1
2
Sales
from reported to like-for-like
(in € millions)
2005/2006
2006/2007
Change
(oct 05 - sept 06) (oct 06 - sept 07)
SALES (reported)
Currency translation impact ($ and £)
630.3
0.7
Changes in consolidation scope
(Korea Ratings)
SALES
(like-for-like)
744.8 + 18.2%
34.1
- 19.2
631.0
759.7 + 20.4%
Sales by company
(reported)
(in € millions)
2005/2006
2006/2007
(oct 05 - sept 06) (oct 06 - sept 07)
Change
FITCH GROUP
Fitch Ratings (excl. Korea Ratings)
534.3
623.4
19.2 (*)
Korea Ratings
Algorithmics
99.4
105.1
Intercompany eliminations
-3.4
-2.9
630.3
744.8
SALES
(reported)
(*) Sales split of Korea Ratings (6 months)
Ratings : €8.9m
Other : €10.3m
+ 16.7%
+
5.7%
+ 18.2%
Sales by company
(like-for-like)
(in € millions)
2005/2006
2006/2007
(oct 05 - sept 06)
(oct 06 - sept 07)
Fitch Ratings
534.7
648.9
+ 21.4%
Algorithmics
99.7
113.8
+ 14.1%
Intercompany eliminations
-3.4
-3.0
631.0
759.7
Change
FITCH GROUP
SALES
(like-for-like)
+ 20.4%
Sales by geographic regions
(reported)
2005/2006
(oct 05 - sept 06)
2006/2007
%
(oct 06 - sept 07)
%
1 USA
322.9
51.2%
343.8 46.2%
2 UK
85.7
13.6%
111.4 15.0%
3 Germany
25.6
4.1%
28.8
3.9%
4 South Korea
1.1
0.2%
21.7
2.9%
5 Netherlands
14.2
2.3%
20.3
2.7%
6 France
14.6
2.3%
19.3
2.6%
7 Spain
12.8
2.0%
16.6
2.2%
8 Italy
14.7
2.3%
14.3
1.9%
9 Japan
10.3
1.6%
14.1
1.9%
10 Ireland
7.8
1.2%
13.9
1.9%
% of TOTAL SALES
(reported)
80.9%
81.1%
From sales
to recurring operating income
(in € millions)
Sales (reported)
Operating expenses
Recurring operating income
2005/2006
2006/2007
(oct 05 - sept 06) (oct 06 - sept 07)
630.3
744.8
-511.0
-595.7
119.3
149.1
0.4
6.4
-2.6
119.7
152.9
Change
+ 18.2%
+ 25.0%
(reported)
Currency translation impact ($ and £)
Changes in consolidation scope
(Korea Ratings)
RECURRING OPERATING
INCOME (like-for-like)
+ 27.7%
Recurring operating income by company
(reported)
(in € millions)
FITCH GROUP
Fitch Ratings (excl. Korea Ratings)
2005/2006
2006/2007
(oct 05 - sept 06)
(oct 06 - sept 07)
130.3
159.1 + 22.1%
164.2
190.4 +
Korea Ratings
Algorithmics
Change
16.0%
2.6
- 33.9
- 33.9
Other (Parent company and holdings)
- 11.0
- 10.0
RECURRING OPERATING
INCOME (reported)
119.3
149.1 + 25.0%
Recurring operating income by company
(like-for-like)
(in € millions)
2005/2006
2006/2007
(oct 05 - sept 06)
(oct 06 - sept 07)
FITCH GROUP
Change
130.7
162.9 + 24.6%
Fitch Ratings
164.7
199.6 +
Algorithmics
- 34.0
- 36.7
- 11.0
- 10.0
Other (Parent company and holdings)
RECURRING OPERATING
INCOME (like-for-like)
