Assystem - 2018 Register document

REGISTRATION DOCUMENT 2018 INCLUDING THE ANNUAL FINANCIAL REPORT

MESSAGE FROM THE CHAIRMAN & CEO

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2018 KEY FIGURES

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INFORMATION ABOUT THE COMPANY AND ITS SHARE CAPITAL 162 6.2 Information about the Company’s share capital 165 6.3 Statutory audit and fees paid by the Group to the Statutory Auditors and members of their networks 173 6.4 Special report on awards of free shares and performance shares 174 6.5 Special report on stock options 174 161 6.1 general information about the issuer

PRESENTATION OF THE GROUP

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1.1 History

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1.2 Corporate mission and strategy 1.3 Assystem’s market and positioning

11 12 12 15

1.4 Business overview

1.5 Organisational structure

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RISK GOVERNANCE AND MANAGEMENT 17 2.1 Risk governance and management 19 2.2 Risk factors 26

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ANNUAL GENERAL MEETING OF 16 MAY 2019

175

7.1 Agenda

176 177 183 195

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NON-FINANCIAL INFORMATION STATEMENT 3.1 Vision and business model 3.2 CSR-business ethics governance and strategy

7.2 Purpose of the proposed resolutions 7.3 Text of the proposed resolutions

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33

7.4 Statutory Auditors’ reports

38 45 56 60 62 65

3.3 A responsible employer

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3.4 Creating value for clients and society 3.5 Managing our environmental footprint

ADDITIONAL INFORMATION 8.1 Articles of Association of Assystem SA

197

198 209

3.6 Methodology note

8.2 Material contracts

3.7 Report of the independent third party

8.3 Disclosure of interests in non-consolidated companies 8.4 Statement by the persons responsible for the 2018 Registration Document

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contents

209 210

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CORPORATE GOVERNANCE REPORT

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8.5 Cross-reference tables

4.1 The Board of Directors

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4.2 Compensation and benefits in kind

allocated by the Company and other Group entities to members of the administrative and management bodies in office

82 88

4.3 Additional information

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BUSINESS REVIEW AND FINANCIAL STATEMENTS

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5.1 The Group’s results

90 92

5.2 Consolidated financial statements

5.3 Statutory Auditors’ report on the consolidated financial statements

133 138

5.4 Parent company financial statements

5.5 Statutory Auditors’ report on the parent company financial statements

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REGISTRATION DOCUMENT 2018 INCLUDING THE ANNUAL FINANCIAL REPORT

An international group specialised in engineering and innovation consultancy, with 5,600 employees and operating in 13 countries . For over 50 years Assystem has been a partner of choice for the world’s largest industrial groups.

The original French-language version of this Registration Document was filed with the Autorité des Marchés Financiers (the French Financial Market Authority) on 10 April 2019 in compliance with Article 212-13 of the AMF’s General Regulations. It may be used in support of a financial operation if accompanied by a prospectus validated by the AMF. The original version of this document was prepared by the issuer and is binding on its signatories. The English-language version of this document is a free translation from the original, which was prepared in French. All possible care has been taken to ensure that the translation is an accurate representation of the original. However, in all matters of interpretation of information, views or opinions expressed therein, the original language version of the document in French takes precedence over this translation.

A NEW PATH TO GROWTH

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MESSAGE FROM THE CHAIRMAN & CEO

MESSAGE FROM THE CHAIRMAN & CEO DOMINIQUE LOUIS

A CLEAR ROAD MAP In 2018 we completed our strategic refocusing on our engineering activities dedicated to complex infrastructures, following on from our strategic move at end-September 2017 of transferring to Ardian the control of our outsourced R&D operations. At that time these activities were grouped together in a new outfit called Assystem Technologies, renamed Expleo Group in February 2019. Our nuclear engineering expertise – which we have built up over more than 50 years working in the French nuclear industry – makes us one of the major players in the new momentum that is now driving the sector forward. Our acquisition of a 5% interest in Framatome in late- 2017, alongside EDF Framatome’s new majority shareholder, not only cemented our leading position in the industry but also strengthened our credibility in France and abroad as a front-ranking nuclear engineering company. Firmly convinced that nuclear power is essential for creating the energy mix needed to help combat the climate crisis, Assystem is more committed than ever to the development of this carbon-free energy. To this end, we work day in and day out to help make the nuclear programmes we are involved in safe, highly efficient and cost-effective.

Our nuclear activities saw particularly strong growth in 2018, gaining pace as the year went on. Led primarily by our French operations, whose momentum is set to continue in 2019, the performance of our nuclear activities was also buoyed by the ramp-up of our business with the UAE- based operator, ENEC, and three major recent contract wins in Saudi Arabia, Turkey and Egypt, whose benefits we will feel in 2019 and beyond. The first of these new

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MESSAGE FROM THE CHAIRMAN & CEO

