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THE DIGITAL REVOLUTION

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Content

1. About ESI• Key figures

• A renown installed base worldwide in multi sectors

• The industrial transformation

2. A unique positioning • A global offer for Virtual Prototyping

3. Outlook and strategy• Strategic Value creator positioning

• The Hybrid Twin

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2016 Key Figures

40countries

1200people

18Million Euros

EBITDA

(+28%)

141Million Euros

annual revenues

(+13%)

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2016 Key Financial Figures

LicensesGrowth & Recurrence

Innovation & Co-creation

77%

Services

23%

16% 45% 39%

30%

141Million Euros

2016 annualrevenues

43 4349

58 62 66 69 70 7584

94

109 109 111

125

141

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Continuous growth

€m

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Sample Customer ReferencesGROUNDTRANSPORTATION

ALSTOM Transport

AUTOLIV

BMW GROUP

BOMBARDIER

CATERPILLAR

FAW VOLKSWAGEN

CONTINENTAL

DAIMLER AG

FAURECIA

FIAT / CHRYSLER

FORD

GENERAL MOTORS

GESTAMP

HONDA

HYUNDAI GROUP

ISUZU

JAGUAR LAND ROVER

MAN

MAZDA

MITSUBISHI MOTOR

PSA PEUGEOT CITROEN

RENAULT NISSAN

SIEMENS

SHANGHAI VOLKSWAGEN

TAKATA

TATA GROUP

TOYOTA MOTORS CORPORATION

VISTEON

VOLKSWAGEN GROUP

VOLVO GROUP

HEAVY INDUSTRY & MACHINERY

AP&T

ARCELOR MITAL

HONEYWELL

JOHN DEERE

NASA

UNITED TECHNOLOGIES

AEROSPACE

AIRBUS

ALCOA

AVIC

BOEING

BOMBARDIER

DASSAULT GROUP

EUROPEAN SPACE AGENCY

GENERAL DYNAMICS

GENERAL ELECTRIC

HONEYWELL

LOCKHEED MARTIN

NASA

NORTHROP GRUMMAN

PCC CORPORATE

ROLLS ROYCE

SAFRAN

TEXTRON AVIATION

THALES

GE POWER

IHI

ONET

ALFA LAVAL

SHELL

DOOSAN SKODA POWER

ENERGY & POWER

AREVACEA COMEX GROUPDAHEREDF GROUPEPRI

GOVERNMENT & DEFENCE

BAE SYSTEMS

BOEING

CEA

DCNS

DGA

FRENCH MINISTRY OF RESEARCH

GENERAL DYNAMICS

HUNTINGTON INGALLS INDUSTRIES

LOCKHEED MARTIN

OAKRIDGE NATIONAL LABS

RAYTHEON

U.S. NAVY

U.S AIRFORCE

U.S.ARMY

ELECTRONICS & CONSUMER GOODS

3M

APPLIED MATERIALS

BERTRANDT

HITACHI

LAM

LTD

HONDA

LG

NEC

SAMSUNG

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A global offer for Virtual Prototyping

Casting Composites Sheet Metal Forming Welding & Assembly

Virtual Manufacturing

Collaborative Decision-making

CFD & Multiphysics

Virtual Performance

Electromagnetics

Multi-Domain Simulation

Virtual Integration Platform

Virtual RealityVirtual Environment

Vibro-AcousticsVirtual Performance Solution

Virtual Seat Solution

Consulting Services

Engineering services

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The 4th Industrial Revolution

The internet

of things

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The context of change: Moore’s law

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A real revolution

Largest world taxi company

without cars

Largest world room renter

without real estate

Largest world phone company

without network

Fastest world growing bank

without money

Largest worldretailer

without shops

Largest world movie distribution

without cinemas

Largest world media company

without content

Biggest world SW company

not selling SW

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Industry Macro Trends: Challenges & Opportunities

• De-Carbonization

‣ Lightweight

• Automotive

• Aeronautics

• Etc

‣ Green

• Wind Turbine

• NPP

• Solar

• Etc

‣ ….

