Gemalto first semester 2015 results
(Thomson Reuters ONE) -
* Revenue of ?1.5 billion is up +32% at historical exchange rates and +20% at
constant exchange rates
* Revenue growth in Payment +22%, Machine-to-Machine +23%, and Government
Programs +17%, at constant exchange rates, largely exceeds lower SIM
products and related services revenue
* Profit from operations of ?160 million is up +33%
To better assess past and future performance, the income statement is
presented on an adjusted basis and variations in revenue figures above and in
this document are at constant exchange rates except where otherwise noted (see
page 2 "Basis of preparation of financial information"). Non-GAAP financial
measures are not meant to be considered in isolation or as a substitute for
comparable IFRS measures and should be read only in conjunction with the
consolidated financial statements. Reconciliation with the IFRS income
statement is presented in Appendix 1. The statement of financial position is
prepared in accordance with IFRS, and the cash position variation schedule is
derived from the IFRS cash flow statement. All figures in this press release
are unaudited.
Amsterdam, August 27, 2015- Gemalto (Euronext NL0000400653 - GTO), the world
leader in digital security today announces its results for the first semester
2015.
Key figures of the adjusted income statement
Year-on-year variations
First semester First semester at historical at constant
(? in millions) 2015 2014 exchange rates exchange rates
-------------------------------------------------------------------------------
Revenue 1,499 1,133 +32% +20%
Gross profit 574 418 +37%
Operating (414) (298) +39%
expenses
-------------------------------------------------------------------------------
Profit from 160 120 +33%
operations
Profit margin 10.6% 10.6% =
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Olivier Piou, Chief Executive Officer, commented: "The strong first semester
revenue growth illustrated the structural transformation and successful
diversification of the Company. Our flexibility enabled us to allocate more
internal resources and external investments to support the faster growing
businesses. Payment, Government and Machine-to-Machine are now three significant
and very active growth engines, and Enterprise is reinforced by SafeNet which is
currently being integrated into our portfolio. We are progressively unlocking
operating leverage in those rapidly growing businesses, en route to the upgraded
objectives of our 2017 multi-year development plan."
Basis of preparation of financial information
Segment information
The Mobile segment reports on businesses associated with mobile cellular
technologies including Machine-to-Machine, mobile secure elements (SIM, embedded
secure element) and mobile Platform & Services. The Payment & Identity segment
reports on businesses associated with secure personal interactions including
Payment, Government Programs and Enterprise. The SafeNet acquisition is part of
the Enterprise business.
In addition to this segment information the Company also reports revenues of
Mobile and Payment & Identity by type of activity: Embedded software & Products
(E&P) and Platforms & Services (P&S).
Historical exchange rates and constant currency figures
The Company sells its products and services in a very large number of countries
and is commonly remunerated in other currencies than the Euro. Fluctuations in
these other currencies exchange rates against the Euro have in particular a
translation impact on the reported Euro value of the Company revenues.
Comparisons at constant exchange rates aim at eliminating the effect of
currencies translation movements on the analysis of the Group revenue by
translating prior-year revenues at the same average exchange rate as applied in
the current year. Revenue variations are at constant exchange rates and include
the impact of currencies variation hedging program, except where otherwise
noted. All other figures in this press release are at historical exchange rates,
except where otherwise noted.
Pro forma figures
Following the acquisition of SafeNet and for a better understanding of the year-
on-year evolution of the business, the Company presents the 2014 Gemalto segment
and activity pro forma figures as if SafeNet had been consolidated for the full
year 2014 period and year-on-year variations between these 2014 pro forma
figures and 2015 figures as if SafeNet had been consolidated starting from
January 1, 2015. The difference between 2015 actual figures and 2015 pro forma
figures corresponds to the SafeNet contribution from January 1(st), 2015 to
January 7(th), 2015, the actual transaction closing date. SafeNet's pro forma
figures used in this document were translated into Euro using monthly currency
conversion rates. Variations of pro forma revenue figures are at constant
exchange rates and exclude the impact of currencies variation hedging program
for 2014 and 2015.
Adjusted income statement and profit from operation (PFO) non-GAAP measure
The consolidated financial statements are prepared in accordance with the
International Financial Reporting Standards (IFRS).
To better assess its past and future performance, the Company also prepares an
adjusted income statement where the key metric used to evaluate the business and
make operating decisions over the period 2010 to 2017 is the profit from
operations (PFO).
