A research note reviewing shareholder activism in France and presenting ten french companies that could be target of activist hedge funds.

1. © JO&K Partners 1
10 underperforming French companies that could
be targeted by Activists
February 15, 2016
Strictly private & confidential
Research note

2. © JO&K Partners 2
Strictly private & confidential
The context

3. Since the global financial crisis, shareholder activism has surged
Strictly private & confidential
© JO&K Partners 3
The rise of activists
0
20
40
60
80
100
120
140
2009
2010
2011
2012
2013
2014
Total activist funds’ Asset Under Management (USDbn)
Sources: JP Morgan, HFR Industry Reports © HFR, Inc.
x3 in 5 years
Comments
• A few activist funds managing less than
a total of USD 12 billion in 2003 has
seen the activist asset class balloon to
more than USD 120 billion in assets
under management for activist hedge
funds
• This growth has been fueled by the
overall good performance of these
funds. Over the last five years, activists
have achieved an annualized excess
return of more than 15%.
Sources: JP Morgan, SharkRepellent, FactSet, 13D Monitor
The context

4. Almost 150 companies in Europe have been targeted by activists over the last 5 years
Strictly private & confidential
© JO&K Partners 4
The European landscape
The context
Comments
• Europe is a relatively unfriendly place for activists and
represents only 8% of activist hedge fund focus, contrary
to 41% in North America. Yet as the US landscape
becomes crowded, many are turning their eyes to
Europe
• The UK, which attracts more than half of activists
investing in Europe, is considered the most activist-
friendly jurisdiction in Europe, judged on its regulatory
regime and institutional investor sentiment
• Other countries are less friendly and present more
challenges but are not entirely closed. Nordic countries
and Switzerland in particular have shown a relatively
high level of activist campaigns. France and Germany
remain the second and third most important markets for
activists.
Companies publicly targeted in Europe over
the last 5 years
Source: Skkaden
UK;
54%
France;
9%
Germany;
9%
Switzerland;
6%
Italy;
4%
Others;
18%

5. One of the least activist-friendly jurisdictions
Strictly private & confidential
© JO&K Partners 5
Shareholder activism in France
The context
Comments
• Although by European standards the level of activism in France is
high, almost 40% of activists’ demands are left unsatisfied, making
it one of the least activist-friendly jurisdictions
• Management and employee protection, the role of the state in a
number of companies and the relatively passive behavior of
French institutional investors can explain the comparatively low
level of activism
• However, increasing institutional investor accountability and
changes in French legislation however, are raising France's profile
for ‘long term’ activism
• In particular the recent law that provides automatic double voting
rights for shares held in registered form for more than two years.
This can prove a useful tool in increasing activist influence on the
board without putting up additional capital.
Main companies publicly targeted in
France over the last years
- 2015: Gameloft, Ubisoft
- 2014: Vivendi, Nexans
- 2013: Airbus, Accor
- 2012: Safran, Technicolor
- 2010: Lagardère
- 2008: Carrefour, Accor, Saint Gobain
- 2007: Atos, Valeo
- 2006: Arcelor

6. Some very specifics players in addition to traditional activist hedge funds
Strictly private & confidential
© JO&K Partners 6
Activist shareholders in France
The context
BPI, Bolloré and the Private Equities
• BPI, the investment arm of the French state, can be considered
France’s main ‘activist’. The firm, which has taken minority stakes in
more than 20 public companies, is acting as a long-term investor but
generally favors management and status-quo over shareholders.
• Bolloré, a French investment and industrial holding group, has been
the main activist in recent years. Despite not being a specialist fund,
the group has taken direct and indirect minority positions in several
French listed companies and imposed strategic and management
change.
• Private equity and venture capital firms have significant minority
positions in many French listed companies. They are particularly
active in small and micro caps, but some firms such as Colony
Capital, APAX, Eurazeo or Apollo have bought minority positions in
large caps and succeeded in obtaining board seats.
French investors associations
Aside the activist shareholders,
French investors associations play
an important role in initiating legal
action and being vocal during AGM.
L’ADAM (L’Association Des
Actionnaires Minoritaires), in
particular, have been collaborating
regularly with hedge fund activists.
As stated by Colette Neuville, the
association’s leader, collaboration is
offered “as long as [activists’]
objectives go beyond the short term
and help to create value for all the
shareholders.”