DIGITAL AS A GROWTH DRIVER The digital revolution is transforming the engineering industry, both in terms of client requirements and the very nature of the engineering profession. Our clients’ infrastructure is becoming increasingly digitalised, and project management today has to factor in interactions between a growing number of players as well as ever-stricter safety and environmental regulations. Optimising performance and complying with regulatory constraints require the continuous data management and traceability that new digital technologies provide. Assystem has built up strong expertise to support its clients in their digital transformation processes. In 2018 we significantly reinforced our innovation and digitalisation capacities, to be ahead of the curve in this area and not only meet, but also anticipate, our clients’ needs. This assertive positioning is already paying off in the services we are providing to our clients in the nuclear and public transport sectors. Going forward, the digital revolution is clearly opening up new development opportunities for Assystem. As we embark on 2019, our strategy is to remain focused on our principal growth drivers, while leveraging our innovation capabilities across all of our activities.

contracts was with K.A.CARE, the authority in charge of developing renewable and nuclear energy in Saudi Arabia, and the two others are with the Russian group, Rosatom, the world’s largest exporter of nuclear technology. We also continued to expand our complex infrastructure engineering activities for other sectors in 2018, particularly in railway transport and life sciences. Our long-standing expertise in the nuclear industry gives us a significant advantage in these domains, which also have strict regulatory and safety constraints. Our close working relationships with large French organisations in charge of projects to extend and modernise rail transport infrastructure were further strengthened in 2018, creating new growth opportunities in this area. Also during the year, we finalised the formation of Assystem Care, which is now fully equipped to partner its clients in France, Belgium and Switzerland. And lastly, Assystem now owns a 38.2% interest in Expleo Group, alongside Ardian, allowing us to remain closely involved in the value created by this dynamic new outfit which saw particularly robust growth in 2018, both like for like and acquisition-led.

Dominique Louis

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2018 KEY FIGURES

2018 KEY FIGURES

AVERAGE PRICE AND MONTHLY TRADING VOLUMES OF THE ASSYSTEM SHARE IN 2018

Number of shares

40 Euros

300 000

35

250 000

30

200 000

25

150 000

20

15

100 000

10

50 000

5

0

0

F18 M18 A18 M18 J18

J18 A18 S18 O18 N18 D18

J18

TRADING VOLUME (IN NO. OF SHARES). AVERAGE SHARE PRICE.

NYSE Euronext Compartment B ISIN: FR0000074148 Share included in the CAC All-Tradable index

DIVIDEND PER SHARE (IN €)

OWNERSHIP STRUCTURE AT 31 DECEMBER 2018

4.26%

1.00 1.00 1.00*

0.80

61.69%

34.05%

HDL DEVELOPMENT (1) FREE FLOAT (2) TREASURY SHARES

2018

2015 2016 2017

(1) HDL Development is a holding company controlled by Dominique Louis (Assystem’s Chairman & CEO), notably through HDL, which itself holds 0.35% of Assystem’s capital. (2) Including 0.35% held by HDL.

* Dividend that will be recommended at the 16 May 2019 Annual General Meeting

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2018 KEY FIGURES

BREAKDOWN OF REVENUE BY DIVISION (IN MILLIONS OF EUROS)

BREAKDOWN OF REVENUE BY BUSINESS SECTOR

444.1

395.2

20%

70%

10%

2018

2017

ENERGY (including Nuclear: 57%) LIFE SCIENCES OTHER (including Building: 9%)

ENERGY & INFRASTRUCTURE – NUCLEAR ENERGY & INFRASTRUCTURE – ET&I STAFFING OTHER

EBITA* (IN MILLIONS OF EUROS)

FREE CASH FLOW* (IN MILLIONS OF EUROS)

26.6

43.8

26.0

20.8

2018

2017

2018

2017

* See definition (1) in Chapter 5, Section 5.1.1 of this Registration Document.

* See definition (2) in Chapter 5, Section 5.1.1 of this Registration Document.

EMPLOYEE NUMBERS BY GEOGRAPHIC REGION

EMPLOYEE NUMBERS BY DIVISION

EMPLOYEE NUMBERS BY GEOGRAPHIC AREA

63

865

4,011

1,343

3,504

254

4,680

4,011

1,597

1,328

2018

2017

ENERGY & INFRASTRUCTURE STAFFING OTHER

FRANCE UK/BELGIUM/SWITZERLAND AFRICA/MIDDLE EAST/ASIA

FRANCE OUTSIDE FRANCE

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PRESENTATION OF THE GROUP

1.1 HISTORY

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1.4 BUSINESS OVERVIEW

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1.4.1 Energy & Infrastructure

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1.4.2 Staffing

1.2 CORPORATE MISSION AND STRATEGY 11 1.2.1 Assystem’s corporate mission 11 1.2.2 Assystem’s strategy 11

1.4.3 Expleo Group (formerly Assystem Technologies)

1.5 ORGANISATIONAL STRUCTURE 1.5.1 Assystem’s organisational structure 1.5.2 Simplified organisation chart of the Group at 31 December 2018

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1.3 ASSYSTEM’S MARKET AND POSITIONING

