.1%
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-- Systems & Solutions Integration France: following a strong
return to growth in the fourth quarter, the operating margin
from recurring operations improved by one point to 8.4%, due
in particular to better use of resources and enhanced
productivity in project management. Demand remains robust and
should sustain growth in 2007. Margin improvement would mainly
come from the industrialisation of production methods as well
as the success of the Group's industry application solutions.

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Full Year Full Year
(EUR millions) 2006 2005
------------------------------------------
Revenue 535.7 100.0% 504.7 100.0%
Profit from recurring operations 45.0 8.4% 37.5 7.4%
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-- Systems & Solutions Integration Europe: the success of
acquisitions completed in 2005 in the United Kingdom and in
Spain is reflected in the clear improvement in the operating
margin from recurring operations, which increased by 3.2
points to 7.0% from 3.8% in 2005. Except for the Belgian
subsidiary, whose performance fell short of targets, all
European entities contributed to this improvement. This
positive trend is expected to continue in 2007.

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Full Year Full Year
(EUR millions) 2006 2005
------------------------------------------
Revenue 204.1 100.0% 125.5 100.0%
Profit from recurring operations 14.2 7.0% 4.8 3.8%
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-- Axway achieved an excellent performance in 2006 highlighted by
organic growth of +16.2%. The operating margin from recurring
operations of 10.1% includes the costs for the integration of
US-based Cyclone Commerce, acquired in January 2006, and
reflects the return of this entity's own operating margin to a
level comparable to that of Axway. The continued development
in the offer and the complete integration of its products
enables Axway to take position as one of the world leaders in
its market. Moreover, the pending acquisition of the B2B
business of Atos Origin in Germany, which is due to be
finalised in early March, is expected to make its own
contribution to the continued improvement in Axway's
performance.

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Full Year Full Year
(EUR millions) 2006 2005
-------------------------------------------
Revenue 116.9 100.0% 85.5 100.0%
Profit from recurring operations 11.8 10.1% 8.8 10.3%
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Financial position

The Group generated free cash flow(4) of EUR 71.2 million, an
increase of 84% compared to the previous year. Net debt amounted to
EUR 97.7 million, due principally to cash outflows related to the
acquisition of Cyclone Commerce. At 31 December 2006, the financial
position was healthy, as represented by a ratio of net debt to gross
operating profit of 1.15 and a gearing (net debt to equity) ratio of
45.2%.

Dividend

A proposal will be brought to vote by the Annual General Meeting
to pay a dividend of EUR 1.35 per share for financial year 2006,
compared to the dividend of EUR 1.10 per share paid for 2005.

Outlook

On the basis of currently available data, Sopra Group is confident
that organic growth in 2007 will be in line with that of the market,
and observes that this growth should be stronger during the second
half of the year. The Group maintains its commitment to improving the
operating margin as well.

Upcoming events

-- Wednesday, 2 May 2007, following the market close: Publication
of 1st quarter 2007 results.

-- Friday, 8 June 2007 at 2:30 pm: Annual General Meeting at the
Hotel Meurice in Paris.

About Sopra Group (www.sopragroup.com)

A leader in the European consulting and IT services market, with a
total workforce of 10,000, Sopra Group provides the full spectrum of
services enabling companies to transform their organisations and their
information systems. Sopra Group is a total solution provider, from
prior strategic reflection from an executive management perspective,
through to the supervision and implementation of major systems
integration and application outsourcing projects. Through its
subsidiary Axway, the Group pursues the worldwide deployment of its
activities in both application integration and collaborative business
solutions, with a complete range of solutions and services.

Appendices

-- Consolidated income statement(5)

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31/12 31/12
2006 2005
============================================ ============ ============
MEUR % MEUR %
-------------------------------------------- ------- ---- ------- ----
Revenue 897.7 100% 757.0 100%
-------------------------------------------- ------- ---- ------- ----
Staff costs - Employees -582.6 -502.0
Staff costs - Contractors -71.0 -56.3
Operating expenses -156.3 -130.6
Depreciation, amortisation and provisions -12.8 -12.0
-------------------------------------------- ------- ---- ------- ----
Profit from recurring operations 75.0 8.4% 56.1 7.4%
-------------------------------------------- ------- ---- ------- ----
Other operating income and expenses -1.1 -
-------------------------------------------- ------- ---- ------- ----
Operating profit 73.9 8.2% 56.1 7.4%
Net financial expense -7.7 -3.9
Corporate income tax -22.0 -16.9
-------------------------------------------- ------- ---- ------- ----
Net profit 44.2 4.9% 35.3 4.7%
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-- Change in net debt

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In millions of euros 2006 2005
-------------------------------------------------------
Net debt at beginning of period (A) 128.7 58.9
------------------------------------------------------- ------ -------
Cash from operations before changes in working capital 88.6 66.6
------------------------------------------------------- ------ -------
Income taxes paid -1.3 -14.2
Changes in working capital requirements 3.0 -1.3
------------------------------------------------------- ------ -------
Net cash flow from operating activities 90.3 51.1
------------------------------------------------------- ------ -------
Net cash used in investing activities -13.1 -8.5
Net interest paid -6.0 -3.9
------------------------------------------------------- ------ -------

Free cash flow 71.2 38.7
------------------------------------------------------- ------ -------
Impact of changes in consolidation scope -25.6 -103.2
Dividends paid -12.6 -8.6
Capital increases in cash 0.6 4.1
Application of IAS 32/39 - -1.0
Other changes -2.2 -
------------------------------------------------------- ------ -------
Total net change for the period (B) 31.4 -70.0
------------------------------------------------------- ------ -------
Effect of foreign exchange rate changes (C ) -0.4 0.2
------------------------------------------------------- ------ -------
Net debt at period-end (A-B+/-C) 97.7 128.7
------------------------------------------------------- ------ -------
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-- Consolidated balance sheet

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31/12 31/12
MEUR 2006 2005
====================================================== ======= =======
Goodwill 278.6 242.2
Other fixed assets 37.6 35.3
Other assets and liabilities 15.7 50.7
------------------------------------------------------ ------- -------
Assets 331.9 328.2
------------------------------------------------------ ------- -------

Equity 216.2 185.3
Provisions for contingencies and losses 18.0 14.2
Net debt 97.7 128.7
------------------------------------------------------ ------- -------
Capital invested 331.9 328.2
------------------------------------------------------ ------- -------
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-- Change in equity

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MEUR
============================================================== =======
Position at 31 December 2005 185.3
-------------------------------------------------------------- -------
Dividends - 12.6
Net profit - Group share 44.2
Capital increase through exercise of share subscription
options 0.6
Share-based payments 0.6
Translation adjustments - 1.9
-------------------------------------------------------------- -------
Position at 31 December 2006 216.2
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(1) Calculated on the basis of the weighted average number of
ordinary shares in circulation.

(2) Calculated on the basis of the weighted average number of
ordinary shares that would be issued on the conversion into ordinary
shares of all dilutive potential ordinary shares resulting from the
exercise of share subscription options held at the end of the
financial year.

(3) See the press release dated 12 February 2007.

(4) Cash flow from operations less net interest expense and
corporate income tax paid, change in working capital requirements and
operating investments net of disposals.

(5) Newell & Budge in the United Kingdom has been consolidated
since 1 July 2005; PROFit in Spain has been consolidated since 1
November 2005; Cyclone Commerce in the United States has been
consolidated since 1 January 2006.