7. © JO&K Partners 7
Strictly private & confidential
10 French companies

8. Less than 5% of listed companies could be targeted
Strictly private & confidential
© JO&K Partners 8
Screening
10 French companies
250 listed companies
Screening 1: Company with no significant reference shareholder i.e.
main shareholder (private equity, family, founder…) with less than 10%
40 listed companies
Screening 2: Becoming the main shareholder to request less than
EUR 1 billion. In addition, low liquidity and small biotech excluded.
25 listed companies
Screening 3: Significant share price underperformance over the last
three years.
10 listed companies

9. Less than EUR500m required to become the most influential shareholder
Strictly private & confidential
© JO&K Partners 9
Technip
10 French companies
Reference shareholders
- BPI (French State): 5.2%
- IFP (French State): 2.5%
Share price performance
(over 3 years)
-49%
Market capitalization
EUR 4.8bn
Business
Technip engages in the fields of project management, engineering and construction for
the energy industry. The company operates its business through two segments: Subsea
(pipe system) and Offshore/Onshore (construction and engineering).
Comments
As with many oil services companies, Technip is facing a challenging environment. Order
intake decline has led to major restructuring. Yet contrary to many, Technip remains solid.
The company still has a long-term backlog and a positive net cash position. This is
currently a comfortable situation, but it could typically be challenged by activist funds.
Key financials*
Valuation multiples*
Based on I/B/E/S
EURm 2013 2014 2015E 2016E
Sales 9336 10725 11922 10445
EBITDA 1078 1108 1217 1099
Net income 563 437 175 527
Net cash 663 1125 811 965
x 2015E 2016E
EV/sales 0.33 0.36
EV/EBITDA 3.2 3.5
P/E 29.2 9.2

10. Less than EUR400m required to become the most influential shareholder
Strictly private & confidential
© JO&K Partners 10
Arkema
10 French companies
Reference shareholders
- FSI (French State): 6.5%
- Employees: 4.4%
Share price performance
(over 3 years)
-38%
Market capitalization
EUR 3.8bn
Business
Arkema engages in the manufacture and supply of chemical products. It operates
through the following segments: High Performance Materials, Industrials Specialties and
Coating Solutions.
Comments
Like many basic materials companies, the group’s share price has been impacted by the
Chinese economic slowdown. Nevertheless the company has performed relatively well,
particularly in the integration of its acquisition of Bostik. Unfortunately investors appear
not to recognize this and activist funds may at some point step in.
Key financials*
Valuation multiples*
Based on I/B/E/S
EURm 2013 2014 2015E 2016E
Sales 6098 5952 7752 8069
EBITDA 902 784 1034 1102
Net income 168 167 252 341
Net debt 923 154 1784 1677
x 2015E 2016E
EV/sales 0.7 0.66
EV/EBITDA 5.3 4.9
P/E 13.8 10.8

11. EUR135m required to become an influential shareholder
Strictly private & confidential
© JO&K Partners 11
Rexel
10 French companies
Reference shareholders
- Employees: 0.9%
Share price performance
(over 3 years)
-48%
Market capitalization
EUR 2.7bn
Business
Rexel engages in the distribution of electrical products. They are grouped into the
following families: Electrical Installation Equipment, Cables and Conduits, Lighting,
Security and Communication, Climate Control, Tools and White and Brown Products.
Comments
For almost five years, in a difficult environment, Rexel has been regularly disappointing
with sales stagnations and earnings declines. Suffering from a relatively high debt level,
the company has little growth ambition and seems to be out of ideas. This could typically
trigger the arrival of an activist.
Key financials*
Valuation multiples*
Based on I/B/E/S
EURm 2013 2014 2015 2016E
Sales 13012 13081 13538 13488
EBITDA 764 647 573 600
Net income 211 200 16 150
Net debt 2192 2213 2199 2084
x 2015E 2016E
EV/sales 0.7 0.36
EV/EBITDA 8.6 8.0
P/E N/S 18.3

12. Less than EUR30m required to become an influential shareholder
Strictly private & confidential
© JO&K Partners 12
Neopost
10 French companies
Reference shareholders
- Employees: 3%
Share price performance
(over 3 years)
-60%
Market capitalization
EUR 619m
Business
Neopost engages in the provision of delivery solutions, mailing services and equipment. It
operates through the following activities: Mail (print finishing solutions), Communication
and Shipping Solutions (logistics services).
Comments
Positioned on a declining market, the company has compensated the fall of its core
business by investing in shipping and digital communication. So far, Neopost has
succeeded in expanding its sales but has suffered margin decline. Even if its strategy
appears to make sense, investors appear disappointed and could welcome an activist.
.
Key financials*
Valuation multiples*
Based on I/B/E/S
EURm 01/2014 01/2015 01/2016E 01/2017E
Sales 1096 1113 1198 1197
EBITDA 331 328 309 302
Net income 164 134 128 121
Net debt 808 964 947 935
x 2015E 2016E
EV/sales 1.29 1.28
EV/EBITDA 5.0 5.1
P/E 4.6 4.8

