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Store Electronic Systems Store Electronic Systems SA is a French company that manufactures and markets electronic shelf labeling systems for

food and non-food retail industries.

Business overview

SESL is a France-based company which designs and

markets electronic shelf labeling (ESL) systems for food

and non-food retail industries. An ESL is a system for the

display of product price, sales promotions, and other

information used by retailers to replace conventional paper

price tags.

SESL’s product is an automated system that broadcasts to

stores, by radio waves, messages for shoppers concerning

sale items. It allows real-time price displays, ensuring that

the price at the checkout and on the shelves is the same.

SESL’s solutions include store electronic systems,

electronic labels, software, radio and mounting systems. Its

systems are designed for every type of retail environment,

but most of SESL clients are hypermarkets, supermarkets,

and DIY stores.

Strengths and weaknesses

SESL is the leader in the ESL segment with over 40%

market share. Its technology is affordable and reliable, and

it has the highest R&D investments of the industry.

On the downside, its revenues rely heavily on the mass

retail market segment, and half of its income is generated

in France. Due to competitive pressures, its profits and

margins have declined over the past five years, despite an

increase in sales.

Growing competition from Pricer, Displaydata, Samsung,

Altierre, Teraoka Seiko and others is a threat that could

further compress SESL margins and reduce its market

share. Technological change is rapid in the ESL market,

and a failure to keep up could be detrimental to sales.

SESL:FP

Packaging Services 15-Jun-15

Last Price 11.06 EUR 52wk High 15.79 EUR 52wk Low 11.06 EUR Cash Dividend none Dividend Ex-Date none Shares Outstanding 11.62 M Market Cap 128.60 M EUR Shareholder’s equity (2014) 111.0 M EUR Long term debt (2014) 9.5 M EUR Annual Sales (2014) 81.2 M EUR Operating income (2014) 4.2 M EUR Operating margin (2014) 5.2 % Net profit (2014) 3.2 M EUR Net margin (2014) 4.0 % Earnings Per Share (ttm) 0.28 EUR

Sources: Bloomberg, SESL

Trends and outlook

Despite short-term uncertainties affecting the pace of

investment in the mass retail sector, the global ESL market

will benefit from medium-term development factors. These

include a growing frequency of price changes, higher labor

costs, the development of multichannel shopping, and the

need for in-store customer connectivity.

An expansion of ESL is therefore widely anticipated,

especially in the markets outside France where its

penetration is still low. ESL revenues are expected to

increase six-fold to almost USD2 BN between 2014 and

2019. In Europe, a return to growth is expected to lift the

retail market, making it possible for stores to invest in ESL.

To take advantage of these opportunities, SESL has

launched a five-year plan to improve its investments in

technology, its industrial competitiveness and its

international expansion. An important factor in its future

success will be the new capabilities it gained from the

Imagotag acquisition which it completed in 2014.


1

Table of Contents

Business overview .......................................................................................................................................................................... 2

Industry overview ............................................................................................................................................................................ 3

Industry outlook .............................................................................................................................................................................. 5

Competition .................................................................................................................................................................................... 6

Markets and clients ......................................................................................................................................................................... 8

Business outlook........................................................................................................................................................................... 11

SWOT analysis ............................................................................................................................................................................. 11

Financial overview ........................................................................................................................................................................ 12

Stock Price versus EPS ................................................................................................................................................................ 17

Financial data summary ................................................................................................................................................................ 18

Financial data ............................................................................................................................................................................... 19

Major shareholders ....................................................................................................................................................................... 25

Management ................................................................................................................................................................................. 25

Company history ........................................................................................................................................................................... 26

Corporate profile ........................................................................................................................................................................... 26

Company financial links ................................................................................................................................................................ 27

Company media center ................................................................................................................................................................. 27


2

Business overview

SESL manufactures electronic shelf labeling (ESL) systems for large-scale food and non-food retailers. SESL’s system

comprises a PC type manager which stores, encodes, organizes, and handles the data intended for the labels; a

buffer/transmitter and its antenna that communicates with the labels via low-frequency radio; a portable terminal equipped with a

barcode reader, which links the label to a product via its barcode; and autonomous electronic labels that display various

information to consumers. SESL also provides operating tools such as the Beeper, a remote control tool that could be used to

query the label on the shelf, in addition to training and support.