Operating margin (ROI / Sales)
119.7
19.0 %
-
21.2%
7.9%
152.9 + 27.7%
20.1 %
From recurring operating income
to operating result (reported)
(in € millions)
2005/2006
2006/2007
Change
(oct 05 - sept 06) (oct 06 - sept 07)
Recurring operating income
119.3
149.1
3.7
15.9
123.0
165.0
+ 25.0%
(reported)
Other operating income and
expense
OPERATING RESULT
(reported)
+ 34.1%
From operating result to net earnings
(reported)
(in € millions)
Operating result
2005/2006
2006/2007
(oct 05 - sept 06)
(oct 06 - sept 07)
123.0
165.0 + 34.1%
(reported)
Net interest expense
Other financial income / (expense)
Taxes
Equity in net earnings of affiliated companies
Net earnings from discontinued operations and in
process of disposal
Change
- 10.7
5.0
7.6
2.5
- 41.3
- 74.7
1.3
0.5
461.9
(20% Fitch Group and 100% Facom Group)
Minority interests
- 10.0
- 18.8
NET EARNINGS
Groupe share (reported)
531.8
79.5
Evolution of Fimalac’s shareholding
Majority shareholder
Treasury stocks
Including reserved treasury stocks (stock
09/ 30/ 2006
09/ 30/ 2007
65.7 %
66.3 %
3.7 %
6.9 %
1.1 %
1.1 %
30.6 %
26.8 %
100.0 %
100.0 %
options)
Others
Cash and cash equivalents / (net debt) by company
(in € millions)
09/ 30/ 2006
09/ 30/ 2007
Fitch Group
- 273
- 160
Parent company and holdings
+ 413
+ 243
Net cash position (excl. building)
+ 140
+ 83
North Colonnade (London building)
- 225
Fimalac share performance vs. CAC 40 and SBF 120
December 1992 to November 15, 2007
1900
1700
1500
FIMALAC
1300
1 234
1100
900
700
500
SBF 120
412
300
CAC 40
100
299
"Total Shareholder Return" over 10 years
SBF120 companies
As at Nov. 15, 2007
Ranking
TSR
Over 10 years
Annualized
in %
in %
1
Be ne te au
3 654,3%
43,7%
2
Valloure c
2 203,4%
36,8%
3
Eiffage
1 732,0%
33,7%
4
Are va
1 488,9%
31,9%
5
Vinci
1 245,2%
29,7%
6
Maure l Et Prom
943,9%
26,4%
7
Bouygue s
862,4%
25,4%
8
Unibail Rodamco
771,1%
24,2%
9
Ubi Soft Ente rt.
657,0%
22,4%
10
Kle pie rre
560,1%
20,8%
11
We nde l
512,7%
19,9%
12
Pe rnod Ricard
502,3%
19,7%
13
Re nault
437,6%
18,3%
14
Fimalac
429,3%
18,1%
15
Socie te Ge ne rale
419,9%
17,9%
Source FACTSET
16
History
Fitch Group Structure
80%
20%
100%
100%
100%
Fitch Group (including Korea Ratings)
Revenue Growth
In $ Mil
1200
$989
1000
$774
800
$693
600
$511
$455
$356
400
$305
$222
$156
200
$24
$169
$43
20
05
/2
00
6
20
06
/2
00
7
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
19
96
0
Fitch Group (including Korea Ratings)
Operating Income Growth (EBIT)
In $ Mil
250
$211
200
$150
$160
150
$113
100
$72
50
$29