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HISTORY

1.1 HISTORY

1966 TO 1995: THE NUCLEAR YEARS The Assystem Group’s history began in 1966, when a team of nuclear engineers and technicians in France created Atem, a company specialised in the commissioning of industrial units. The Group’s business development was subsequently driven by the major nuclear equipment programme put in place by the French State after the first oil crisis in 1973. In the 1980s, Atem began to diversify into project management, mainly in industrial automation and IT, and working with clients in sectors such as automotive, steel, space and defence. In 1989, Atem teamed up with Cogema to form Alphatem, a company that was dedicated to testing and commissioning equipment and facilities purchased under Cogema’s capital expenditure programmes (an irradiated fuel reprocessing plant in the Hague and the Melox plant in the Gard region of France which produces MOX fuel assemblies). In 1994, Atem and Alphatem merged to create Assystem, which was floated on the Paris stock exchange (Second Marché) in 1995. 1996 TO 2003: BUSINESS DIVERSIFICATION 1996 marked the end of the investment cycle for construction of new industrial facilities (nuclear power stations and reprocessing plants) in the nuclear industry in France and the rest of the world and the start of a new era for Assystem. The Company began to diversify into product design and development for the aeronautics and automotive sectors (with the acquisition of Studia in France), whilst retaining its specific skills and expertise in the nuclear sector. 2003 TO 2016: INTERNATIONAL DEVELOPMENT In 2003, the merger with Brime Technologies allowed Assystem to penetrate the new technologies sector and opened the way for the Group to go global. The Group then carried out several significant acquisitions in 2004 and 2005, which changed its structure and enabled it to expand its client portfolio: Inbis Ltd in the United Kingdom (an industrial engineering group working in the aeronautics, automotive and nuclear industries) and SKI Team and Atena in Germany. In 2008, Assystem consolidated its presence in India by creating Silver Atena which brought together Silver Software (a company based in India specialised in embedded safety-critical systems) and the Germany company, Atena. In 2010, Assystem joined forces with the UK engineering company, Atkins, to create Nuclear Atkins Assystem Alliance (“N.triple.a”) an engineering company specialising in the nuclear sector and dedicated to international projects. Also in that year, the Group was one of the four founders of the Engage consortium, which it owns equally with Atkins, EGIS (a French engineering company) and Empresarios Agrupados

(a Spanish engineering company). ENGAGE won the contract for overseeing the construction of the buildings for the world’s largest fusion reactor (the ITER project). In 2011 and 2012, Assystem acquired Berner & Mattner (embedded systems for the automotive industry in Germany) and the MPH Group (nuclear engineering in France and staffing of consultants specialising in Oil & Gas and Industry in the Middle East and Africa). Since then, Assystem has strengthened its operating presence in the Middle East through the following: ● in September 2013 it based the Executive Management Department for the Energy & Infrastructure division in Dubai; ● in January 2015 it acquired Radicon – an engineering company with 400 employees based in Al Khobar and Riyad in Saudi Arabia – which enabled Assystem to double its size in the Arabian Gulf region and win market share in the infrastructure, energy and transport sectors; ● in June 2016 it acquired a 51% interest in the Turkish engineering company Envy (since renamed Assystem Envy) – a well-established player in Turkey’s engineering services market, operating primarily in the energy and transport sectors. Assystem Envy is involved in two nuclear power station construction projects: Akkuyu (a Rosatom project) and Sinop (an Atmea project). Rosatom – which is a leading operator and supplier of nuclear power stations – is a major client for Assystem Envy. The acquisition of Envy was strategically important for Assystem in view of the expansion opportunities it offers in numerous geographic regions. In 2016, several strategic partnerships and acquisitions were finalised, including: ● the formation of MOMENTUM – a consortium equally-owned by Amec Foster Wheeler (since acquired by Wood), Assystem Engineering and Operation Services and KEPCO E&C) – which was named construction management-as-agent contractor for an international project involving the assembly of over a million components for the ITER fusion reactor. MOMENTUM will play a key role in the international effort to make fusion a viable source of almost limitless carbon-free energy, ● the acquisition of the entire capital of Onyx Promavi, a France- based company specialised in project planning, cost control, deadline management and risk management for major French and international infrastructure projects, ● the acquisition of the entire capital of BATIR Group, a French engineering company specialised in nuclear civil engineering and technical and architectural synthesis using BIM (Building Information Modelling); ● For the Energy & Infrastructure (E&I) division:

● for the Global Product Solutions (GPS) division:

● the acquisition of a controlling interest in Aerotec Concept, a well-established player in the airplane/helicopter refurbishment

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HISTORY

and customisation market, which strengthened Assystem GPS’s Aerospace offering, ● the acquisition of all of the shares of Edison Technical Recruitment Limited (“Edison”), a company based in Birmingham, in the UK. Edison is a leading specialist engineering recruitment agency with a particular focus on electronics, electrical systems and software engineering and is a preferred partner for the UK’s main automotive industry players. ACCELERATION OF BUSINESS EXPANSION FOR THE E&I DIVISION In 2017, Assystem made two key strategic moves, with the aim of speeding up the growth of its two core businesses – GPS and E&I. These moves have clear advantages for both businesses, giving the Group’s clients solutions that closely meet their needs while opening up opportunities for its people and creating value for its shareholders. Transfer of control of the GPS division On 28 September 2017, Assystem SA transferred its outsourced R&D division – Global Product Solutions (GPS) – to a special-purpose acquisition company 60.77% owned by an investment fund managed by the private equity firm, Ardian, and 39.23% owned by Assystem. Out of the c. €530 million sale proceeds (after costs and taxes related to the transaction), Assystem reinvested €124.3 million in equity and quasi-equity issued by the parent of the acquisition company. This investment has been consolidated by the equity method in Assystem’s financial statements since 1 October 2017. The acquisition company was named Assystem Technologies Groupe in 2017 and renamed Expleo Group in 2019. At 31 December 2017, the new group housing the former GPS division’s entities had more than 9,000 employees working in a dozen countries, partnering clients in the aeronautics, defence, automotive, transport and industry sectors, from the design through to marketing of their products and services. Its business is highly technical and it draws on proven expertise in complex and critical systems. The aim of the overall operation was twofold: (i) to enable the new group to remain one of the leading players in the consolidation process taking place in the outsourced R&D market by giving it access to the resources and expertise that Ardian deploys to support the growth of its holdings (particularly in terms of identifying, financing and integrating acquisitions), therefore helping it to diversify its geographic presence and client portfolio, and (ii) to enable Assystem to retain an interest in the new group’s value creation thanks to the stake in its capital. In line with these objectives: ● in early February 2018, through a public tender offer launched on 15 December 2017 on the Alternative Investment Market of the London Stock Exchange, Expleo Group acquired a controlling interest of over 95% in the German group, SQS. SQS has 4,500 employees 2017: A MAJOR STRATEGIC TURNING POINT – TRANSFER OF CONTROL OF THE GPS DIVISION TO ARDIAN AND