SESL’s product is an automated system that broadcasts to stores, by radio waves, messages for shoppers concerning sale

items. SESL is the first multi-technology player (LCD / TFT / E-paper) to have a 120 Dpi HD ultra-high resolution range with

dynamic display and a communicating NFC-tag. SESL's technological solution is known for its reliability, and the associated

running and maintenance costs are among the lowest in the sector. This reliability explains the success of SES with

independent retailers, who have fewer support structures and do not tolerate operating problems. SESL has developed specific

solutions for every type of retail environment, including hypermarkets, supermarkets, DIY stores, electronics stores, garden

centers, pharmacies and service stations.

SESL consolidated its leading position in 2014 with the acquisition of Imagotag, a strategic operation in both technological and

geographical terms. Imagotag is an Austrian retail technology start-up founded in 2010 which developed an ESL technology

based on ultra-low power high frequency wireless radio and E-paper displays. Shortly after inception, Imagotag won a large

scale roll out for Billa (Rewe Group) in Austria. In 2013, Imagotag conducted a number of successful pilot installations in some

of the largest retailers in German speaking countries and Central Europe, representing a high future deployment potential.

Today Imagotag has more than 1,000 installations in five countries, as well as a portfolio of ESL innovations under development.

SESL Locations

Logistics centers

Paris

Mexico

Hong Kong

Representative offices

Europe: France, Italy, Spain, Sweden, Germany, Austria

Americas: USA, Canada, Mexico

Asia: Singapore, Australia, Hong-Kong

Research centers

Paris: Headquarters, ESL Innovation center, mounting systems, radio

Hong-Kong : Design & methods

Graz : R&D Lab HF / E-paper

Source: Store Electronic Systems


3

Industry overview

An electronic shelf label is a system for the display of product price, sales promotions, and other information used by retailers to

replace conventional paper price tags. They are typically attached to the front edge of a retail shelf and use a liquid crystal

display or E-paper technology to display the information. The information displayed on an ESL is automatically updated

whenever a price is changed.

With the declining cost of liquid crystal and controllers, the introduction of new technologies such as E-paper, and a greater

interest in the environment and sustainability, an increasing number of supermarkets have started to use ESL. One of the major

driving forces behind the success of ESLs is the return on investment they offer to retailers. It is estimated that retailers will get

their full return on the investment they make on ESLs within 18 to 24 months from the implementation of these labels.

ESLs can be used to reduce the cost of printing labels. They also save staff time since employees can quickly change prices

from the office on multiple products without having to go to the shelves themselves to replace the labels. ESLs allow for the

constant update of product prices during time of day offers, where the offers change with the types of shoppers visiting the store.

Another advantage is the ability of retailers to perform dynamic pricing on certain products, such as fruit, based on stock levels

or even weather conditions. Retail businesses can also set up a network in which the POS system communicates with various

distributors. Using this communication system, stores can get the latest pricing and establish their product prices on margin.

The Digital Transformation of the Store



4

While ESLs bring a return on investment-based traditional brick and mortar bottlenecks, they also open the door to next

generation services and revenue opportunities. The future in retail will be a tightly integrated system that consists of ESL,

smartphone applications, Bluetooth Low Energy (BLE) beacons, indoor location, mobile payments, digital coupons/loyalty,

customer analytics, and omnichannel marketing and pricing.

Globally, 22,000 stores are equipped with ESL, of which 40% by SESL. Penetration is highest in France, where 7,000 stores

have ESL, one for each resident, and the technology has been used for about 12 years. The rest of Europe has been catching

up for the last four years. According to SESL competitor Pricer, Norway is emerging more and more as a leading market for

electronic price marking systems, together with France and Japan. In the rest of the world, the market is still in its infancy.


Adoption in the U.S. has been slow because the payoff is not yet sufficiently advantageous. So far, the department store chain

Kohl’s is the only major mass retailer in the U.S. that has adopted ESL technology, from American provider Altierre. American

grocery store managers have not embraced ESL technology because they worry that their sales will drop due to the drastic

change it will mean for shoppers who are used to seeing paper. However, the American market presents a great opportunity. In

the U.S., the average grocery store applied price changes to 10,000 items every week in 2013, putting 5,000 items on sale and

removing sale prices from another 5,000. Best Buy and Walmart are implementing price changes over 50,000 times per month.