$5
$32
$110
$83
$37
$10
20
05
/2
00
6
20
06
/2
00
7
20
05
20
04
20
03
20
02
20
01
20
00
19
99
19
98
19
97
19
96
0
Fitch Group (including Korea Ratings)
Sales to Operating Income
in US$ millions
2005/2006
2006/2007
(Oct 05 – Sept 06)
(oct 06 - sept 07)
% Change
774.0
988.5 + 27.7%
Personnel costs
391.5
492.3
+
25.7%
External expenses
136.9
169.4
+
23.7%
Total charges
528.4
661.7
+
25.2%
245.6
326.8 + 33.1%
Revenue
EBITDA
Profit sharing plan
Depreciation
Intangible assets amortization
Operating Income
51.7
14.3
19.5
160.1
70.1
21.0
24.5
211.2 + 31.9%
Key Figures by Company
(in US$ millions)
Revenue FITCH GROUP
Fitch Ratings
Korea Ratings
Algorithmics
Intercompany revenue
EBITDA FITCH GROUP
Fitch Ratings
Korea Ratings
Algorithmics
Operating Income FITCH GROUP
Fitch Ratings
Korea Ratings
Algorithmics
2005/2006
2006/2007
(Oct 05 – Sept 06)
(oct 06 - sept 07)
774.0
655.6
122.3
- 3.9
245.6
264.6
- 19.0
988.5
827.4
25.6
139.4
- 3.9
326.8
338.1
5.2
- 16.5
% Change
+ 27.7%
+ 26.2%
+ 14.0%
+ 33.1%
+ 27.8%
160.1
211.2 + 31.9%
201.8
- 41.7
252.8 + 25.3%
3.4
- 45.0
23
Fitch Ratings (excl. Korea Ratings)
Revenue growth
(in millions of US$)
900
$827
800
700
$656
$594
600
$502
500
$448
400
$353
$305
300
200
100
0
2001
2002
2003
2004
2005
2005/2006
2006/2007
Fitch Ratings (excl. Korea Ratings)
Revenue by Segment
(in US$ millions)
2005/2006
2006/2007
(Oct 05 – Sept 06)
(oct 06 - sept 07)
% Change
Structured Finance
338.4
422.9 + 25.0%
Corporate Finance
244.8
315.0 + 28.7%
72.4
89.5 + 23.6%
655.6
827.4 + 26.2%
Subscriptions /Training
TOTAL FITCH RATINGS
Fitch Ratings (excl. Korea Ratings)
Revenue by Region
(in US$ millions)
2005/2006
2006/2007
(Oct 05 – Sept 06)
(oct 06 - sept 07)
% Change
North America
364.8
429.4
+ 17.7%
Europe, Middle East & Africa
241.3
332.5
+ 37.8%
Latin America
26.6
34.8
+ 30.8%
Asia Pacific
22.9
30.7
+ 34.1%
655.6
827.4
+ 26.2%
TOTAL FITCH RATINGS
Fitch Ratings (excl. Korea Ratings)
EBITDA and Operating Income
(in US$ millions)
2005/2006
2006/2007
(Oct 05 – Sept 06)
(oct 06 - sept 07)
% Change
Revenue
655.6
827.4 + 26.2%
EBITDA
264.6
338.1 + 27.8%
EBITDA Margin
40.4%
40.9%
Profit sharing plan
51.7
70.0
Depreciation & Amortization
11.1
15.3
Operating Income
201.8
252.8 + 25.3%
Operating Income Margin
30.8%
30.6%
Fitch Ratings (excl. Korea Ratings)
Investment in Human Capital
2500
2214
2064
1827
Headcount
2000
1617
1447
1500
1350
1000
500
0
Dec 31 02
Dec 31 03
Dec 31 04
Dec 31 05
Sept 30 06
Sept 30 07
Fitch Ratings
Investment in Korea Ratings