• Next (and present) Opportunity

‣ Digital Transformation

Immersive experience

Multi-domain platform

Single core model

Process chaining

Virtual material lab

Incremental innovation

Big data

Machine Learning

Systems Integration

Mobility

Disruptiveinnovation

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Accelerating Industrial Transformation

International Initiatives heralding the impact of ICT and IoT

Industry 4.0

Fourth industrial revolution for the virtualization of manufacturing

‘Industrie du futur’:Transform the industrial model by digital technology

‘Manufacturing 2025’: Transition from ‘made’ in China to ‘design’ in China

‘Innovate UK’:Innovation agency to drive the science and technology innovations

‘Horizon 2020’: Funding program to support and foster research

National Network for Manufacturing Innovation (NNMI) Improve US Manufacturing Competitiveness

ICT*: Information & Communication Technologies – IoT*: Internet of Things

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Virtual simulation of automated driver assistance

(ADAS)

Big data visual analytics and

machine-learning specialist

Renamed INENDI

Visual Analysis of Big Data

Technology to accelerate CAE delivery in the

Cloud

March 2015 April 2015 May 2015 Jan 2016 Feb 2016 Feb 2017

Realistic simulation

of mechatronic and multi-domain

systems

The technological inputs to a unique solution

Open Source Modeling Software

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A global offer for Virtual Prototyping

Casting Composites Sheet Metal Forming Welding & Assembly

Virtual Manufacturing

Collaborative Decision-making

CFD & Multiphysics

Virtual Performance

Electromagnetics

Multi-Domain Simulation

Virtual Integration Platform

Virtual RealityVirtual Environment

Vibro-AcousticsVirtual Performance Solution

Virtual Seat Solution

Consulting Services

Engineering services

Big data & Analytics

Cloud Solutions

Virtual Systems & Controls

Democratizing CAE

ADASInternet of Things

Data MiningCybersecurity

Systems & control

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Copyright © ESI Group, 2017. All rights reserved.

www.esi-group.com

Content

1. About ESI• Key figures

• A renown installed base worldwide in multi sectors

• The industrial transformation

2. A unique positioning • A global offer for Virtual Prototyping

3. Outlook and strategy• Strategic Value creator positioning

• The Hybrid Twin

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VIRTUAL PROTOTYPING

• Accurate predictions about assemblies, model chaining

• Replace real prototypes

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VIRTUAL REALITY

• Virtual engineering

• Virtual service

• Virtual build

• Virtual product

• Decision making

• Collaborate

Virtual Build

Virtual Engineering

Virtual Service

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SYSTEM MODELLING

• Virtual experiments of entire systems

• Conceptual representation without geometry modelling

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DATA ANALYTICS

• Data driven analytics

• Machine learning

• Build intelligence

To detect the Unknown in high dimensional data

• Coupling visualization, machine learning and human judgment to‣ Discover new insights