PFO is a non-GAAP measure defined as IFRS operating profit adjusted for (i) the
amortization and depreciation of intangibles resulting from acquisitions, (ii)
restructuring and acquisition-related expenses , (iii) all equity-based
compensation charges and associated costs; and (iv) fair value adjustments upon
business acquisitions. These items are further explained as follows:
* Amortization and depreciation of intangibles resulting from acquisitions are
defined as the amortization and depreciation expenses related to the
intangibles recognized as part of the allocation of the excess purchase
consideration over the share of net assets acquired.
* Restructuring and acquisitions-related expenses are defined as (i)
restructuring expenses which are the costs incurred in connection with a
restructuring as defined in accordance with the provisions of IAS 37 (e.g.
sale or termination of a business, closure of a plant,.), and consequent
costs; (ii) reorganization expenses defined as the costs incurred in
connection with headcount reductions, consolidation of manufacturing and
offices sites, as well as the rationalization and harmonization of the
product and service portfolio, and the integration of IT systems, consequent
to a business combination; and (iii) transaction costs (such as fees paid as
part of the acquisition process).
* Equity-based compensation charges are defined as (i) the discount granted to
employees acquiring Gemalto shares under Gemalto Employee Stock Purchase
plans; (ii) the amortization of the fair value of stock options and
restricted share units granted by the Board of Directors to employees, and
the related costs.
* Fair value adjustments over net assets acquired are defined as the reversal,
in the income statement, of the fair value adjustments recognized as a
result of a business combination, as prescribed by IFRS3R. Those adjustments
are mainly associated with (i) the amortization expense related to the step-
up of the acquired work-in-progress and finished goods assumed at their
realizable value and (ii) the amortization of the cancelled commercial
margin related to deferred revenue balance acquired
These non-GAAP financial measures are not meant to be considered in isolation or
as a substitute for comparable IFRS measures and should be read only in
conjunction with our consolidated financial statements prepared in accordance
with IFRS.
In the adjusted income statement, Operating Expenses are defined as the sum of
Research and Engineering expenses, Sales and Marketing expenses, General and
Administrative expenses, and Other income (expense) net.
EBITDA is defined as PFO plus depreciation and amortization expenses, excluding
the above amortization and depreciation of intangibles resulting from
acquisitions.
Adjusted financial information
The interim condensed consolidated financial statements are prepared in
accordance with International Financial Reporting Standards (IFRS) as adopted by
the European Union. To better assess its past and future performance, the
Company also prepares an adjusted income statement.
First semester 2015 First semester 2014
-------------------------------------------------------------------------------
Extract of Year-on-year
the variation
adjusted ? in As a % of ? in As a % of
income millions revenue millions revenue historical constant
statement exchange exchange
rates rates
-------------------------------------------------------------------------------
Revenue 1,499.1 1,133.1 +32% +20%
Gross profit 574.0 38.3% 418.3 36.9% +1.4 ppt
Operating (414.4) (27.6%) (298.1) (26.3%) (1.3 ppt)
expenses
EBITDA 219.6 14.6% 165.7 14.6% =
-------------------------------------------------------------------------------
Profit from 159.6 10.6% 120.3 10.6% =
operations
-------------------------------------------------------------------------------
Net profit 105.7 7.1% 95.8 8.5% (1.4 ppt)
Basic
Earnings per 1.21 1.11 +9%
share (?)
Diluted
Earnings per 1.19 1.08 +10%
share (?)
-------------------------------------------------------------------------------
Total revenue for the first semester 2015 came in at ?1,499 million. Existing
business rapid growth and the addition of SafeNet drove the revenue expansion of
+32% at historical exchange rates and +20% at constant exchange rates.
First semester Currency Growth
2015 Addition of Pro forma[1] Hedge variations at historical
(in percentage SafeNet growth effect effect exchange
points) rates
-------------------------------------------------------------------------------
Contributions to
total +11% +11% (2%) +11% +32%
year-on-year
revenue variation
-------------------------------------------------------------------------------
The total Company's year-on-year revenue growth was +11% pro forma. SafeNet's
combination added 11 percentage points to the 2014 reported sales. The rapid and
substantial strengthening of the US dollar versus Euro compared to the first
semester of 2014 and the now large part of the Company's US dollar denominated
revenue explain the 11 percentage point difference between revenue growth at
historical and at constant exchange rates. This difference was partly offset by
the currency variation protection hedging program that induced a (2) percentage
point reduction on the reported sales.