13. Less than EUR15m required to become the most influential shareholder
Strictly private & confidential
© JO&K Partners 13
Solocal
10 French companies
Reference shareholders
- Employees: 0.2%
Share price performance
(over 3 years)
-89%
Market capitalization
EUR 147m
Business
Solocal engages provision of local digital communication, digital content, advertising
solutions and transactional services to connect consumers with local business. It
operates business through the business segments: Internet and Print & Voice.
Comments
Despite a strong historical position on the internet search market, Solocal faces constant
sales and earnings declines due to multiple strategic mistakes. The company issues
regular profit warnings and has lost investors’ trust. It represents a typical case for an
activist fund to step in.
Key financials*
Valuation multiples*
Based on I/B/E/S
x 2015E 2016E
EV/sales 1.42 1.38
EV/EBITDA 4.6 4.7
P/E 5.4 2.2
EURm 2013 2014 2015 2016E
Sales 999 936 873 850
EBITDA 370 265 270 248
Net income 115 59 27 67
Net debt 1580 1136 1091 1028

14. Less than EUR12m required to become the most influential shareholder
Strictly private & confidential
© JO&K Partners 14
Soitec
10 French companies
Reference shareholders
- BPI: 9.5%
- Founder: 2.3%
Share price performance
(over 3 years)
-78%
Market capitalization
EUR 115m
Business
Soitec engages in the manufacture and sale of silicon and integrated circuits for the
electronic and energy industries. It operates through the following business segments:
Electronics, Solar Energy, and Lighting.
Comments
Facing fierce competition and major difficulties in its solar division, Soitec recorded heavy
losses for many years and financed them with regular capital increases. After a change in
CEO, Soitec focused on electronic products and cost cutting, and succeeded in recording
a positive EBITDA. As it seeks new funding again, an activist fund may step in.
Key financials*
Valuation multiples*
Based on I/B/E/S
EURm 03/2013 03/2014 03/2015 03/2016E
Sales 263 247 223 241
EBITDA -62 -79 -68 44
Net income -209 -237 -259 -40
Net debt 67 207 150 147
x 2015E 2016E
EV/sales 1.08 0.92
EV/EBITDA 5.9 4.6
P/E N/S N/S

15. EUR4m required to become the most influential shareholder
Strictly private & confidential
© JO&K Partners 15
Prologue
10 French companies
Reference shareholders
- Founder 4.4%
- CEO 2.3%
Share price performance
(over 3 years)
+2%
Market capitalization
EUR 36m
Business
Prologue engages in the provision of Cloud, IP Communications, and Enterprise Content
Management and Exchange solutions. It operates through the following segments:
Cloud, License, Support contract, Applications and infrastructure.
Comments
Following an ambitious growth strategy (investment in Cloud Computing technologies,
internationalization) and M&A (merger with O2i), the company has multiplied its sales
threefold. Prologue has recorded net losses over the last three years however, and
disappointed investors who may welcome the arrival of an activist fund.
Key financials*
Valuation multiples*
Based on I/B/E/S
EURm 2013 2014 2015E 2016E
Sales 20,2 22,2 65,0 70,0
EBITDA -0,7 1,3 0,5 2,5
Net income -0,3 -0,3 -1,0 1,0
Net Cash 9,1 11,9 7,5 8,0
x 2015E 2016E
EV/sales 0.44 0.40
EV/EBITDA 57.0 11.2
P/E N/S 36.0