in 19 countries (including 2,000 in India). It has built up solid and widely-recognised expertise in providing digital strategy consulting services to its clients and carrying out tests for software applications, systems, processes and networks. With nearly 15,000 employees, the merged outfit now generates around €1 billion in revenue, of which approximately 60% outside France and over 15% from the bank/insurance sector in which Expleo Group was not present before the acquisition; ● on 31 January 2018, Assystem invested €60.7 million in an equity financing round carried out by Expleo Group for the purpose of helping finance the acquisition of SQS. Following this financing round, Assystem’s interest in the new group was a slightly lower 38.16%. Assystem’s participation in the financing – which brought its total investment in Expleo Group to €185 million – was funded by credit facilities arranged with Assystem’s banks in addition to its existing facilities so that it could retain the financial resources it needs to grow Assystem Energy & Infrastructure. Refocusing on the Energy & Infrastructure division (Assystem E&I) The transfer of control of its GPS division has enabled Assystem to refocus on the growth of the division that it still wholly controls – Energy & Infrastructure. In line with this objective, in late 2017, Assystem acquired a 5% stake in Framatome, strengthening its longstanding partnership with EDF, the key client of the E&I division’s Nuclear business. It also carried out three other strategic acquisitions. The first of these has strengthened its position in life sciences – which is a priority development sector for the E&I division’s Energy Transition & Infrastructures business – and the two others benefit both of the division’s businesses by giving it a leading position in the project management field in France. STRENGTHENING ASSYSTEM’S LONG-STANDING PARTNERSHIP WITH EDF – ACQUISITION OF A 5% STAKE IN FRAMATOME As a leading nuclear engineering player, Assystem is well placed to leverage the anticipated rapid growth in demand for nuclear engineering throughout the world as fossil fuels are replaced by carbon-free sources of electricity. With this in mind, in late 2017 Assystem took part in the reconfiguration of the French nuclear industry by purchasing from Areva NP a 5% ownership interest in Framatome, for €123.7 million. Consequently, Framatome – which generates annual revenue of over €3 billion – is now 75.5% owned by EDF, 19.5% by Mitsubishi Heavy Industries Ltd and 5% by Assystem. It is the Company to which Areva NP transferred its assets and activities related to (i) the design and supply of nuclear reactor equipment, (ii) the design and supply of fuel assemblies and (iii) services provided to a large worldwide installed base of nuclear reactors. This investment forms part of a broader agreement between Assystem and EDF aimed at consolidating their partnership, particularly concerning maintenance services carried out on civilian nuclear reactors in France and the United Kingdom to ensure they remain in proper operating condition. It also opens up opportunities for Assystem in the new-build market in the French nuclear industry. At the same time, it is enabling

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HISTORY

France, Belgium and Switzerland. At 31 December 2018, Assystem owned 96.8% of the share capital of Assystem Care Holding, which in turn wholly owns three operating subsidiaries that are dedicated to the French, Belgian and Swiss markets respectively. ● The purchase (in late 2017) of the entire capital of the French company, Euro Contrôle Projet (ECP). ECP is specialised in the Project Management Office (PMO) concept and covers the entire spectrum of corresponding services, i.e. planning and cost optimisation as well as risk, contract and quality management. This acquisition – like that of Onyx Promavi in 2016 – has rounded out Assystem’s project management offering. ● The purchase (in late 2018) of the entire capital of the French company E-P6 Consulting, which specialises in integrating project management software. This acquisition further strengthened Assystem’s project management offering, led by its subsidiary Euro Contrôle Projet (ECP), which is specialized in the Project Management Office (PMO) concept, covering planning and cost optimization as well as risk, contract and quality management.

