Gemalto third quarter 2014 revenue
(Thomson Reuters ONE) -
* Revenue growth increased to +6% at constant rates, with Payment growing
+20% on rapid EMV migration in the United States
* Platforms & Services grew +16%, with +45% in Mobile Financial Services
* Mobile was marked by first deliveries of multitenant cards for NFC payment
and transport in China, new launches of NFC services in Europe, and strongly
rising demand for embedded secure elements
* 7-year ?400 million bond was successfully issued, with 2 1/8% coupon
Revenue figures above and in this entire document are for ongoing operations[1]
and variations are at constant exchange rates except where otherwise noted.
Revenue figures including contribution of assets held for sale and variations at
historical rates are provided in the appendices of this document. All figures
presented in this press release are unaudited.
Amsterdam, October 23, 2014 - Gemalto (Euronext NL0000400653 - GTO), the world
leader in digital security today announces its revenue for the third quarter of
2014.
Third quarter Main segments Main activities
2014
------------------ -------------------------- Patents &
Ongoing Embedded Others
operations Total Mobile Payment & software & Platforms &
(? in Identity Products Services
millions)
---------------------- --------------------------------------------- ----------
Revenue 626 331 289 490 130 6
Year-on-year
variation at +6% = +12% +3% +16% n.m.
constant
exchange rates
-------------------------------------------------------------------------------
Olivier Piou, Chief Executive Officer, commented: "This quarter EMV revenue in
the US tripled and Asia grew +18%. We also seized the opportunity to accelerate
our growth in the cloud and enterprise security market, with the acquisition of
SafeNet. Embedded security in connected devices is proliferating, fuelling the
opportunities outlined in our multi-year development plan. Looking ahead, the
business case for secure elements to protect mobile and online payment
transactions has been considerably strengthened during the quarter, and the
ecosystem is clearly converging towards NFC for convenient proximity
interactions. These developments mark a major step forward after a year of
confusion, and they increase the markets we can serve with our well recognized
technologies and experience. Gemalto's pace of growth accelerated during the
third quarter, putting us on track to deliver on our outlook for 2014 and we
remain confident in delivering on our 2017 objectives."
Basis of preparation of financial information
Ongoing operations
For a better understanding of the current and future year-on-year evolution of
the business, the Company provides revenue from "ongoing operations" for both
the 2014 and 2013 reporting periods.
The adjusted income statement for ongoing operations excludes, as per the IFRS
income statement, the contribution from discontinued operations, and also the
contribution from assets classified as held for sale and from other items not
related to ongoing operations.
Appendix 3 bridges the revenue for ongoing operations to the revenue for all
operations.
In this publication reported figures for ongoing operations do not differ from
figures for all operations, for both the year 2013 and the year 2014.
Segment information
From January 1, 2014, segment information reports on progress towards the
objectives set as part of the Company's development plan covering the years
2014 to 2017, publicly announced on September 5, 2013.
The Mobile segment reports on businesses associated with mobile cellular
technologies. The former Mobile Communication and Machine-to-Machine segments
are part of Mobile. The security evaluation business for third parties, whose
contribution to Mobile Communication was minor, is now managed together with the
Patents business and is as of 2014 reported in the Patents & Others segment.
The Payment & Identity segment reports on businesses associated with secure
personal interactions. The former Secure Transactions and Security segments are
part of Payment & Identity.
In addition to this segment information, the Company also reports as of 2014
revenue of Mobile and Payment & Identity by type of activity: Embedded software
& Products (E&P) and Platforms & Services (P&S).
Appendix 4 presents segment information in both the 2013 and 2014 formats.
Historical exchange rates and constant exchange rates figures
Revenue variations are at constant exchange rates except where otherwise noted.
The Company sells its products and services in a very large number of countries
and is commonly remunerated in currencies other than the Euro. Fluctuations in
exchange rates of these other currencies against the Euro have a translation
impact on the reported Euro value of the Company revenue. Comparisons at
constant exchange rates aim at eliminating the effect of currencies translation
movements on the analysis of the Company revenues by translating prior year
revenues at the same average exchange rate as applied in the current year.
General information
For the period, revenue was up by +6% year-on-year at constant exchange rates to
?626 million. Asia posted the fastest expansion at +18% driven by a strong
performance in the Mobile segment and the payment-related activities.