16. EUR3.5m required to become the most influential shareholder
Strictly private & confidential
© JO&K Partners 16
Mauna Kea Tech
10 French companies
Reference shareholders
- Seventure Partner: 4.1%
- Founder 3.7%
Share price performance
(over 3 years)
-84%
Market capitalization
EUR 33m
Business
Mauna Kea Technologies engages in the design, development, and sale of optical biopsy
devices and tools to visualize and detect abnormalities in the gastro-intestinal and
pulmonary tracts primarily in cancer patients.
Comments
Since its IPO in 2011, Mauna Kea has changed strategy and failed to deliver almost
every year. Forced to reduce its cost and cash burn, the company has drastically cut its
sales force and given priority to commercial partnerships. This new strategy has not yet
delivered. Investors may be running out of patience and welcome an activist fund.
Key financials*
Valuation multiples*
Based on I/B/E/S
EURm 2013 2014 2015E 2016E
Sales 10,9 11,0 8,5 12,9
EBITDA -10,8 -12,9 -11,9 -10,2
Net income -11,5 -14,0 -12,6 -10,9
Net cash 25,8 11,8 7,6 0,0
x 2015E 2016E
EV/sales 2.9 2.6
EV/EBITDA N/S N/S
P/E N/S N/S

17. EUR3m required to become the most influential shareholder
Strictly private & confidential
© JO&K Partners 17
Stentys
10 French companies
Reference shareholders
- BPI: 7.1%
- Founders: 4.2%
Share price performance
(over 3 years)
-78%
Market capitalization
EUR 32m
Business
Stentys engages in the design, development, and marketing of self-expanding stents
used in treating cardiovascular diseases. It provides solutions to cardiologists to treat
patients with acute myocardial infarction and other complex coronary disease.
Comments
Forced to discontinue its main clinical study in the US in 2014 due to a change in market
trend, Stentys has lost investors’ trust. Despite rapid development of new products and
continuing sales growth, the company is burning cash and will soon see its capital raised.
Instead, an activist fund may step in and request that the company seeks out a buyer.
Key financials*
Valuation multiples*
Based on I/B/E/S
EURm 2013 2014 2015E 2016E
Sales 3,4 3,9 6,1 8,6
EBITDA -12,0 -13,3 -10,8 -9,8
Net income -11,7 -17,8 -11,1 -10,1
Net cash 31,9 18,6 10,7 5,0
x 2015E 2016E
EV/sales 3.5 3.1
EV/EBITDA N/S N/S
P/E N/S N/S

18. EUR3m required to become the most influential shareholder
Strictly private & confidential
© JO&K Partners 18
Archos
10 French companies
Reference shareholders
- Founder 9.1%
Share price performance
(over 3 years)
-72%
Market capitalization
EUR 32m
Business
Archos manufactures consumer electronics and portable digital entertainment solutions.
Its products include Android tablets, smart-phones and connected objects. Archos is also
the majority owner of PicoWAN, a network provider start-up for connected objects.
Comments
Once a pioneer in the portable audio and tablet market, the company has suffered major
difficulties in the face of strong mobile phone competition. Despite increasing its sales
again due to new low cost products and a targeting of African markets, the company
remains in loss. This and the low share price could trigger the entrance of an activist.
.
Key financials*
Valuation multiples*
Based on I/B/E/S
x 2015E 2016E
EV/sales 0.26 0.21
EV/EBITDA N/S N/S
P/E N/S N/S
EURm 2013 2014 2015E 2016E
Sales 143,7 132,1 158,6 200,0
EBITDA 1,9 -2,4 -2,0 0,1
Net income -1,4 -13,0 -2,5 -0,5
Net Debt 2,2 16,9 10,0 10,0

19. © JO&K Partners 19
Strictly private & confidential
Appendix

20. © JO&K Partners 20
JO&K Partners
• JO&K Partners is a unique consulting firm which offers advisory
services to listed companies in corporate governance, strategy,
finance and investor relations with the goal to achieve sustainable
share price re-rating and fair valuations.
• Around our proprietary concept of Stock Reputation®, we offer
tailor-made programs to engage the investor community and create
sustainable value for company shareholders.
• Contrary to traditional agencies, our partners come directly from the
financial industry. They possess extensive experience in finance,
including a former CFO, equity analyst, investor relations officer and
controller, they know perfectly well what it takes to get investors to
re-rate stocks and to achieve fair valuation for our clients.
Julien Onillon – Founder
• As former Chief Financial Officer of
leading stainless steel producer
Aperam, former head of Investor
Relations at ArcelorMittal and former
equity analyst at HSBC, Julien has
over 20 years’ experience in finance,
equity and capital markets.
• In 2015, he founded JO&K Partners
• Contact details:
Julien.onillon@joandkpartners.com
+33 6 24 24 75 71
Strictly private & confidential
Appendix
More information is available on www.joandkpartners.com