Assystem to strengthen its ties with France’s key nuclear participants while leaving it entirely free to continue its projects with other major international players. ACQUISITIONS IN THE LIFE SCIENCES AND PROJECT MANAGEMENT SECTORS Drawing on the expertise it has built up in managing complex projects subject to significant regulatory constraints as well as the advances made in robotics and digitisation of engineering services, Assystem has continued to expand its business through both organic and acquisition- led growth in the transport infrastructure, life sciences, and project management markets. In 2017 and 2018, it made the following three acquisitions to expand its business in two of those markets: ● The purchase (in late 2017) of a 72.7% interest in The Biotech Quality Group (TBQG) – a Belgian consulting firm that specialises in performance management and improving regulatory compliance in Europe’s pharmaceutical and biotech industries. TBQG’s activities were combined with Assystem E&I’s life sciences business in 2018 to create Assystem Care, which operates in the life sciences sector in

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PRESENTATION OF THE GROUP CORPORATE MISSION AND STRATEGY

1.2 CORPORATE MISSION AND STRATEGY

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1.2.1

ASSYSTEM’S CORPORATE MISSION

1.2.2

ASSYSTEM’S STRATEGY

The Group’s expansion drive is now focused on its E&I division, for which the strategy is to: ● combine organic and external growth in a balanced way; ● consolidate the globalisation of its activities, with particular emphasis on business development in the United Kingdom, Turkey and, more generally, the Middle East; ● develop new services for existing clients and enlarge the client portfolio, notably by gaining additional skills through hiring employees and/or acquiring companies that possess those skills; ● ensure that client offerings remain competitive by using an appropriate mix of resources based in Western Europe and elsewhere in the world. The objective for the Staffing division is to grow its portfolio of clients in the Industry and Infrastructure sectors, working in synergy with Assystem E&I – particularly in the Middle East – while keeping operations in the Oil & Gas sector focused on value-added services.

Assystem’s business: industrial engineering Assystem is the engineering partner of choice for leading global industrial groups. As a key participant in the industry for more than 50 years, the Group has highly-skilled teams of engineers who design and develop the products and services of the future, build and ensure the optimal use of clients’ equipment and facilities throughout their life cycle, and coordinate and see through the completion of their infrastructure and other projects. Its 5,600 highly-committed employees contribute their specific talents, know-how and values to help clients meet the range of challenges they face on a daily basis, such as producing cleaner energy and broadening the reach of electric transport. The Group’s teams are trained to master and build skills whilst being able to adapt to the challenges inherent in innovation, risk management and complex projects. Operating in 13 countries, they work hard every day to share their expertise, optimise know-how and bring its clients’ and partners’ projects to fruition.

OVER 50 years’ experience 5,600 EMPLOYEES AN INTERNATIONAL PRESENCE with operations in 13 countries (Belgium, France and French overseas territories, India, Malaysia, Morocco, Qatar, Russia, Saudi Arabia, Singapore, Switzerland, Turkey, United Arab Emirates, United Kingdom) €444.1 million in revenue REGISTERED OFFICE: Paris-La Défense (France) LISTED on Euronext Paris

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PRESENTATION OF THE GROUP ASSYSTEM’S MARKET AND POSITIONING

1.3 ASSYSTEM’S MARKET AND POSITIONING

In the face of the market consolidation taking place for outsourced R&D services, in order for GPS to remain a leading player in its market, accelerate its growth, extend its geographic and sector coverage and meet the needs of its industrial clients who are now seeking to work with fewer suppliers and looking for one-stop worldwide offerings, in 2017 Assystem decided to team up with the private equity firm Ardian. Following this strategic move, Assystem’s core business is now complex infrastructure engineering, operated by the Energy & Infrastructure division. The Group is a key player in the nuclear engineering markets where it has a strong reputation for its specialist know-how. Assystem brings added value to industrial companies, utilities and contractors operating in nuclear energy, conventional energy, transport infrastructure, life sciences and other complex infrastructure thanks to its long-standing presence in the nuclear industry, and therefore its experience of operating in restricted environments with stringent safety requirements. The Group’s experts help major players in the energy industry (operators and equipment manufacturers) to manage their capital expenditure at every stage of their assets’ life cycles – from design through to construction, commissioning, maintenance and ultimately decommissioning. Assystem’s main competitors in this market are UK and North American groups such as SNC-Lavalin (which is also Assystem’s partner in the Engage and N.triple.a joint ventures), CH2M Hill, Wood (also a partner of Assystem in the Momentum consortium) and Worley Parsons, as well as French groups including Egis, Systra and Ingérop. Assystem also has another business which consists of seconding consultants specialised in Oil & Gas and Industry, essentially in the Middle East, Africa and Asia. This business – which is known as “Staffing” and accounts for 10% of the Group’s revenue – is principally inherited from an acquisition carried out in 2012 (the MPH Group) to which Assystem’s pre-existing staffing activities were added. Since 2015, Assystem’s main market for Staffing – the Oil & Gas sector – has been hit hard by oil price volatility and the impacts of cost- saving programs launched by the sector’s players. Consequently, the Staffing division has diversified its client portfolio into the Industry and Infrastructure sectors, which now contribute more than 50% of the division’s revenue.