The Americas grew by +12% as the rollout of EMV payment cards started in the
United States, while Europe slightly contracted, by (3%).
Platforms & Services activities posted sales of ?130 million, or 21% of total
Company revenue. This represents an increase of +16% compared to the third
quarter of 2013 and was supported by further rapid expansion in Mobile Financial
Services and in issuance services for financial institutions.
Third quarter Main segments Main activities
2014
------------------ -------------------------- Patents &
Ongoing Embedded Others
operations Total Mobile Payment & software & Platforms &
(? in Identity Products Services
millions)
---------------------- --------------------------------------------- ----------
Revenue 626 331 289 490 130 6
As a
percentage of 100% 53% 46% 78% 21% 1%
total revenue
-------------------------------------------------------------------------------
The significant negative effects of currency movements observed during the first
semester eased towards the end of the third quarter and the Company's revenue
expansion was hence only 100 basis points lower at historical exchange rates
than at constant exchange rates.
For the first three quarters of 2014, total Company revenue increased to ?1,759
million, up by +5% at constant exchange rates, with Payment & Identity up +10%
and Mobile up +1%. The Patents & Others segment revenue was unchanged at ?16
million.
First three quarters of 2014 2014 Year-on-year variation at 2013
(? in millions, ongoing revenue constant exchange rates revenue
operations)
-------------------------------------------------------------------------------
Mobile 917 +1% 937
Payment & Identity 826 +10% 772
Patents & Others 16 (3%) 16
-------------------------------------------------------------------------------
Total 1,759 +5% 1,725
-------------------------------------------------------------------------------
Revenue variations by segment and by region, at constant and historical exchange
rates, are presented in Appendix 1 and Appendix 2.
Segment information
Mobile
? in millions Third quarter 2014 Third quarter 2013
-------------------------------------------------------------------------------
Revenue 330.8 335.4
Year-on-year variation at constant =
exchange rates
-------------------------------------------------------------------------------
The Mobile segment posted revenue of ?331 million, stable year-on-year at
constant exchange rates, and growing by +1% over the first three quarters of the
year.
Embedded software & Products came in at ?264 million, lower by five percent
compared to the particularly strong third quarter of 2013. Revenue from embedded
secure elements expanded +57%, and revenue from Machine-to-Machine connectivity
modules increased by +7%. In the high-end 4G and multitenant SIM range, revenue
grew by +19%, as projects that were previously delayed entered the deployment
phase in Europe and additional deployments began to contribute in Asia, leading
multitenant NFC-enabled SIM cards deliveries to increase to 7% of the quarter's
shipments. Nevertheless, the slow-down in the European network operators'
portfolio upgrades that occurred in the first part of the year reduced the pace
of mix improvement and hence the total SIM revenue. For the same reasons the
year-to-date Embedded software & Products revenue is lower by one percent when
compared with the first nine months of 2013.
Platforms & Services grew by +26% to ?66 million. Both Mobile Financial Services
(MFS, which include trusted service management and mobile payment platforms) and
Mobile Subscriber Services (MSS, which include network-related data,
subscription and customer relationship management activities) grew their revenue
by +45% and +17% respectively. Netsize activity, though lower by three percent
year-on-year, showed a substantial improvement compared to the first half of
2014. Year-to-date Platforms & Services revenue growth is +12%.
Payment & Identity
? in millions Third quarter 2014 Third quarter 2013
-------------------------------------------------------------------------------
Revenue 289.2 259.9
Year-on-year variation at constant +12%
exchange rates
-------------------------------------------------------------------------------
The Payment & Identity segment's revenue came in at ?289 million, increasing by
+12% compared to the previous year with +13% in Embedded software and Products
and +8% in Platforms & Services.
In the payment-related activities, North America posted remarkable growth, with
revenue tripling compared to previous year. Deployments of EMV payment cards and
major contracts wins for issuance services in the United-States both contributed
to the performance. In all other regions revenue increased as well, thanks in
particular to the roll-outs of NFC dual-interface payment cards globally.
Improvement in the Identity business compared to the first semester was led by
higher sales of eGovernment documents, partially reduced by lower Government-
related Platforms & Services activity. Compared to last year this part of the
business was negatively affected by the events in the Middle-East and Africa,
like in the first semester. The SafeNet acquisition, announced on August
8, 2014, is expected to close during the fourth quarter as planned, once
remaining necessary regulatory authorizations are obtained; it is not yet
consolidated.
