1. Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

2. Agoria ICT Winter Network Event
Prospects for the Belgian ICT Sector in 2011
Siddy Jobe
(+32 2 287 92 79)
Siddy.Jobe@degroof.be
Twitter: @siddyjobe
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

3. Managing the future
Bank Degroof is Belgium’s premier independent private and
investment bank, with an excellent reputation in each of its fields of
activity.
For 140 years it has been the reference institution for private and
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The Bank has nearly one thousand employees managing their
customers’ future from offices in six countries.
In Belgium: Antwerp-Brussels-Charleroi-Kortrijk-Ghent-Hasselt-
Knokke-Liège-Namur-Wavre.
European research coverage through European Securities Network
Voted “Best Private Banking Services Overall in Belgium” by
Euromoney
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

4. References
IT & Telecom (1/2)
Sale of
ESKO
Public take over bid
has acquired 100% of
the shares of
on
Carve-Out of the
Infrastructure Activities to
through
Management Buy-Out
ARTWORK
SYSTEMS
Financial Adviser to the Buyers Financial Adviser to the Sellers Financial Adviser to Esko Financial Adviser to the Sellers
December 2010 September 2007 July 2007 June 2007
Public take-over bid by
Fairness opinion regarding has been acquired by
Initial Public Offering Independent expert opinion
the public takeover bid by
on Alternext Brussels regarding
debt conversion into equity
on all shares and warrants
Co-Lead Manager Financial Adviser to the seller Financial Advisor to Telindus
October 2006 September 2006 April 2006 January 2006 December 2005
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

5. References
IT & Telecom (2/2)
Sale of distribution, maintenance and
development of "IBBA" Product
Initial Public Offering to Initial Public Offering Initial Public Offering
on Euronext Brussels on Euronext Brussels Sale of FLV Fund's investment portfolio on Euronext Brussels
Selling Agent Financial Adviser to the seller Selling Agent Financial Adviser to the seller Selling Agent
November 2005 June 2005 October 2005 January 2005 March 2004
Fairness opinion
regarding the public takeover bid
on Ubizen by Ubidco
December 2003
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

6. Sell-Side Analyst
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

7. Macro Economics
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

8. Positive GDP growth in the last 6 quarters …
• Belgium only released 3 negative GDP
growth figures (Q3 2008 to Q1 2009)
Real GDP, qoq annualized
during the crisis compared to 5 for the
15% EMU zone (Q2 2008 to Q2 2009)
10%
• The last two GDP figures came out
5%
slightly higher than the EMU zone
0% average
-5%
• Mainly due to better domestic demand
-10%
and net exports
Real GDP, yoy
-15%
8%
06/95
06/96
06/97
06/98
06/99
06/00
06/01
06/02
06/03
06/04
06/05
06/06
06/07
06/08
06/09
06/10
6%
EMU zone Belgium
4%
2%
0%
-2%
-4%
-6%
03/96
03/97
03/98
03/99
03/00
03/01
03/02
03/03
03/04
03/05
03/06
03/07
03/08
03/09
03/10
EMU zone Belgium
Source: Datatstream
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

9. … leading to a reduction of negative output gap
Output Gap (in %age of GDP)
3%
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011E
EMU Belgium
• EMU zone output gap is strongly affected by the actual large output gaps in peripheral
countries
Source: IMF
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

10. Growth prospects remain moreover positive as
revealed by leading indicators
Belgian leading indicator & growth
15 10%
10 8%
• The increase in Belgian
5 6%
business confidence has been
0 4%
mainly driven by business
-5 2%
services and trade
-10 0%
-15 -2%
-20 -4%
• The building industry
-25 -6%
continues to weigh negatively
-30 -8%
on the index
-35 -10%
06/96
06/97
06/98
06/99
06/00
06/01
06/02
06/03
06/04
06/05
06/06
06/07
06/08
06/09
06/10
BNB index Real GDP, qoq annualized (RHS)
EU leading indicators & growth
68 10%
8%
63
6%
58 4%
2%
53
0%
48
-2%
43 -4%
-6%
38
-8%
33 -10%
0/ 8
0/ 9
0/ 0
0/ 1
0/ 2
0/ 3
0/ 4
0/ 5
0/ 6
0/ 7
0/ 8
0/ 9
0/ 0
9
9
0
0
0
0
0
0
0
0
0
0
1
7
7
7
7
7
7
7
7
7
7
7
7
7
GDP, qoq (annualized, RHS) PMI Man. PMI Serv ices
Source: Datatstream
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

11. Rebound in the worldwide trade benefits to
Belgium through strong exports growth
World trade volume
170 25%
20%
150
15%
130 10%
5%
110
0%
90 -5%
-10%
70
-15%
50 -20%
01/92
01/93
01/94
01/95
01/96
01/97
01/98
01/99
01/00
01/01
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
01/10
World Trade volume Annual change (RHS)
Exports, yoy
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
11
71
12
72
13
73
14
74
15
75
16
76
17
77
18
78
19
79
10
70
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
00
01
01
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
/
Euro zone Belgium
Source: CBP, Bloomberg
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