Assystem operates in the infrastructure engineering market. The role of engineering is to study, design and oversee the production or construction of all or part of an industrial component or civil engineering structure. Assystem’s teams assist major industrial players with reducing their project costs and lead times and optimising their development, manufacturing and marketing processes, and enable them to design and produce innovative solutions across the globe. In the nuclear sector business is being driven by large-scale maintenance programmes, the construction of new reactors in France and the United Kingdom, and new-build programmes for civil nuclear reactors launched by new entrant countries (Turkey, the United Arab Emirates, Saudi Arabia and Egypt). At the same time, infrastructure engineering firms are feeling the benefits of a bullish spending cycle for transport infrastructure. And the more generalised use of digital modelling is opening up a raft of opportunities as this technology not only leads to major productivity gains but also plays a key role in enhancing the quality of buildings and services delivered. In the field of technology consulting (in which Assystem is present through its 38.16% stake in Expleo Group (formerly Assystem Technologies), business volumes are still being propelled by the automotive and aeronautical sectors. ASSYSTEM’S POSITIONING Assystem began as Atem, which was founded in 1966 by engineers from the French nuclear programme in order to serve the engineering needs of the French nuclear industry. This business accounted for the majority of the Group’s revenue up until the latter part of the twentieth century. Atem then merged with Alphatem – jointly owned by Dominique Louis and Cogema – to create Assystem, which went public in 1995. Shortly after its stock market flotation the Company diversified, with the acquisition in 1996 of an engineering firm specialised in the aeronautics and automotive sectors, which launched the outsourced R&D business. This business drove the Group’s growth as from the year 2000, especially following its merger with Brime Technologies in 2003. The formation of Global Product Solutions (GPS) in 2014 brought all of the Group’s outsourced R&D activities together in one division.

1.4 BUSINESS OVERVIEW

Assystem is still closely associated with the growth of its former GPS division as a result of its 38.16% ownership interest in Expleo Group (formerly Assystem Technologies Groupe). This investment is accounted for by the equity method in Assystem’s consolidated financial statements.

Assystem operates in the engineering market through two divisions:

● Energy & Infrastructure (88% of 2018 revenue);

● Staffing (10% of 2018 revenue).

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1.4.1

ENERGY & INFRASTRUCTURE

The main EPCM projects the Group is currently working on concern (i) buildings and electrical easements for ITER, (ii) ancillary buildings for EPRs in the UK, and (iii) the nuclear portion of the CIGEO radioactive waste storage project. Design engineering This business area covers design, assistance with configuration management, logistical support, customisation and research into the related risks. In the nuclear sector, the focus of Assystem’s design engineering work is on demonstrating how operators can meet their safety objectives, which is done by analysing risks and verifying the resistance of systems based on scenarios of attacks and internal failures. For its operations and design support services, Assystem has in-depth multi-sector expertise and its wealth of experience includes signalling designs for SNCF Réseau, mechanical and fluids systems designs, Balance of Plant analyses for the energy sector, detailed designs for the conventional turbine islands of EDF’s nuclear power plants, designs of elementary and command/control systems, and materials classification analyses. The main contracts that Assystem is currently working on in this domain cover its traditional order book in France (particularly for EDF) as well as infrastructure design studies in Saudi Arabia, notably for the Royal Commission. Systems integration When providing systems integration services for complex projects, Assystem draws on its expertise in automation and the construction of buildings intended for complex processes. These services not only cover the installation phase but continue right through to the commissioning tests for the processes themselves. The Group’s experience in this area covers a wide range of fields, including the maintenance of command and control systems for nuclear power plants and other nuclear equipment, the cybersecurity of an energy transmission network, the safety of nuclear facilities and public transport networks, and energy efficiency. Assystem won three major international contracts in 2018, demonstrating the strength of its strategy and its ability to export its nuclear engineering expertise. K.A.CARE contract In late June 2018 Assystem was awarded a major contract by K.A.CARE, the authority in charge of developing renewable and nuclear energy in Saudi Arabia. This contract – which was won after an international invitation to tender launched by K.A.CARE – involves site characterisation studies (geological and seismic analyses, etc.) as well as impact studies (environmental and demographic effects and the impact on electricity grids). The services will be rendered over a period of eighteen months and form part of the project to build Saudi Arabia’s first nuclear power plants. The Group won the contract thanks to the synergies it is able to leverage between its long-standing expertise in the nuclear sector, its specific skills Significant events for E&I in 2018 MAJOR NEW INTERNATIONAL CONTRACTS WON FOR NUCLEAR ENGINEERING

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2018 key figures Revenue: €391.3 million EBITA: €27.3 million Employees: 4,680

Assystem’s Energy & Infrastructure (E&I) division works with nuclear utilities companies and contractors, players in the conventional and renewable energy sectors, designers and operators of transport infrastructure and other complex infrastructure, and life sciences companies, providing them with the expertise it has built up through its long experience in the nuclear industry and infrastructure engineering in environments with complex operating conditions and/or stringent safety requirements. E&I operates in France and internationally in the nuclear, energy, and infrastructure (collective and industrial) markets and its clients are generally large prime contractors. It specialises in research instruments, electricity production plants and the fuel cycle, urban and regional transport systems, site decommissioning and waste processing. It is a well-established player in both infrastructure transformation (new methods of producing and storing electrical energy) and digital transformation (project development and providing secure solutions for users). E&I’s engineering operations are structured around technical and project departments and its business areas include project management consultancy; engineering, procurement and construction management; design engineering; and systems integration. Project Management Consultancy (PMC) PMC services generally include assistance with the construction and start-up phases as well as for commissioning tests, with the design and performance of safety tests forming a particularly important aspect. The main PMC projects currently being carried out by Assystem are for (i) EDF (assistance for power plant activities such as on-line maintenance and outages, as well as for the construction of the EPR at Flamanville, France), (ii) Société du Grand Paris (concerning the creation of the new Grand Paris Express transport network), (iii) SNCF (the Éole project), (iv) CEA (in the areas of defence, decommissioning and waste collection and processing), (v) the ITER project based in Cadarache, France, (vi) ENEC, the operator for the civil nuclear reactors being built in the United Arab Emirates (construction and commissioning management, including tests and assistance with the start-up phase), (vii) K.A.CARE, the authority in charge of developing renewable and nuclear energy in Saudi Arabia (site characterisation and impact studies), and (viii) the Rosatom Group, a leading nuclear industry player based in Russia (construction supervision in Turkey and licensing in Egypt).