When U.S. grocery store managers conduct price integrity audits and compare price labels on the shelves with the prices in the

store computer, paper labels are only 95% to 96% accurate, so the use of ESL presents a distinct advantage.


5

Industry outlook

There are currently about 250M electronic labels in the world. Sector analysts forecast more than a billion labels in store within

five years. ABI Research projects that the global ESL market will grow from USD268M in 2013 to USD1.7 BN by 2019. The ESL

adoption process is firmly underway: more than 200 mass retailers around the world are currently deploying systems, installing

pilot schemes or undertaking feasibility studies, a figure whose rapid growth is a leading sign of future expansion.

Despite short-term uncertainties affecting the pace of investment in the mass retail sector, the global ESL market is benefiting

from medium-term structural development factors. These include an increase in the frequency of price changes, higher labor

costs, the development of multichannel shopping, and the need for in-store customer connectivity.

Stores are under pressure from weak economic growth, price wars, and increases in cost on one hand, and growing competition

from the mainstream adoption of digital shopping channels on the other hand. Notwithstanding the rise of e-commerce, a 2014

survey by Displaydata showed that 83% of U.S. consumers and 78% of U.K. consumers still make most of their purchases in

stores. In sectors such as grocery, health & beauty, homeware and DIY in particular, bricks and mortar retail performs strongly,

as shoppers want to be able to see, touch and try items. To tap into the growing number of value-driven consumers, restore

their margins and position themselves at the center of multi-channel shopping, retailers are increasing the number of promotions

and price updates they are making.

A greater inclination towards dynamic pricing is another emerging trend in the retail market. Retailers implement more finely

tuned, reactive and customized price strategies and are turning towards more accurate price management to optimize costs and

stocks, and to reduce shortages and waste in fresh produce. The result is a higher frequency of price changes, which can be

achieved through ESLs without the errors that plague manual changes. Staff time can be dedicated to customer service instead

of changing price tags. This way, ESLs also provide a solution to the rising labor cost issue faced by many retailers across the

world.

Price remains a thorny issue for retailers when it comes to ESL investments. Some businesses overcome this problem by

selecting segment-based tags which cost about half as much as fully-graphical versions. Other retailers introduce fully-graphical

e-paper ESLs, but only across a very limited assortment. The latest-generation ESLs are still expensive, making the rate of

adoption uncertain in the short term. Some cost-driven end-users prefer to make large investments in low-cost ESLs rather than

in global brands. This reduces the sales potential and revenue of the global vendors in the market. The aggressive competition

that has developed can also lead to quality issues.

ESL vendors are witnessing a decline in their profit margins owing to the rise in prices of raw materials and increased

competition. They have to distinguish themselves through innovating products that meet the functional criteria of major

international markets, and allow multiple value-enhancing uses. SESL sees an increasing demand in the international market

and in non-food retail for e-paper, which is estimated to represent half of the ESL market within the next five years.


6

Competition

Store Electronic Systems and Pricer Comparison

Number of ESLs sold (M)

Number of clients

Number of countries

Number of employees

Adjusted Operating Margin

# 2014

Store Electronic Systems 120 100 52 220 8.0%

Pricer 110 200 50 83 2.7%

#Excluding non-recurrent expenses

Sources: Store Electronic Systems, Pricer

French SESL and Swedish Pricer (PRICB:SS) are the two major players in the global electronic shelf label space, dominating

traditional markets in Europe. The French convenience goods trade sector is the largest market for both companies, and they

compete directly for clients such as Intermarché, Carrefour, and Casino.

Sources: Store Electronic Systems, Pricer

Displaydata from the U.K. and Samsung from South Korean are the clear emerging threats, with Altierre achieving some

success in its native United States market, similar to Teraoka Seiko in Japan. There are also a number of localized start-ups

such as Hanshow in China that will add to the competition.


7

The main competitors in the ESL market are listed below.

SESL Competitors

EMEA Americas Asia-Pacific

Displaydata Advantech US CEST

ELTRADE Altierre E Ink

Herbert Retail Panasonic Hanshow

Opticon Tagnetics ILID

Pricer Texas Instruments LG Innotek

PriceWizard Mirador Marketing

UNO ESL NZ Electronic Shelf Labelling

Wincor Nixdorf Samsung

Teraoka Seiko

Toshiba Global Commerce Solutions

Wuxi Wei Feng Technology



8

Markets and clients

Over half of SESL revenue is generated in France, where sales grew by 10% between 2013 and 2014. French mass retail has

pioneered electronic labeling, but its penetration is low in the rest of the world. Expansion into the international market is

therefore crucial for SESL. It has built a presence in 52 countries through its own subsidiaries and representations and has 70

international partners. Its expansion efforts have paid off, and SESL international sales have doubled in the last three years.