‣ Predict outcomes

‣ Prescribe actions with confidence

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SYSTEM MODELLING

• Virtual experiments of entire systems

• Conceptual representation without geometry modelling

VIRTUAL REALITY

• Virtual engineering

• Virtual service

• Virtual build

• Virtual product

• Decision making

• Collaborate

VIRTUAL PROTOTYPING

• Accurate predictions about assemblies, model chaining

• Replace real prototypes

DATA ANALYTICS

• Data driven analytics

• Machine learning

• Build intelligence

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SYSTEM MODELLING

• Virtual experiments of entire systems

• Conceptual representation without geometry modelling

VIRTUAL REALITY

• Virtual engineering

• Virtual service

• Virtual build

• Decision making

• Experience

• Collaborate

VIRTUAL PROTOTYPING

• Accurate predictions about assemblies, model chaining

• Replace real prototypes

DATA ANALYTICS

• Data driven analytics

• Machine learning

• Build intelligence

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SYSTEM MODELLING

• Virtual experiments of entire systems

• Conceptual representation without geometry modelling

VIRTUAL REALITY

• Virtual engineering

• Virtual service

• Virtual build

• Virtual product

• Decision making

• Collaborate

VIRTUAL PROTOTYPING

• Accurate predictions about assemblies, model chaining

• Replace real prototypes

DATA ANALYTICS

• Data driven analytics

• Machine learning

• Build intelligence

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SYSTEM MODELLING

• Virtual experiments of entire systems

• Conceptual representation without geometry modelling

VIRTUAL REALITY

• Virtual engineering

• Virtual service

• Virtual build

• Decision making

• Experience

• Collaborate

VIRTUAL PROTOTYPING

• Accurate predictions about assemblies, model chaining

• Replace real prototypes

DATA ANALYTICS

• Data driven analytics

• Machine learning

• Build intelligence

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SYSTEM MODELLING

• Virtual experiments of entire systems

• Conceptual representation without geometry modelling

VIRTUAL REALITY

• Virtual engineering

• Virtual service

• Virtual build

• Virtual product

• Decision making

• Collaborate

VIRTUAL PROTOTYPING

• Accurate predictions about assemblies, model chaining

• Replace real prototypes

DATA ANALYTICS

• Data driven analytics

• Machine learning

• Build intelligence

From PLM to PPL

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What makes the news!

Automotive:

▪ Fiat Chrysler recalls 570,000 SUVs for

fire risks (Dec. 2015)

▪ Ford recalls 451,865 cars for potential

fuel tank problem (Nov. 2015)

▪ Volkswagen diesel emissions scandal

(Sept. 2015), 8.5 million cars recalled

across Europe

In 2015, 100 million+ cars were

recalled in the US (NY Times), costing

automakers billions of dollars

• Mechanical recalls and now

Software recalls

Consumer:

▪ Samsung Galaxy Note 7 (August

2016)

• 2.5 million phones recalled after

battery fires

▪ Woman burnt on plane in headphone

explosion (March 15th, 2017)

• the lithium-ion batteries in the

device likely caught fire.

Aeronautics & Aerospace:

▪ FAA grounds Boeing's 787 Dreamliner

after battery fires (Jan. 2013)

▪ Qantas grounds A380

• Engine Failure (Nov. 2010)

• Cracks in wings (Feb. 2012)

▪ Zodiac Aerospace new Profit Warning

(Jan. 2016)

• Delivery delay (6000 seats) (Jul.

2015)

▪ Norway forbids usage of Super Puma

helicopters (June 2016)

• Bell intends to reconquer its WW

helicopter number one spot in front

of Airbus (April 2016)

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•Data driven analytics

•Machine learning

•Build intelligence

•Virtual service / Virtual build

•Decision making

•Experience

•Collaborate

•Accurate predictions about assemblies, model chaining

•Replace real prototypes

•Virtual experiments of entire systems

•Conceptual representation without geometry modelling

SYSTEM MODELLING

VIRTUAL PROTOTYPING

DATA ANALYTICS

VIRTUAL REALITY

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•Data driven analytics

•Machine learning

•Build intelligence

•Virtual service / Virtual build

•Decision making

•Experience

•Collaborate

•Accurate predictions about assemblies, model chaining

•Replace real prototypes

•Virtual experiments of entire systems

•Conceptual representation without geometry modelling

SYSTEM MODELLING

VIRTUAL PROTOTYPING

DATA ANALYTICS

VIRTUAL REALITY

PLATFORM

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•Data driven analytics

•Machine learning

•Build intelligence

•Virtual service / Virtual build

•Decision making

•Experience

•Collaborate

•Accurate predictions about assemblies, model chaining

•Replace real prototypes

•Virtual experiments of entire systems

•Conceptual representation without geometry modelling

SYSTEM MODELLING

VIRTUAL PROTOTYPING

DATA ANALYTICS

VIRTUAL REALITY

HYBRID TWINThe ultimate goal is to build

a PHYSICAL and DIGITAL prototype which is

agile, smart and autonomous,

to foster industrial transformation

delivering outcomes

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Copyright © ESI Group, 2017. All rights reserved.