In April 2007, Fitch acquired 53% of Korea Ratings Corporation, the leading
Korean credit rating agency

Fitch and Korea Ratings first entered into a strategic alliance in 1999

Since then, Fitch and Korea Ratings have collaborated on the provision of
credit ratings and risk management services, as well as hosting joint
conferences and seminars.

Fitch made its first equity investment in Korea Ratings in 2001.
Korea aspires to become Northeast Asian financial hub.

2006 Domestic bond issuance – USD18.2 BN

2006 International bond issuance – USD16.8BN
Expands Fitch’s footprint in the region

15 offices throughout Asia in 11 countries

230 professionals in the region
Important Trends in 2007

Strong market volumes through June

Emerging credit issues in subprime Residential Mortgage Backed Securities
evident in late 2006 began to accelerate

Extension of subprime weakness into Structured products (CDOs, SIVs, Asset
Backed Commercial Paper) and Corporates (Financial Institutions and
Monolines)

Significant deterioration in Structured Finance market volumes

High grade Corporate issuance strong due to bank funding / capital needs,
reduction of commercial paper, flight to quality by investors
Strong Market Volumes Through June
Source: Thomson Financial
Emerging Credit Issues in Subprime Residential Mortgage
Backed Securities Evident in Late 2006 Begin to Accelerate

Rapidly growing subprime market in 2006 fueled by aggressive underwriting

High combined loan-to-value ratios / piggyback seconds

Higher number of loans with limited documentation

Deterioration fueled by declines in home prices, rising interest rates, and lenders
failing

Losses will exceed the expectations inherent in our ratings, necessitating a total
portfolio review and criteria / model changes

Re-rated all 2006 and 2007 vintage subprime deals

Over 250 transactions comprised of almost 4,000 tranches

We have affirmed 88% (in $ volume) or 66% of the rated tranches

A small portion of AAAs have been downgraded or put on Rating Watch
Negative, mostly comprised of second-lien loans, some 2007 first liens
Extension of Subprime Weakness into Structured Products
(CDOs, SIVs, and ABCP) and Corporates (Banks and Monolines)






Downgrades of subprime RMBS have reverberated through the market as that
collateral was prevalent in recent vintage CDOs, SIVs, and other market funded
vehicles
Credit concerns were exacerbated by the market disruption which created
pricing dislocations
Fitch reviewed all rated Structured Finance CDOs
 431 transactions with current outstandings of US$ 300 billion
 150 have been placed on Rating Watch
 Review to be concluded by mid-November, including projected downgrades of
AAA tranches
Fitch reviewed all ratings in Market Value Conduits, SIVs, and Asset Backed
Commercial Paper
 A few downgrades, but we have a small presence in this market
Losses reported at commercial banks and investment banks have merited select
downgrades and renewed scrutiny of risk-management processes and appetites
Fitch announced a review of the monoline insurance industry upon completion
of the September 30 capital model
Significant Deterioration in
Structured Finance Market Volumes
180
160
140
US$ Billons
120
100
Subprime MBS - US
Prime / Alt A MBS - US
80
60
40
20
0
1Q06
2Q06
3Q06
4Q06
Source: Inside Mortgage Finance
1Q07
2Q07
3Q07
Worldwide CDO Issuance
CDO Issuance Volume in Past 14 Months
90
80
70
63,7
65,9
60,9
60
US$ Billons
52,3
50
50,7
47,0
46,8
44,3
40
34,3
28,6
30
21,0
18,4
20
13,5
10,9
10
0
S
Source: Asset-Backed Alert
O
N
D
J
F
M
A
M
J
J
A
S
O
Volatility in ABS and CMBS Market Volumes
US Securitized Asset Issuance
50
45
40
US$ Billons
35
30
CMBS
ABS
25
20
15
10
5
0
April
May
Source: Inside Mortgage Finance
June
July
Aug
Sept
Resilient Demand for High Grade Corporates

Record year (over US$ one trillion) for US investment grade
bonds, the “flight to simplicity”

Growing capital needs for financial institutions, stable economic
environment, and contraction in commercial paper underlie the
strong supply

Growing demand from new emerging economies

Continuing to invest in this business despite slowdown in
structured finance

Noninvestment grade issuance hurt by decline in CLO activity
Key Issues for 2008

Balancing the short term business impact against longer term
challenges and opportunities
 Dichotomy between Structured and Corporates, US and the rest
of the world
 Ever increasing demand for quality due to the complexity of the
capital markets and market volatility
 Longer term opportunity to distinguish ourselves

Reputational and regulatory challenges to the industry
 Market confidence in rating agencies has been shaken
 Numerous regulatory bodies are interested in “fixing” the credit
problems

Reacting without overreacting
 Organizational changes
 Introducing new products to fill market voids
 Acquisitions to complement the business
Regulatory Issues