In the Nordic zone, SESL revenues declined from EUR25 M to EUR9 M between 2013 and 2014 due to the end of a major

deployment undertaken in Norway in 2013. However, its international growth outside that zone was 31%, increasing to 62% if

the Imagotag acquisition is taken into consideration, which contributed EUR5.7 M to international revenue.


The year 2014 was difficult for the ESL market due to headwinds faced by the retail distribution sector. For SESL, there were

few large deals, but many new international pilot schemes, including the following countries: Denmark, Sweden, the

Netherlands, U.K., France, Italy Poland, Germany, Slovakia, Canada, USA, Mexico, Saudi Arabia, Taiwan and the Philippines.


9

SESL has now equipped over 9,000 stores with 120M ESL systems, and has distinguished itself by its capability for large-scale

deployment. SESL is the only player in the world with more than 1,000 stores within the same brand (Intermarché, the 23rd

worldwide distributor). Similarly, SESL equipped over 400 Carrefour hypermarkets and supermarkets globally, over 400

Système U, more than 300 Leclerc, and many other brands with over 100 stores installations.



10

SESL has 100 clients, of which 30% are in the global top 100. Most of its clients are in the food retail business, but the DIY and

garden segments are also represented, among others.



11

Business outlook

Electronic labeling demands real technological expertise, so the SESL potential in this market calls for rapid development in the

coming years. To structure the next phase of SESL’s development, a new strategic plan called “Leapfrog 2020” has been drawn

up covering the period from 2015 to 2020. Under this plan, SESL will improve its investments in technology, its industrial

competitiveness and its international expansion.

SESL intends to develop the value of its software by enhancing its ESL-based uses and applications. SESL aims for software

differentiation on high value-added business solutions to increase its industrial competitive edge. At the same time, it will offer

competitive pricing of ESL solutions through industrialization, using the cloud, and financing. SESL will also focus on developing

its network of international partners to optimize geographical and market-segment coverage. It will put in place specific OEM

partnerships for non-retail applications of very low-energy wireless autonomous digital display solutions, the need for which are

increasing in a number of areas, including logistics, industry, hospital, and construction.

The objective is to equip more than 20,000 stores with SESL digital solutions by 2020, thereby enabling them to improve their

margins on the one hand and to connect, know, guide, inform and assist more than 100M consumers at points of sale on the

other. The aim is to accelerate SESL’s average growth rate over 2015-2020 compared with the growth recorded in recent years

(+16% a year on average since 2010) and to generate over 75% of its sales outside France by 2020. At the same time, the plan

foresees a further improvement in operating profitability based on increased differentiation and scale effects both geographically

and at an industrial level. A substantial reduction in working capital requirements as a percentage of sales should help finance

SESL’s growth.

SWOT analysis

Store Electronic Systems SWOT Analysis

Strengths Weaknesses

Market leader with over 40% market share Lack of geographic diversification: half the revenue

is generated in France

Reliable and cheap technology High reliance on the mass retail market segment

Largest R&D investments in the industry Net income and margins have declined over the

past five years

Opportunities Threats

New capabilities from Imagotag acquisition Growing competition between ESL manufacturers

can lead to lower margins and reduced market share

Return to growth in Europe will lift the retail market, making it possible for stores to invest in ESL

Failure to respond effectively to rapid technological change could negatively affect sales and market share

Increasing competition and number of points of sale in the retail sector

Decline of brick-and-mortar retail businesses reduces customer base

Widely anticipated expansion of the international ESL market

Source: ESPR


12

Financial overview Due to a difficult environment in the mass retail sector, consolidated sales of EUR81.2 M (including Imagotag) for the full year of

2014 were virtually flat compared to 2013.




13




14

During 2014, operating income and net profit were affected by non-recurrent expenses related to the Imagotag acquisition.

SESL borrowed EUR4.5 M for this acquisition in May 2014, but still has a positive net cash position and a rating of C3++ from

the French Central Bank.