Patents & Others
? in millions Third quarter 2014 Third quarter 2013
-------------------------------------------------------------------------------
Revenue 5.6 0.4
Year-on-year variation at constant n.m.
exchange rates
-------------------------------------------------------------------------------
The year-to-date revenue performance, at ?16 million, is stable at constant
exchange rates compared to the same period in 2013.
Additional information
* Successful ?400 million Gemalto inaugural bond issuance to finance SafeNet
acquisition
On September 18, 2014, Gemalto successfully priced an inaugural unrated public
bond issue for a total amount of ?400 million, maturing in 7 years, which will
partially finance the acquisition of SafeNet, the world leader in data and
software protection, announced on August, 8, 2014.
The operation was completed under favorable conditions with a coupon of 2.125%,
the lowest coupon paid for a non-rated corporate issuer for a maturity of 7
years or more on the euro bond market at the time of the issue. The order book
was 5.5 times over-subscribed, demonstrating investors' confidence in Gemalto's
credit profile.
To do so, Gemalto prepared a prospectus, which received the approval n° C-16097
from the Luxembourg market authority "la Commission de Surveillance du Secteur
Financier" (CSSF), on September 19, 2014. This document, in English, can be
found on CSSF website at:
https://www.bourse.lu/emetteur/documents/signaletique?numEmet=243783, and
on Gemalto web site at http://www.gemalto.com/investors/documents
The Bonds are listed on the regulatory market of Luxembourg as of September
23, 2014 (ISIN code: XS1113441080).
After the acquisition of SafeNet is completed, Gemalto will retain a strong
financial structure, with a net debt to adjusted EBITDA ratio < 1.
* Developments in NFC and other mobile services security
China Mobile and Gemalto deploy NFC transport in Beijing
On September 25, 2014, Gemalto announced it has been selected by China Mobile to
offer its UpTeq NFC multi-tenant SIMs to protect consumer credentials used for
mobile contactless applications, starting with mass transit services in Beijing.
China Mobile is the largest operator in the world with a total subscriber base
of close to 800 million. In addition to the transport application, the UpTeq NFC
multi-tenant SIMs installed in all types of handsets will be immediately ready
to host and enable a rich addition of secure services such as mobile payment,
loyalty and couponing programs, and access control for private enterprises.
China's payment systems are already moving rapidly towards contactless form,
with over 3.6 million terminals accepting China UnionPay's contactless
QuickPass.
Gemalto selected by NTT DOCOMO for its NFC Services
On August 26, 2014, Gemalto announced it was selected by NTT Docomo to protect
its mobile NFC services, by providing an end-to-end solution featuring its
Trusted Service Management (TSM) service, as well as multitenant SIMs running
additional contactless applications for mobile payments, loyalty programs, e-
ticketing and access control. With this new agreement, Gemalto supplies NTT
Docomo, KDDI and Softbank, altogether serving 140 million subscribers, with its
TSM services and secure elements.
Gemalto commercially deploys the Trusted Service Hub service to distribute and
protect mobile sensitive data and services on the broadest range of mobile
devices
On September 8, 2014, Gemalto introduced its Allynis Trusted Services Hub, a
turnkey business service that enables financial institutions, enterprises,
transport operators and more generally all digital service providers to benefit
from a single connection in order to securely deploy their mobile value-added
and payment services across a comprehensive portfolio of smartphones and mobile
networks around the world.
Through Gemalto's Allynis Trusted Services Hub customers get a one-stop and
immediate access to the largest user base using NFC smartphones already equipped
with Secure Elements. Over 1.5 billion mobile users worldwide are covered by
Gemalto-contracted Trusted Services Management (TSM) platforms, with over a
hundred million high-end multi-tenant SIM cards already in place to protect and
manage sensitive application credentials.
The Allynis Trusted Services Hub is ready to handle a large number of future
configurations, including Embedded Secure Elements (eSE) which are becoming
available in some handsets and Trusted Execution Environment (TEE) that will be
running inside next-generation mobile devices, as well as the emerging
tokenization standards. It offers both the broadest reach of users and the most
future-proof technology across mobile platforms.
