Altamir - 2018 Registration document

Business description and activities

Presentation of the Company

1

www.altran.com

1) Business description AltrafinParticipations, a holding company controlledby theApax funds, is theprincipal shareholder of Altran, with8.6%of its capital and 15.3% of its voting rights. Altran is listed on Euronext Paris, Compartment A. Altran is a world leader in innovation and high-tech engineering consulting. Altran works with its clients over the entire value chain, from design to production. The group has been providing its expertise for over 30 years to key players in the Aerospace, Automotive, Defence, Energy, Finance, Life Sciences, Railway, Telecoms and other sectors. Altran has nearly 45,000 employees in over 30 countries. 2) Investment rationale As the pioneer in its industry, Altran has developed the only international networkwith a comprehensiveoffering in innovation consulting. The company has a very strong brand in the industry and a diversified andwell-balanced portfolio of blue-chip clients. At the time of investment, Apax became the core shareholder that the Group needed. 3) Sources of value creation The investment thesis is based upon growing sales and EBITDA through organic growth, increasing Altran’s share of the outsourced R&D market, rationalising its portfolio of activities andgeographies, taking advantage of build-upopportunities and optimising costs. 4) Achievements Altran’s portfolio of activities and geographies has been actively managed. The group has exited from loss-making countries, like Brazil, and reinforced its presence inkeymarkets suchasGermany, the UK and the US. It has also targeted investments in emerging geographies (India andChina) and exited fromunderperforming activities that were not in line with its strategy (Arthur D. Little). The company has implemented an active build-up strategy focused on Altran’s key markets, i.e., Germany, the UK, the US, India, China, and key strategic sectors such as Embedded Software and Intelligent Systems. InMarch 2018, Altran acquired theUS companyAricent for €1.7bn and created the undisputed world leader in innovation and high-

tech engineering consulting, with nearly 45,000 employees in some 30 countries and nearly €3bn in annual revenue. The transaction was financed in part by a €750m capital increase, to which Apax Partners and Altamir participated pro-rata to their stake in the company. On 26 June 2018, Management unveiled “The high road, Altran 2022”, its strategic plan for the four-year period from 2018 to 2022. The plan aims to grow Altran organically to €4bn in sales while reaching a 14.5% operating margin vs. ca. € 2.9bn in sales and a 12.6% pro forma operating margin as of Dec-2017. Inmid-July 2018, Altran issued a press release announcing a pre- acquisition forgery discovered at Aricent for a total amount of ca. $10m (related to one individual, in his relation to one client only and for the period Q3 2017 to Q1 2018). As a consequence, Aricent’s margin was reassessed to 15.6% on a LTM basis as of Jun-2018 vs. 18.3% PF LTM Sep-2017. This financial incident, which was an isolated event, does not affect the rationale of the acquisition of Aricent. Nevertheless, it had an impact on Altran’s share price, which declined 49.5% between 31 December 2017 and 31 December 2018. 5) Performance In 2018 Altran reported robust revenue of 2,916.4m, up 27.1% compared to 2017 (8.0% organic growth and 7.1% economic growth), witha solidmomentumacross regions. Revenue included €445m fromAricent whose contribution started 20 March 2018. Operating profit amounted to €352.3m, up 40.9% compared to 2017, reaching 12.1% (+120bps compared to 2017). Aricent’s operating margin was restored to 18.2% in the second half of 2018, leading to a €79m contribution (17.8% of revenues) in 2018. Excluding the contribution of Aricent, the operating margin of Altran increased by 20bps compared to 2017, notably due to progress in rebuilding themargin inGermany, where the company returned to profitability in the second half of the year. 6) Exit The successful transformation of the group, its financial performance and its new scale following its combination with Aricent should increase market investor interest, as well as that of trade or financial buyers.

DATE OF INVESTMENT

PORTFOLIO AT FAIR VALUE

SECTOR

COUNTRY

RESIDUAL COST

FAIR VALUE

2008

€ 38.9 m €

26.4 m

2.6 %

F R A N C E

37

ALTAMIR 2018

Registration document