15

SESL’s core profitability improved in 2014 compared to the previous year. Core operating profit was up 5% at EUR6.5 M and

core EBITDA increased by 18% to EUR11.1 M (13.6% of sales). However, net income declined slightly year-on-year.




16

The development over the last few years shows an increase in sales but a decline in profits and margins. This is in part due to

competitive pressures. In particular major tenders by large distribution groups entail a decrease in the average sales price per

label, due to the volumes at stake.

Source: Euronext

Furthermore, the activities of SESL’s Asian subcontractors are labor-intensive. The structural inflation of fixed costs reflects the

rapid increases in labor costs and contributes to margin erosion. SESL manages this risk through a careful procurement policy,

which includes avoiding dependence on a specific provider when subcontracting assembly, and the management of large-

volumes purchases, which has a positive impact on the cost price. To limit margin erosion, SESL has also established long-term

relationship with its component suppliers, most of which are among the leaders in their sector, and therefore able to deliver

quality products and satisfy sudden surges in volumes.

Dupont Analysis

2009 2010 2011 2012 2013

Operating Margins 0.32 0.26 0.21 0.09 0.08

Net Margins 0.22 0.19 0.15 0.07 0.05

Asset efficiency 0.69 0.51 0.59 0.58 0.73

Financial Leverage 1.11 1.11 1.18 1.22 1.29

Return on Equity 16.75 10.59 10.04 4.56 4.29

Return on Assets 15.07 9.56 8.78 3.8 3.42

Source: Euronext


17

Stock Price versus EPS

Sources: Bloomberg, SESL


18

Financial data summary

Annual Financial data (EUR M, except per share items)

2010 2011 2012 2013

Product Sales 39 52 58 72

y/y growth -23% 35% 11% 25%

Services Sales 6 7 7 10

y/y growth -12% 30% -7% 43%

Total Sales 45 59 63 82

y/y growth -21% 32% 7% 31%

Cost of revenue 18 28 34 50

as % of Sales 40% 47% 54% 61%

Operating income 12 13 6 6

Operating margin 26% 21% 9% 8%

R&D 3 6 5 11

as % of Sales 6% 9% 7% 14%

SG&A 7 9 11 13

as % of Sales 16% 15% 17% 16%

Depreciation/amortization 2 2 3 3

Total operating expenses 32 46 57 76

Financial expenses 1 1 1 2

Net pre-tax income 12 13 6 6

Provision for income taxes 4 5 2 2

Tax rate 33% 33% 33% 33%

Net income 8 9 4 4

Net margin 19% 15% 7% 5%

Diluted normalized EPS 0.73 0.79 0.35 0.33

Sources: SESL, Euronext


19

Financial data

Annual Income Statement (EUR M)

2013 2012 2011 2010 2009

Total revenue 82 63 59 44 57

Cost of revenue total 50 34 28 18 24

Selling, general and admin. expenses, total 13 11 9 7 5

Depreciation/amortization 3 3 2 2 1

Unusual expense(income) 0 0 0 0 -0.01

Other operating expenses, total 10 9 7 5 9

Total operating expense 76 57 46 32 39

Operating income 6 6 13 12 17

Other, net -0.38 -0.08 -0.02 -0.01 -0.03

Net income before taxes 6 6 13 12 18

Provision for income taxes 2 2 5 4 6

Net income after taxes 4 4 9 8 12

Net income before extra. Items 4 4 9 8 12

Net income 4 4 9 8 12

DPS - common stock primary issue 0 0 0.5 0 0

Gross dividend - common stock (EUR) 0 0 5.5 0 0

Basic normalized EPS (EUR) 0.35 0.37 0.79 0.73 1.14

Diluted normalized EPS (EUR) 0.33 0.35 0.79 0.73 1.09

Sources: SESL, Euronext


20

Interim Income Statement (EUR M)