Outlook
For 2014, Gemalto anticipates double-digit expansion in profit from operations
for the full year as well as an acceleration of year-on-year revenue growth at
constant exchange rates for the second semester. This does not take into account
the SafeNet acquisition that is expected to start contributing at some point in
the fourth quarter of 2014. As a result of the acquired business's anticipated
profitability, growth and synergies, Gemalto expects its 2017 profit from
operations objective of ?600 million to increase by around +10%.
Live Audio Webcast and Conference call
Gemalto third quarter 2014 revenue presentation will be webcast in English today
at 3pm Amsterdam and Paris time
(2pm London time and 9am New York time).
This listen-only live audio webcast of the presentation and the Q&A session will
be accessible from our Investor Relations web site:
www.gemalto.com/investors
Questions will be taken by way of conference call. Investors and financial
analysts wishing to ask questions should join the presentation by dialing:
(UK) +44 203 367 9461 or (US) +1 855 402 7763 or (FR)
+33 1 7077 0936
The accompanying presentation slide set is also available for download on our
Investor Relations web site.
Replays of the presentation and Q&A session will be available in webcast format
on our Investor Relations web site approximately 3 hours after the conclusion of
the presentation. Replays will be available for one year.
The semi-annual report, including the interim condensed consolidated financial
statements as of June 30, 2014, is available on our investor web site
(www.gemalto.com/investors).
Reporting calendar
The full year 2014 results will be reported on Thursday March 5, 2015, before
the opening of Euronext Amsterdam.
Stock Exchange Listing
Gemalto N.V. is dual listed on NYSE Euronext Amsterdam and Paris, in the
compartment A (Large Caps).
Mnemonic: GTO
Exchange Dual listing on NYSE Euronext Amsterdam and Paris
Market of reference NYSE Euronext Amsterdam
ISIN Code NL0000400653
Reuters GTO.AS
Bloomberg GTO:NA
Gemalto has also established a sponsored Level I American Depository Receipt
(ADR) Program in the United States since November 2009. Each Gemalto ordinary
share is represented by two ADRs. Gemalto's ADRs trade in U.S. dollar and give
access to the voting rights and to the dividends attached to the underlying
Gemalto shares. The dividends are paid to investors in U.S. dollar, after being
converted into U.S. dollar by the depository bank at the prevailing rate.
Structure Sponsored Level I ADR
Exchange OTC
Ratio (ORD:DR) 1:2
DR ISIN US36863N2080
DR CUSIP 36863N 208
|Investor Relations |Corporate Communication |Media Relations Agency
| | |
|Gabriel Rangoni |Isabelle Marand |Suzanne Bakker
|M.: +33 6 1426 6956 |M.: +33 6 1489 1817 |M. : +31 6 1136 8659
|gabriel.rangoni(at)gemalto.com|isabelle.marand(at)gemalto.com|suzanne.bakker(at)citigateff.nl
| | |
|John Lineberger |Edi Cohen
|M.:+1 512 940 0023 |M. : +31 6 2151 7820
|john.lineberger(at)gemalto.com |edi.cohen(at)citigateff.nl
| |
About Gemalto
Gemalto (Euronext NL0000400653 GTO) is the world leader in digital security with
2013 annual revenues of ?2.4 billion and more than 12,000 employees operating
out of 85 offices and 25 research and software development centers, located in
44 countries.
We are at the heart of the rapidly evolving digital society. Billions of people
worldwide increasingly want the freedom to communicate, travel, shop, bank,
entertain and work - anytime, everywhere - in ways that are enjoyable and safe.
Gemalto delivers on their expanding needs for personal mobile services, payment
security, authenticated cloud access, identity and privacy protection,
eHealthcare and eGovernment efficiency, convenient ticketing and dependable
machine-to-machine (M2M) applications. We develop secure embedded software and
secure products which we design and personalize. Our platforms and services
manage these products, the confidential data they contain and the trusted end-
user services made possible.
Our innovations enable our clients to offer trusted and convenient digital
services to billions of individuals. Gemalto thrives with the growing number of
people using its solutions to interact with the digital and wireless world.
For more information visit
www.gemalto.com, www.justaskgemalto.com, blog.gemalto.com, or follow (at)gemalto on
Twitter.