Credit Rating Agency Reform Act passed by US Congress in
September 2006
 Fitch was officially recognized as one of seven NRSROs under
new guidelines in June of 2007

IOSCO (International Organization of Securities Commissioners)
will release a report in late 2007 on compliance with their Code of
Conduct Fundamentals, and in spring 2008 regarding issues
specific to structured finance ratings

Recent market turmoil has led to increased attention from
securities regulators globally, the European Commission, the US
Congress, and Certain US States’ Attorneys-General

We remain open and constructive in the dialogue, eager to find
solutions to help restore market confidence in ratings

Greater regulation seems inevitable
Conclusion

The entire organization has rallied around the urgency
of the credit challenges, aiming to be timely and
transparent with our research and ratings

Visibility into the months ahead is limited
 We do expect that corporate ratings will continue on a
growth trend
 Less sure about the timing and extent of structured
markets recovery
41
Algorithmics
Introduction
Algorithmics is a leading provider in the development
and delivery of enterprise risk solutions that enable
growth, innovation and the efficient use of risk capital.
Financial organizations from around the world rely on
our software, content, delivery and advisory services to
make risk aware business decisions and meet regulatory
requirements.
Algorithmics
Highlights
101 New License Orders
390 Software Solution clients (22 new)
169 Content and Data clients (47 new)
721 of the world’s 100 largest financial institutions
724 professionals in 19 global offices
Notes:
1 Top 100 banks according to “The Banker”
Algorithmics
Revenue by Region
(in millions of US$)
2005/2006
2006/2007
(Oct 05 – Sept 06) (oct 06 - sept 07)
% Change
North America
39.6
37.0
Europe, Middle East & Africa
64.7
81.1 + 25.3%
Latin America
Asia Pacific
TOTAL ALGORITHMICS
* Includes inter-company revenue of $3.9 million
5.6
4.5
- 6.6%
- 19.6%
12.4
16.8 + 35.5%
122.3*
139.4* + 14.0%
Algorithmics
EBITDA and Operating Income
(in millions of US$)
Revenue
EBITDA
2005/2006
2006/2007
(Oct 05 – Sept 06)
(oct 06 - sept 07)
122.3
- 19.0
(*)
139.4
- 16.5
Profit sharing plan
0.1
0.1
Depreciation
4.0
5.7
18.6
22.7
- 41.7
- 45.0
Intangible assets amortization
Recurring Operating
Income
* Includes inter-company revenue of $3.9 Million in 2005-2006 and 2006-2007
% Change
(*)
+ 14%
Algorithmics
Solution Achievements
Credit and Capital Solutions

125 clients (108 in 2006)
Market Risk Solutions

161 clients (128 in 2006)
Operational Risk Solutions

104 clients (89 in 2006)
Collateral Management Solutions

70 clients (68 in 2006)
Algorithmics
Recognized Leadership
2007 Chartis Research: Credit Risk Management Systems
World’s most complete Credit Risk Management solutions
2007 OpRisk & Compliance Magazine: Technology Rankings
Algorithmics voted top for Regulation and Economic Capital Modelling
2007 Synergy Award for Innovation
Recognized by the Canadian Federal Government, Department of Natural Sciences and
Engineering for innovation in partnership with the University of Toronto
2007 – Awarded a patent for "System and Method for Trading Off Put and
Call Values of a Portfolio" methodology.
An innovative framework for ranking investment funds on a risk-adjusted basis.
2007 Media and Analyst Recognition
Algorithmics
Market Drivers

Adoption of ‘risk aware’ business applications in financial
services, coupled with increased risk awareness.

Increasingly complex financial markets and products which
require more sophisticated tools

Regulation for banks (more countries adopting Basel II),
asset managers and insurance companies (e.g. Solvency II)
Algorithmics
Investment Focus

Expanding sales and services to support revenue growth
Establishing presence in new geographical markets

Investing in managed service solutions for asset managers and hedge funds

Developing broader risk solution for the insurance industry

Continued focus on core solutions