Jun 30 2014 Dec 31 2013 Jun 30 2013 Dec 31 2012 Jun 30 2012

Total revenue 40 47 35 32 31

Cost of revenue total 28 36 25 23 20

Selling, general and admin. expenses, total 7 7 7 5 5

Depreciation/amortization 2 2 1 1 1

Other operating expenses, total 0 -1 0 0 1

Total operating expense 37 43 33 30 28

Operating income 3 4 2 3 3

Other, net -0.28 -0.55 0.17 -0.12 0.04

Net income before taxes 3 3 3 3 3

Provision for income taxes 1 1 1 1 1

Net income after taxes 2 2 2 2 2

Net income before extra. Items 2 2 2 2 2

Net income 2 2 2 2 2

Basic normalized EPS (EUR) 0.19 0.2 0.15 0.18 0.19

Diluted normalized EPS (EUR) 0.18 0.19 0.14 0.16 0.19


21

Annual Balance Sheet (EUR M)

2013 2012 2011 2010 2009

Cash And Short Term Investments 22 25 34 36 21

Total Receivables, Net 24 26 22 13 16

Total Inventory 30 22 19 13 16

Prepaid expenses 0.65 0.56 0.29 0.12 0.26

Other current assets, total 0.34 0.25 0 0 0.09

Total current assets 77 73 75 62 54

Property, plant & equipment, net 2 2 1 1 1

Goodwill, net 16 16 16 16 20

Intangibles, net 21 18 14 12 8

Long term investments 0.39 0.28 0.23 0.21 0.12

Note receivable - long term 0 0 0 0 0.07

Total assets 117 108 107 91 83

Accounts payable 14 13 10 5 4

Accrued expenses 3 3 3 3 4

Other current liabilities, total 7 1 1 1 1

Total current liabilities 24 17 14 8 8

Other liabilities, total 2 2 2 1 0

Total liabilities 26 19 16 9 8

Common stock 22 22 22 22 22

Additional paid-in capital 0 0 0.08 0 19

Retained earnings (accumulated deficit) 70 66 68 60 33

Other equity, total -1.49 0.48 0.39 0.37 0

Total equity 91 89 91 82 74

Total liabilities & shareholders' equity 117 108 107 91 83

Total common shares outstanding 11 11 11 11 11

Treasury shares - common primary issue 0.06 0.05 0.01 0 0.01


22

Interim Balance Sheet (EUR M)


Cash And Short Term Investments 20 22 23 25 26

Total Receivables, Net 31 24 33 26 23

Total Inventory 32 30 25 22 20

Prepaid expenses 1.29 0.65 1.72 0.56 0.57

Other current assets, total 0.51 0.34 0.37 0.25 0

Total current assets 85 77 83 73 70

Property, plant & equipment, net 2.64 2.05 1.99 1.47 1.48

Goodwill, net 36 16 16 16 16

Intangibles, net 23 21 19 18 15

Long term investments 0.56 0.39 0.32 0.28 0.25

Total assets 148 117 121 108 103

Accounts payable 16 14 16 13 10

Accrued expenses 3.9 3.4 3.5 3.29 2.48

Notes payable/short-term debt 7.31 0 4.58 0 0

Other current liabilities, total 3.63 6.6 3.32 0.94 1.33

Total current liabilities 31 24 28 17 14

Total long term debt 6 0 0 0 0

Total debt 13 0 5 0 0

Deferred income tax 0.06 0 0.03 0 0.01

Other liabilities, total 7.69 2.37 2.38 2.11 2.1

Total liabilities 44 26 30 19 16

Common stock 23 22 22 22 22

Retained earnings (accumulated deficit) 80 70 68 66 64

Other equity, total -0.05 -1.49 0.61 0.48 0.39

Total equity 103 91 91 89 87

Total liabilities & shareholders' equity 148 117 121 108 103

Total common shares outstanding 11 11 11 11 11

Treasury shares - common primary issue 0.06 0.06 0.06 0.05 0.05


23

Annual Cash Flow (EUR M)

2013 2012 2011 2010 2009

Net income 3.85 4.09 8.7 7.96 12

Depreciation/depletion 2.91 2.11 2.75 1.89 1.54

Non-Cash items 2.13 2.35 4.27 3.61 0.59

Cash taxes paid, supplemental 1.23 4.01 4.13 3.72 0

Changes in working capital -4.23 -6.76 -12 3.21 -2.43

Total cash from operations 4.67 1.8 3.52 17 12

Capital expenditures -7.29 -5.87 -4.78 -1.89 -4.23

Other investing and cash flow items, total 0.26 0.32 -0.56 0.09 0

Total cash from investing -7.03 -5.55 -5.34 -1.8 -4.23

Total cash dividends paid 0 -5.49 0 0 0

Issuance (retirement) of stock, net -0.18 -0.43 0.04 0.2 0.14

Total cash from financing -0.18 -5.92 0.04 0.2 0.14

Foreign exchange effects 0.02 -0.03 0 0 0

Net change in cash -2.51 -9.7 -1.79 15 8.04

Net cash-begin balance/reserved for future use 0 0 0 0 13

Net cash-end balance/reserved for future use 0 0 0 0 21

Depreciation, supplemental 2.91 2.11 2.75 1.89 1.54

Cash taxes paid, supplemental 1.23 4.01 4.13 3.72 0


24

Interim Cash Flow (EUR M)


