Press Releases

QUEBEC CITY, CANADA, March 21, 2005 — EXFO Electro-Optical Engineering Inc. (NASDAQ: EXFO, TSX: EXF.SV) is pleased to announce that it has been named recipient of the Strategic Vision Award by the Chamber of Commerce of Entrepreneurs in Quebec City.

The award, which was announced at a 1000-person gala evening on March 17, 2005, is handed annually to the company who implements a winning business strategy during the past year.

Contrary to most of its peers in the telecommunications industry, EXFO opted to maintain significant investments in R&D, sales personnel and customer service during the recent industry downturn in order to improve its competitive position in the global test and measurement market.

This innovative strategy, which allowed the company to invest in key growth pockets like fiber-to-the-premises (FTTx) and next-generation IP network testing, generated 20% sales growth in fiscal 2004 despite a relatively flat marketplace. In addition, EXFO posted sales and bookings growth in excess of 35% for the first quarter of 2005.

This marks the second award that EXFO has earned in recent weeks for its visionary growth strategy. The company also received for a second consecutive year the Growth Strategy Leadership Award from Frost & Sullivan, a leading authority in the communications test equipment sector.

“We are delighted to win this Strategic Vision Award because it confirms that we adopted the right strategy in the past few years, while the telecom industry was undergoing significant restructuring,” said Germain Lamonde, EXFO’s Chairman, President and CEO. “This award, combined with the industry award from Frost & Sullivan, also demonstrates that we can grow market share in good and more challenging times. Prior to the downturn, we had strung together 16 consecutive years of sales growth with a compound annual growth rate over 50%. All this contributes in making EXFO a very stimulating place to work. I would like to thank everyone involved for their contribution.”

About EXFO
EXFO is a recognized test and measurement expert in the global telecommunications industry through the design and manufacture of advanced and innovative solutions as well as best-in-class customer support. The Telecom Division, which represents the company’s main business activity, offers fully integrated and complete test solutions to network service providers, system vendors and component manufacturers in approximately 70 countries. One of EXFO’s strongest competitive advantages is its PC/Windows-based modular platforms that host a wide range of tests across optical, physical, data and network layers, while maximizing technology reuse across several market segments. The Photonics and Life Sciences Division mainly leverages core telecom technologies to offer value-added solutions in the life sciences and high-precision assembly sectors. For more information about EXFO, visit www.exfo.com.