www.esi-group.com

Content

1. About ESI• Key figures

• A renown installed base worldwide in multi sectors

• The industrial transformation

2. A unique positioning • A global offer for Virtual Prototyping

3. Outlook and strategy• Strategic Value creator positioning

• The Hybrid twin

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Product & Process value creation model

From Virtual Prototype to Hybrid Twin…

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The HYBRID TWIN approach

Physical basedmodeling

Data drivenmodeling

‘Virtual Twin’ ‘Data Twin’

Hybrid TwinTM

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HYBRID TWIN prototype

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Hybrid twin of a hot forming manufacturing line

FULL SOLUTION

Hybrid twin, i.e. full process control through

1. a closed 1D loop system

2. 3/4D calculations

3. Operational sensor data visualization & analytics

4. Machine learning, fault and degradation modeling

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Hybrid twin of a hot forming manufacuring line

SOLUTION SKELETTON

1D representation of the whole press line.Unlimited scenarios, assumptions and data

sets (heating, transfer times, cooling, energy consumptions, …)

Closed loop system.

SOLUTION MUSCLE

3/4D (space and time) detailed analysis of the various hot forming stages and creation of the dataset of operations for robustness

and qualityCreation of the data-model of operations

based on selected parameters

Design space exploration

ON-LINE MEASUREMENTS

Possible retro-feed back of on-line available measurements into 3/4D

calculations and in closed loop system as reduced flexible model.

SOLUTION BRAIN

Data analytics of 3D components models, 1D system physical models and

control codeCombine simulation data with operational sensor data into a

continually evolving hybrid twin model used for diagnostics and predictive

maintenance of the system

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Hybrid twin of a hot forming manufacturing line

KEY ESI DIFFERENTIATORS

1. Proprietary of all solutions

2. 0/1D system modelling including now Scilab (competitive with Matlab but open-source and free)

3. 3/4D modelling

4. Data analytics and visualization

5. Process management and system fault and degradation modeling

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Hybrid Twin: WindTwin Project with £500K funding to ESI

Model, visualize, analyze, and make decisions using and combining both data sets (Hybrid twin)

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Creating a new value proposition – the product in service

VirtualPrototype

Hybrid TwinData Analytics

& Machine Learning

System in Operation

Augmented models for fault

and wear

Predictive Maintenance of the Product in Service

Physics based Models

Data derivedModels

Nominal ModelSensor and

Simulation Data

Hybrid model that replicates the

product in service

FeedbackUpdate

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Complete control over a product entire lifecycle

Product & Process value creation model

ANALYSIS &

SIMULATION

VIRTUAL

TESTING

Conduct

design checks

Replace real

prototypesReplace real

tests

Pilot product

performance in

operation

VIRTUAL

PROTOTYPE

HYBRID

TWIN

As built

As certifiedAs developed

As operated- As

maintained

Product Lifecycle Management (PLM)

Immersive Virtual

Engineering

Product Performance

Lifecycle (PPL)

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Accelerating Industrial Transformation

Exponential Growth in Intelligent Products

February 29 - March 4, 2016

Cameras& Radars

80% of the

growth

Need to be able to intelligently process

data collected and to support certification.

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…From Hybrid Twin to Autonomous Prototype

Product & Process value creation model

AutonomousPrototype

Communication and Autonomy

Internet of Things (IoT)

Artificial Intelligence

Hybrid

Twin

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Democratization and continued investments for exponential benefits

Strategic Value creator positioning

ANALYSIS &

SIMULATION

VIRTUAL

TESTING

Conduct

design checks

Replace real

tests

Product Lifecycle Management (PLM)

Replace real

prototypes

Communicate,

Assist

& Autonomize

Pilot product

performance in

operation

VIRTUAL

PROTOTYPE

HYBRID

TWIN

AUTONOMOUS

PROTOTYPE

Immersive Virtual

Engineering

Product Performance Lifecycle (PPL)

Benefits

x1

Benefits

x10

Benefits

x +++ Benefits

x 100

From ‘Get it Right’ …to… ‘Keep it Right’…to…’Make it Smart’