Net income 2.1 3.85 1.67 4.09 2.09

Depreciation/depletion 2.07 2.91 1.36 2.11 1.12

Non-Cash items 1.22 2.13 1.01 2.35 1.39

Cash taxes paid, supplemental 0.66 1.23 -0.01 4.01 2.8

Changes in working capital -9.34 -4.23 -6.7 -6.76 -4.92

Total cash from operations -3.95 4.67 -2.66 1.8 -0.32

Capital expenditures -3.29 -7.29 -3.68 -5.87 -2.43

Other investing and cash flow items, total -6.64 0.26 0.21 0.32 0.08

Total cash from investing -9.93 -7.03 -3.47 -5.55 -2.35

Total cash dividends paid 0 0 0 -5.49 -5.49

Issuance (retirement) of stock, net -0.07 -0.18 -0.08 -0.43 -0.4

Issuance (retirement) of debt, net 4.72 0 0 0 0

Total cash from financing 4.65 -0.18 -0.08 -5.92 -5.89

Foreign exchange effects -0.01 0.02 0.01 -0.03 0

Net change in cash -9.24 -2.51 -6.2 -9.7 -8.56

Depreciation, supplemental 2.07 2.91 1.36 2.11 1.12

Cash taxes paid, supplemental 0.66 1.23 -0.01 4.01 2.8


25

Major shareholders

SESL Major Shareholders

Chequers Capital XV 21.30%

Tikehau Capital Partners 15.01%

Pechel Industries III 7.10%

Bank of New York 6.00%

Sycomore Asset Management 5.10%

Phison Capital 5.00%

Edmond de Rothschild Europportunities 4.76%

Source: Euronext

Management

SESL Management Profiles

Title Name Description

CEO Thierry Gadou

Mr. Thierry Gadou has served as Chairman of the Board, Chief Executive Officer of SESL as of January 18, 2012. He is a graduate of the Mines de Paris engineering school. He began his career as a management consultant at international consulting firm Deloitte, where he was a partner from 1997 to 2000. He then co-founded and became president of Hubwoo, a high-tech company listed on the Euronext Paris stock exchange. Since 2007, he has been running Atos Consulting, the IT management consulting division of Atos.

CFO Pascale Dubreuil

Ms. Pascale Dubreuil is the Administrative and Financial Director of SESL as of April 2013. Following a Masters from Universite Paris IX Dauphine and an MBA from HEC, she began her career in 1991 within the LAFARGE group. Ten years later she joined the MATERIS group, an LBO spin-off from LAFARGE. At MATERIS, between 2001 and 2010, she successively held the positions of Chief Financial Officer and Head of Development for the Chryso Group, a company specializes in concrete and cement admixtures. Since 2011, Pascale had been CFO of the Zolpan group, a paint manufacturer and distributor, and a subsidiary of Materis Peintures.

COO Thierry Pollier

Mr. Thierry Pollier is the Chief Operating Officer of SESL as of 2012. He was previously the Manager of Atos Integration before becoming Executive Vice-President of the Atos group in France. Prior to this, he was a consultant at AT Kearney, then a partner at Deloitte and a co-founder of Hubwoo.

CTO Philippe Bottine

Mr. Philippe Bottine has served as Chief Technology Officer at SESL as of 2009. He started his career as a financial analyst at Viventures Inc. Based in the Silicon Valley, he participated in several investment projects in the Internet, software, wireless, networking and semi-conductor sectors. He was also involved in the commercial, technical and human resource development of several start-ups, working closely with their management teams. In 2007, he was appointed Chief Executive Officer of Manudem S.A.S. Mr. Bottine headed a team of 70 people and played an instrumental role in the company's international development. Since 2009, he has been in charge of all product development operations at SESL. He is a graduate of Ecole Centrale de Paris.