Engineering, Procurement and Construction Management (EPCM)

Assystem provides EPCM services across all project phases, from design through to decommissioning. Its expertise in this area covers new projects as well as decommissioning and waste recovery and processing programmes.

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PRESENTATION OF THE GROUP

BUSINESS OVERVIEW

maintenance and systems integration, which are particularly adapted to the public transport infrastructure sector. Helping Thales with the underground railway extension in Doha (Qatar) In 2018, through its local staffing subsidiary, MPH, Assystem contributed to the works being conducted by the Thales Group to extend the underground railway network in Doha (Qatar). The Group deployed an on-site team of around 200 people for Thales, who notably took part in overseeing the construction work and performing start-up tests. The Éole project: scheduling, construction management and coordination (SCMC) As part of the project to extend the RER E urban railway line to the west of Paris (the Éole project), Assystem – in association with the Louis Berger Group – has been tasked by the project manager, SNCF Réseau, with an SCMC assignment relating to all of the project’s players, civil engineering works and systems, for the section of the line running between the Haussmann-Saint-Lazare and Nanterre la Folie stations. This new line, whose central section runs through a hyper densely populated area, entails the construction of 8km of new infrastructure and requires an exceptional level of works for which planning and coordination services are absolutely vital. Following Assystem’s acquisition of TBQG in late 2017, in 2018 the Group created Assystem Care, which operates in France, Switzerland and Belgium through a team of some 400 specialist engineers dedicated to the life sciences sector. Assystem Care – which has brought together the life sciences activities of Assystem and TBQG – now ranks among the market leaders in its three host countries. The creation of Assystem Care has given the Group’s life sciences business greater visibility with both clients and employees, has built its image as an employer, and marks an important step towards achieving Assystem’s goals for life sciences engineering. AN INNOVATIVE AND DIGITAL COMPANY The “Imagine” innovation programme – a platform for helping clients meet new engineering challenges Whether in energy or infrastructure, the DNA of projects is mutating, making them increasingly complex to carry out and bringing heightened constraints in terms of functionality, cost control, lead times, and safety and security in order to meet general demand for transparency and ensure regulatory compliance. Against this backdrop, engineering needs to reinvent itself. And to do that the industry must draw on young talent across a wide range of disciplines and implement new approaches to innovation that embrace the concepts of joint development and mobilising the ecosystems of know-how and technology. These are the goals of the “Imagine” programme launched in 2018, which is structured around three main pillars. First, developing skills and the Group’s employer appeal through innovation. Second, developing new systems engineering methods by using technologies such as Building Information Modelling (BIM), Plant Life Cycle Management (PLM), data processing and artificial intelligence. And third, creating real innovation ecosystems by jointly developing projects with clients, start-ups, public and private research institutes, universities and engineering schools. THE CREATION OF A LEADER IN LIFE SCIENCES ENGINEERING IN FRANCE, BELGIUM AND SWITZERLAND

in site characterisation (through its Turkish subsidiary, Assystem Envy) and its local knowledge obtained through its Saudi-based subsidiary,

Assystem Radicon. El Dabaa contract

In October 2018, Assystem signed a contract to help the project contractor obtain the licences and permits required for building a new nuclear power plant in El Dabaa in Egypt – a project led by Rosatom, the Russian state nuclear corporation. Akkuyu contract In December 2018, Assystem signed a major contract with Rosatom to supervise the construction of the Akkuyu nuclear power plant in Turkey over a six-year period. The Group’s Turkish subsidiary – Assystem Envy – had previously carried out site characterisation studies for this plant and already provides other services to the project company in charge of developing the plant, Akkuyu Nükleer. MAJOR CONTRACT WINS AND RENEWALS FOR NUCLEAR ENGINEERING IN FRANCE Project management contract with EDF In early December 2018, Assystem, along with other companies, was awarded two units of work under the framework project management contract for all of EDF’s operations in France. These two units of work correspond to project management assistance and overall assistance with project management and coordination. The contract has a three- year term with a two-year extension option. The expertise of ECP (which was acquired by Assystem in late 2017) was a key factor in this contract win. Renewal of framework agreements for the Grand Carénage programme Assystem is involved in the “Grand Carénage” programme launched by EDF in 2008 to strengthen the maintenance and extend the lifespans of the existing nuclear power plants in France. In the first half of 2018, the various framework agreements pursuant to which Assystem supports this programme were renewed for a four-year period. The services provided under these agreements in 2018 particularly related to the fourth ten- yearly inspection (VD4) of the Tricastin site, which is the model site for 900 MW reactors under the Grand Carénage programme. Contract wins and renewals with the Orano Group In 2018, the Project Business Unit of the nuclear engineering group, Orano (Orano Projets), renewed its framework agreements with Assystem relating to command and control processes, and also signed a new framework agreement for mechanical engineering services. The Group’s long-standing collaboration with Orano DGP and Orano Cycle also continued during the year, with the signature of various framework agreements, covering recycling engineering, decommissioning, waste recovery and processing, commissioning services (tests and start-up support) and production assistance.

