Index Multimedia: First Half 2005-2006 Results and Acquisition of Wonderphone TV

Index Multimedia: First Half 2005-2006 Results and Acquisition of Wonderphone TV

PARIS, March 28/PRNewswire/ --

- First Half of 2005-2006

- A Period of Growth

- Good Profitability

Index Multimedia has published its results as at 31 December 2005, the
1st half of the 2005/2006 financial year. It is to be noted that the date of
closure of the financial year is now 30 June. The period covered therefore
corresponds to the months of July to December. For the sake of transparency,
and without the accounts for the same period in 2004, Index Multimedia will
compare its main indicators recalculated in respect of the 12 months in 2005
with those published in respect of the 12 months in 2004.

In EUR million 1/7/05 to 1/1/05 to 1/1/05 to
31/12/05 30/6/05 31/12/05
(6 months, (6 months, (12 months,
IFRS) IFRS) recalculated)

Sales 77.4 74.8 152.2
Gross margin 37.0 34.0 71.1
in % of sales 47.8 % 45.5 % 46.7 %
Operating income before tax 5.8 5.8 11.5
and extraordinary items 7.5 % 7.8 % 7.6 %
in % of sales
Net cost of borrowing 0.78 0.83 1.61
Net income - Group share 3.60 3.43 7.0
in % of sales 4.7 % 4.6 % 4.6 %

Growth and significant investment to secure development

In the first half of the 2005-2006 financial year, Index
Multimedia has published sales of EUR 77.4 million, 7 % up on the same period
the previous financial year (EUR 72.2 million, from 1 July to 31 December
2004). This growth was achieved entirely organically.

Over the 12 months of 2005, the 5 % growth target was
exceeded, with sales of EUR 152.2 million, up 6.3 % compared to the 12 months
of 2004.

This growth has mainly been achieved in France (EUR 59.9
million, or 77 % of sales over the period), and by BtoC activities, 78 % of
total sales, up 9 % over the period. Index Multimedia, one of the leaders in
Europe, intends to strengthen its position in the market of value-added
mobile services and contents, benefiting from the expansion of 3G, increasing
its penetration of BtoB and BtoO (business to operators) markets and focusing
its international development on markets with strong potential.

This strategy is being implemented by large-scale
rationalization of products and services offered, intensification of the
commercial presence and development of technological resources.

Good profitability

As anticipated, the high level of activity is therefore linked to major
investments required to secure market share and anticipate future growth.

This has resulted in a level of operating costs representing 92.6 % of
sales. Operating income was 7.5 % of sales. Net Income (Group Share) was EUR
3.60 million over the period, or 4.7 % of sales. The gross margin for
self-financing was EUR 5.4 million compared to EUR 5.5 million in the
previous half-year.

Over the whole year (12 months of 2005), operating income came to EUR
11.5 million, slightly below the target of EUR 12 million announced. It needs
to be analysed in respect of:

- the increase in marketing expenses which enabled the Group's
market share in France to be maintained;

- numerous recruitments carried out in anticipation of growth
(staff costs up to 24.5 % over 12 months), now under control.

A healthy financial structure

Index Multimedia has a very healthy financial structure with, on 31
December 2005, a balance sheet total of EUR 150.2 million, EUR 86.3 million
of which is equity capital. At the end of the period, the Group had EUR 77.4
million in cash, and full borrowing capacity, with negative gearing (no
financial borrowing).

Returning to previous performance levels: action taken to optimize the
structure, take up the challenges in the international market and take new
opportunities in the market. Acquisition of Wonderphone.

Action has already been taken to return to previous performance levels.
Controlling costs, re-energizing teams and structuring processes should
enable optimization of resources according to the new challenges in the
market.

From the point of view of the products and services offered,
this optimization has resulted in a focus on four product families:

- mobile customization: ring tones, logos, pictures, music,
video, ring back tones...

- communities: chat, meetings, blogs...

- Internet: Meexup(R), Tchatche(R)...

- Interactive TV: Tchatche TV, 123 SAT

with direct distribution by BtoC campaigns and a strategy of
accelerating indirect distribution through BtoB / BtoO channels. These
efforts should soon bear fruit both in terms of activity and of sales
profitability.

Internationally, rationalization is continuing, with different problems
being experienced in each geographical area. The appointment of a dedicated
International Director, along with an International Marketing Manager should
accelerate this process: slowdown in growth on the American continent,
acceleration in Asia, and consolidation of the Group's positions in the
European markets where it already has a presence.

This strategy is now being implemented through the acquisition of
WonderPhone TV, a French company specialist in video for mobiles and
distributed through close collaboration with operators (BtoO).

Created by Philippe Plaisance in 2004, Wonderphone TV is the
European leader for mobile TV Programs and the 4th biggest mobile games
editor. Wonderphone owns a catalogue of over 3 million videos, including
prestigious licences. The company works with over 70 mobile operators in
around 40 countries and operates 35 video on demand channels broadcasted
daily on the mobile operators portals. In France, Wonderphone TV runs,
amongst other things, the SFR (SFR TV & Video) and Orange (Orange World
Video) video offers. At the end of its first financial-year closed 31st of
December 2005, WonderPhone TV sales amounted EUR 13.5 millions.

In addition to its accretive aspects, this operation is characterized by
a high level of strategic and operational complementarity with Index
Multimedia: BtoC v. BtoO, mature market v. segments of emerging markets,
Paris v. Provinces... WonderPhone TV will be integrated into Index Multimedia
accounts as from 1st of April, 2006.

Prospects for 2005-2006, 3-year targets

In terms of activity, this plan of action is not likely to bear fruit to
any great extent before the 2006-2007 financial year. Now, the integration of
Wonderphone should have a positive effect on the accounts of Index Multimedia
for the whole year 2006; Index Multimedia anticipates a 10% minimum rate of
growth.

After this financial year, Index Multimedia reaffirms its confidence in
the growth of the Group, reinforced by its position in France, the
rationalization of products and services offered, the potential for growth in
international markets and the expected acceleration in the B to O market.

About Index Multimedia :

A subsidiary of Index Corporation (one of the largest suppliers of mobile
telephony services and content in Japan), Index Multimedia is one of the main
designers of added-value mobile products and services aimed at the general
public and the world of business in Europe. Index Multimedia is quoted in
Section B of Eurolist, ISIN: FR0004061513.

Contacts

ACTIFIN INDEX MULTIMEDIA
20, avenue Franklin Roosevelt 36, rue Jacques Babinet
75008 Paris 31100 Toulouse

Investor relations
Stéphane RUIZ / Nicolas MEUNIER Jeremy Prince
Tel.: +33(0)1-56-88-11-11 Tel.: +33(0)5-61-43-50-50
sruiz@actifin.fr Jeremy.PRINCE@indexmultimedia.com
nmeunier@actifin.fr
Press relations
Catherine Giuliani
Tel: +33(0)1-55-37-44-20
Catherine.giuliani@indexmultimedia.com

Source: Index Multimedia

Contacts ACTIFIN, 20, avenue Franklin Roosevelt, 75008 Paris; Stéphane RUIZ / Nicolas MEUNIER. Tel.: +33(0)1-56-88-11-11, sruiz@actifin.fr, nmeunier@actifin.fr; INDEX MULTIMEDIA, 36, rue Jacques Babinet, 31100 Toulouse, Investor relations, Jeremy Prince, Tel.: +33(0)5-61-43-50-50, Jeremy.PRINCE@indexmultimedia.com; Press relations, Catherine Giuliani, Tel: +33(0)1-55-37-44-20, Catherine.giuliani@indexmultimedia.com

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