Source: Bloomberg


26

Company history

SESL History Highlights

1992 SESL was set up

1993

First hypermarket with 100% digital price display system

2000

1 million ESLs installed

2002

1st international contract

2005

SESL present in 10 countries

2006

SESL listed on the Paris stock exchange

2007

SESL enters Asia and Latin America

2011

SESL launches the G-tag and S-tag+ label ranges

2012

1st contract in North America

New products : G-tag+, NFC-tag, Jeegy 2.0

2014

SESL present in 52 countries

ISO 9001 certification

Acquisition of Imagotag


Corporate profile

SESL Corporate Information

Company Name Head Office

Store Electronics Systems SA 39 Rue de Montigny 95100 Argenteuil, France

Phone Listed on

+ 33-1-34-34-61-61 Euronext

Website Fiscal Year

www.store-electronic-systems.com January 1st to December 31st

IR Contact IR Company

Florent Alba NewCap

IR Mail IR Phone

[email protected] + 33-1-44-71-98-55



27

Company financial links

2014 results announcement

Semi-annual Report FH 2014

Annual Report 2013

Company media center

Press releases

Press clippings

Events

Videos

Sector Studies

News about SESL and the Sector

Date News Link

30-Mar-15 SES: des comptes contrastés en 2014

19-Mar-15 Top 5 Ways ESLs Can Address Brick-and-Mortar Disconnect

06-Feb-15 How NFC Plus Location Is Changing Product Distribution, Retailing

06-Feb-15 Store Electronic Systems: contrat avec Intermarché.

27-Jan-15 Data-Driven Personalization Drives Advanced Pricing Strategies

20-Jan-15 Store Electronic: Société Générale n'est plus à l'achat

19-Jan-15 Store Electronic Systems: chiffre d'affaires annuel de 81 ME

14-Jan-15 5 new technologies that may change how you shop

23-Dec-14 Nos cinq préférées parmi les valeurs moyennes

23-Sep-14 Hello, ESL Displays. Good Bye Paper Tags.

9-Feb-13 Digital Tags Help Ensure the Price Is Right

Sources: Various

http://www.actusnewswire.com/documents_communiques/ACTUS-0-39292-cp-store-electronic-systems_300315.pdf

http://www.actusnewswire.com/documents/ACTUS-0-5630-Rapport-Semestriel-2014.pdf

http://www.actusnewswire.com/documents/ACTUS-0-5420-SES-Rapport-annuel-2013.pdf

http://www.store-electronic-systems.com/en/actuality-page

http://www.store-electronic-systems.com/en/press-page

http://www.store-electronic-systems.com/en/event-page

http://www.store-electronic-systems.com/en/media-library?tid%5b0%5d=57

http://www.store-electronic-systems.com/en/media-library?tid%5b0%5d=60

http://www.boursorama.com/actualites/ses-des-comptes-contrastes-en-2014-ae4a9ca43d43b5bd663696396b048ff8

http://risnews.edgl.com/retail-news/Top-5-Ways-ESLs-Can-Address-Brick-and-Mortar-Disconnect98941

http://www.eweek.com/mobile/how-nfc-plus-location-is-changing-product-distribution-retailing.html

http://www.cerclefinance.com/default.asp?pub=valactu&isin=FR0010282822&art=408227

http://retailtouchpoints.com/features/special-reports/data-driven-personalization-drives-advanced-pricing-strategies

http://www.boursorama.com/actualites/store-electronic-societe-generale-n-est-plus-a-l-achat-9c8d5577f7a834dca7de92e1febd9cf3

http://www.cerclefinance.com/default.asp?pub=valactu&art=406457&localcode=

http://www.washingtonpost.com/news/business/wp/2015/01/14/5-new-technologies-that-may-change-how-you-shop/

http://bourse.lesechos.fr/infos-conseils-boursiers/dossier/la-bourse-riche-en-ambassadeurs-de-excellence-francaise-a-travers-le-monde/nos-cinq-preferees-parmi-les-valeurs-moyennes-1021868.php

http://www.solutionprovidersforretail.com/article/hello-esl-displays-good-bye-paper-tags

http://www.nytimes.com/2013/02/10/technology/digital-tags-help-ensure-that-the-price-is-right.html?_r=1


28

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