ROBUST MOMENTUM FOR TRANSPORT ENGINEERING SNCF Réseau audits

In order to help improve the performance of SNCF’s mainline stations, during 2018 SNCF Réseau tasked Assystem with performing a number of audits, first at Montparnasse station in Paris and subsequently at other major stations across France. Assystem successfully completed these audits thanks to a combination of its recognised skills in operational

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PRESENTATION OF THE GROUP ORGANISATIONAL STRUCTURE

creating an automated system for batch analysing multiple files for the pharma group GSK. The partnerships set up by the Group with start-ups (Saagie, Sparte and Rebim), universities and engineering schools ( École des Mines d'Alés , ESIEA, the DataScience Institute, INSA Lyon, Arts et Métiers and INSA Rouen) are a key factor in ensuring we have the agility and responsiveness required to successfully carry out these projects.

The Group’s management team oversees the Imagine programme based on criteria that factor in the technological maturity of the solutions proposed and the markets they are looking to address. One of the highlights of 2018 was the Imagine innovation contest organised by Assystem to encourage employees to come up with new ideas and help put those ideas into practice. This contest was also aimed at helping discover new solutions to sharpen the Group’s competitive edge and/or open up new business opportunities. Examples of the ideas that emerged are: (i) a web platform that uses artificial intelligence to match up skills profiles with the client’s project specifications and, (ii) a system specifically developed for EDF which involves installing sensors on the water filtering systems at power plants to be used as pilots for a predictive maintenance offering for those systems. In the systems engineering field, Assystem has teamed up with a major French research organisation, the CEA, to jointly develop the first “digital twin” of a nuclear facility. The idea is based on an original data model and an interoperable “data aggregator” approach implemented in partnership with Rosatom and EDF. This technology helps the Group stand out from the competition for many digital transformation projects and highlights the added value it can bring to nuclear engineering project management. The Group proposed incorporating this approach into the ConnexiTy project being carried out by EDF’s R&D teams, in order to build a data model. This type of model can then be used as a basis for new equipment maintenance services in nuclear facilities, notably by providing virtual reality, augmented reality and artificial intelligence as operator aids. Working in partnership with Dassault Systèmes and Thales, Assystem has also developed an original methodology based on the 3D Experience platform and the interoperable features of the CAPELLA platform to implement new engineering approaches aimed at strengthening the architectures selected by our clients for their future nuclear infrastructure projects. And lastly, in 2018 the Group entered into a partnership with the start-up Cosmo Tech to use a scenario simulation approach designed to map out a critical path in order to minimise the risk of not respecting a project’s deadlines. For data processing and the use of artificial intelligence, our in-depth knowledge of the nuclear, transport and life sciences sectors, allied with our desire and ability to mobilise the innovation ecosystem, has enabled us to demonstrate the added value of data science in a variety of areas: helping to prepare decommissioning operations, jointly developing audit systems with the CEA for the French railways operator (SNCF), and

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1.4.2

STAFFING

2018 key figures Revenue: €44.2 million EBITA: €1.8 million Employees: 865

The Staffing division – which operates through the MPH Group – provides specialist consultants to companies in the Oil & Gas and other industrial sectors, primarily in the Middle East, Africa and Asia. MPH is a well-established player in the field of technical and engineering recruitment services for the Oil & Gas, energy, aerospace, defence, telecommunications, railway, mining, metallurgy, environmental and nuclear industries. Since 2014 the MPH Group has been significantly affected by lower capital spending in the Oil & Gas sector – the world’s largest market for staffing – and is therefore rapidly building up its client portfolio in other sectors, grouped under the name “Industry”. In 2018, revenue generated by MPH in the Industry segment exceeded the figure for Oil & Gas for the first time, which helped stabilise the Staffing division’s overall revenue.

1.4.3

EXPLEO GROUP (FORMERLY ASSYSTEM TECHNOLOGIES)

Until the acquisition of SQS, the Expleo Group – in which Assystem SA holds a 38.2% interest (see Sections 1.1 above and 1.5 below) – was specialised in outsourced research and development for industrial clients operating in the Aerospace, Automotive, Transport (rail) and Industry sectors. The acquisition of SQS broadened the group’s field of expertise and diversified its client portfolio, particularly by adding the bank/insurance sector.

1.5 ORGANISATIONAL STRUCTURE

1.5.1

ASSYSTEM’S ORGANISATIONAL STRUCTURE

nuclear sector and infrastructure engineering. It is now made up of two divisions – the Energy & Infrastructure division (comprising nuclear, infrastructure, life sciences and project management activities) and the Staffing division. It also owns a 5% stake in Framatome and 38.2% of Expleo Group (formerly Assystem Technologies Groupe).

In late September 2017, Assystem transferred the control of its GPS business to Ardian. Following this divestment, the Assystem Group (“the Group”) refocused on its long-standing business activities in the

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