12. New industrial orders solid pace of growth points
towards further positive momentum in the industry
Industrial orders, yoy
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
01/99
01/00
01/01
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
01/10
Euro area Belgium Industrial production, yoy
15%
10%
5%
0%
-5%
-10%
-15%
-20%
01/98
01/99
01/00
01/01
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
01/10
EMU Belgium
Source: Datatstream
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

13. Consumer confidence rebound is impressive with
positive side-effects on household expenditure Consumer confidence
20
10
0
-10
-20
-30
-40
01/96
01/97
01/98
01/99
01/00
01/01
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
01/10
Belgium Euro area
Belgian consumer confidence & consumption
20 8%
15 7%
10 6%
5%
5
4%
0
3%
-5
2%
-10
1%
-15
0%
-20 -1%
-25 -2%
-30 -3%
3 7
3 8
3 9
3 0
3 1
3 2
3 3
3 4
3 5
3 6
3 7
3 8
3 9
3 0
0 /9
0 /9
0 /9
0 /0
0 /0
0 /0
0 /0
0 /0
0 /0
0 /0
0 /0
0 /0
0 /0
0 /1
Consumer confidence Nominal consumption, yoy (RHS)
Source: Datatstream
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

14. Labor market deterioration has been milder than
in the rest of the Euro-zone
Unemployment rate • Belgium has a much lower unemployment
23% rate than the peripheral countries ...
21%
19%
17% • But higher than the best European
15% countries (Austria, Germany and
13%
Netherlands)
11%
9%
• Measures taken to facilitate the reduction
7%
of working time during the crisis explain
5%
part of the resilience of the Belgian
01/95
01/96
01/97
01/98
01/99
01/00
01/01
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
01/10
unemployment rate
EMU Belgium Spain
Employment growth, yoy
8%
6%
4%
2%
0%
-2%
-4%
02/92
02/93
02/94
02/95
02/96
02/97
02/98
02/99
02/00
02/01
02/02
02/03
02/04
02/05
02/06
02/07
02/08
02/09
02/10
Belgium EU
Source: Datatstream
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

15. Inflation is on the rise driven by raw materials
(energy and food)
• Austerity measures taken in different
CPI, yoy
7%
EMU countries, low capacity utilization
6%
rate and large output gap do not plead in
5%
favor of strong inflation pressure in the
4%
months to come.
3%
2%
1% • Actual increase mainly comes from
0% higher oil & food prices and one off
-1% events such as increase in VAT in some
-2% EMU countries
-3%
01/97
01/98
01/99
01/00
01/01
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
01/10
Belgium EMU
• Core CPIs remain at low levels.
Core CPI, yoy
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
01/97
01/98
01/99
01/00
01/01
01/02
01/03
01/04
01/05
01/06
01/07
01/08
01/09
01/10
Belgium EMU
Source: Datatstream
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

16. PPI also impacted by higher raw material prices
PPI ex energy & construction, yoy
10%
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
10/00
04/01
10/01
04/02
10/02
04/03
10/03
04/04
10/04
04/05
10/05
04/06
10/06
04/07
10/07
04/08
10/08
04/09
10/09
04/10
10/10
Belgium EMU
Source: Datastream
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

17. Commodity prices
950 1600
Last
3m ar yoy
month
850 GSCI 3.7% 82.0% 34.8% 1400
GSCI Energy 3.5% 84.0% 29.1%
750 GSCI Non Energy 4.1% 78.0% 47.6%
GSCI Agricultural 5.9% 92.6% 64.9%
GSCI Industrial Metals 2.0% 63.0% 34.0% 1200
650 GSCI Livestock 9.2% 132.2% 31.0%
GSCI Precious Metals -6.5% 1.4% 28.5%
550 1000
450 800
350
600
250
400
150
50 200
02-91
02-92
02-93
02-94
02-95
02-96
02-97
02-98
02-99
02-00
02-01
02-02
02-03
02-04
02-05
02-06
02-07
02-08
02-09
02-10
02-11
GSCI GSCI Energy GSCI Non Energy Gold Bullion $/Troy Ounce (RHS)
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe

18. Unit labor costs remain so far under control
Unit labor costs, qoq
7%
6%
5%
4%
3%
2%
1%
0%
-1%
-2%
-3%
12-07
02-08
04-08
06-08
08-08
10-08
12-08
02-09
04-09
06-09
08-09
10-09
12-09
02-10
04-10
06-10
08-10
Belgium EU
• Unit labor costs are actually declining in most of the countries given the
relative weakness of the job market
• Structural shortage of educated ICT workforce makes it an outsider
Source: OECD
Agoria ICT Winter Network Event – 08/02/2011 Siddy Jobe