This communication does not constitute an offer to purchase or exchange or
the solicitation of an offer to sell or exchange any securities of Gemalto.
This communication contains certain statements that are neither reported
financial results nor other historical information and other statements
concerning Gemalto. These statements include financial projections and estimates
and their underlying assumptions, statements regarding plans, objectives and
expectations with respect to future operations, events, products and services
and future performance. Forward-looking statements are generally identified by
the words "expects", "anticipates", "believes", "intends", "estimates" and
similar expressions. These and other information and statements contained in
this communication constitute forward-looking statements for purposes of
applicable securities laws. Although management of the Company believes that the
expectations reflected in the forward-looking statements are reasonable,
investors and security holders are cautioned that forward-looking information
and statements are subject to various risks and uncertainties, many of which are
difficult to predict and generally beyond the control of the Company, that could
cause actual results and developments to differ materially from those expressed
in, or implied or projected by the forward-looking information and statements,
and the Company cannot guarantee future results, levels of activity, performance
or achievements. Factors that could cause actual results to differ materially
from those estimated by the forward-looking statements contained in this
communication include, but are not limited to: trends in wireless communication
and mobile commerce markets; the Company's ability to develop new technology and
the effects of competing technologies developed; effects of the intense
competition in the Company's main markets; challenges to or loss of intellectual
property rights; ability to establish and maintain strategic relationships in
its major businesses; ability to develop and take advantage of new software,
platforms and services; profitability of the expansion strategy; effects of
acquisitions and investments; ability of the Company's to integrate acquired
businesses, activities and companies according to expectations; ability of the
Company to achieve the expected synergies from acquisitions; and changes in
global, political, economic, business, competitive, market and regulatory
forces. Moreover, neither the Company nor any other person assumes
responsibility for the accuracy and completeness of such forward-looking
statements. The forward-looking statements contained in this communication speak
only as of the date of this communication and the Company or its representatives
are under no duty, and do not undertake, to update any of the forward-looking
statements after this date to conform such statements to actual results, to
reflect the occurrence of anticipated results or otherwise except as required by
applicable law or regulations.
Appendices
Appendix 1
Revenue from ongoing operations, by region
Ongoing Third quarter Third quarter Year-on-year Year-on-year
operations 2014 2013 variation at variation at
constant historical
(? in millions) exchange rates exchange rates
-------------------------------------------------------------------------------
EMEA 273 282 (3%) (3%)
North & South 226 204 +12% +11%
America
Asia 126 109 +18% +16%
-------------------------------------------------------------------------------
Total revenue 626 596 +6% +5%
-------------------------------------------------------------------------------
Appendix 2
Revenue variations at constant and historical exchange rates
Third quarter By segment By activity
2014
---------------------------- ---------------------------
Ongoing Embedded
operations Total Mobile Payment & Patents & software & Platforms &
(? in Identity Others Products Services
millions)
-------------------------------------------------------------------------------
Revenue 626 331 289 6 490 130
Year-on-year
variation at +6% = +12% n.m. +3% +16%
constant
exchange rates
Year-on-year
variation at +5% (1%) +11% n.m. +1% +16%
historical
exchange rates
-------------------------------------------------------------------------------
Appendix 3
Revenue from ongoing operations and all operations
Ongoing operations
-------------------------------
Revenue Payment & Patents & Total Ongoing Assets Total
(? in Mobile Identity Others operations held for Gemalto
millions) sale
-------------------------------------------------------------------------------
Third quarter 331 289 6 626 0 626
2014
Third quarter 335 260 0 596 0 596
2013
-------------------------------------------------------------------------------
Appendix 4
Third quarter 2014 revenue in 2013 reporting format
Third Patents
quarter Mobile Payment & Identity & Others
2014
-------------------------- ------------------------ ----------Total
Ongoing Machine-
operations Mobile to- Secure Security Patents
(? in Communication Machine Transactions
millions)
-------------------------------------------------------------------------------
Revenue 276 54 192 97 6 626
Year-on-
year
variations (2%) +11% +20% (1%) n.m. +6%
at constant
exchange
rates
-------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[1] See basis of preparation on page 2, and appendix 3 of this document for more
information on ongoing operations.
Press release (PDF):
http://hugin.info/159293/R/1865000/654698.pdf
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(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Gemalto via GlobeNewswire
[HUG#1865000]
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