Embedded software & Products (E&P) revenue grew by +7%. Payment cards
represented the largest part of the E&P growth. Strong deliveries in Government
Programs and high demand for connectivity and security modules for the Internet
of Things also notably contributed to the E&P revenue increase. In contrast, E&P
activity in the Mobile segment reduced due to lower year-on-year SIM cards sales
following the closure of the major US wireless carriers' payment venture during
the period.
In Platforms & Services (P&S), sales were up by +74%, with further revenue
expansion in payment issuance, in eGovernment services and due to SafeNet's new
contribution to the Enterprise business. These increases largely exceeded the
reduced Mobile Financial Services revenue generated in the United States.
Globally, first semester revenue growth illustrated the structural
transformation and successful diversification of the Company. It posted +11% pro
forma growth when SIM and related services declined (7%) year-on-year, during
the period.
Gross profit was up by ?156 million, to ?574 million, representing a gross
margin of 38.3%, up +1.4 percentage point year-on-year. The increase in gross
margin in Payment & Identity came mainly from the Enterprise business and more
than offset the lower contribution in Mobile due to the lower sales of product
and services related to mobile payment in the United States.
Operating expenses were up by 1.3 percentage point of revenue to 27.6%, at ?414
million. The increase came primarily from the addition of SafeNet's operating
expenses, standing at a higher level than Gemalto's historical business and from
the currency translation effects.
As a result, first semester 2015 profit from operations was ?160 million, up ?39
million year-on-year, representing 10.6% profit margin, as in the first semester
of 2014. The operational leverage gains of the semester were offset by the rapid
and significant currency variation and hedging effects. Year-on-year variation
of these hedges represented an adverse impact of ?31 million for the first
semester 2015, which balanced the gains in profit from operations linked to the
favorable natural exposure to currency variations for the period.
Gemalto's financial income was (?14) million compared to (?4) million for the
first semester of 2014 as interest expense and amortized costs on the public
bond, private placements and credit lines facilities amounted to (?6) million.
Foreign exchange transactions and other financial items amounted to (?8)
million.
As a result, adjusted profit before income tax came in at ?147 million compared
to ?117 million the previous year, showing an increase of +26%.
Adjusted income tax expense was (?42) million, with an estimated IFRS annual
income tax rate of 22% for 2015.
Consequently, the adjusted net profit of the Company was ?106 million, a
?10 million and +10% increase when compared to last year's figure of ?96
million.
Adjusted basic earnings per share came in at ?1.21, up +9% compared to the first
semester 2014 adjusted basic earnings per share of ?1.11. Adjusted diluted
earnings per share were at ?1.19, up +10% on the 2014 first semester's adjusted
diluted earnings per share of ?1.08.
IFRS results
Fair value adjustments relating mainly to the non-cash amortization of the IFRS
revaluation of SafeNet's pre-acquisition inventories at their net realizable
value accounted for (?67) million for the first semester of 2015, compared to
null in 2014. Amortization and depreciation of intangibles resulting from
acquisitions, another non-cash element, increased by ?12 million year-on-year,
to (?23) million, also mainly due to SafeNet acquisition. Restructuring and
acquisition-related expenses, including SafeNet transaction fees, decreased by
?2 million to (?19) million, compared to (?21) million in the first semester of
2014. The equity-based compensation charge dropped year-on-year to (?17) million
versus (?27) million as the first semester of 2014 saw the introduction of the
new 2014-2017 multi-year development plan's related equity incentive plan, while
in 2015 the long-term incentive plan is scheduled for the second semester of the
year.
Gemalto recorded an IFRS operating profit (EBIT) of ?33 million for the first
semester of 2015, compared to ?61 million in the first semester of 2014, lower
year-on-year due to the non-cash IFRS fair-value adjustments linked to SafeNet
acquisition. The IFRS net profit came in at ?14 million for the first semester
2015, versus ?46 million in the first semester of 2014.
As a result of these, IFRS basic earnings per share and diluted earnings per
share hence were ?0.16 and ?0.15 respectively for the reported period compared
to ?0.53 and ?0.52 in the first semester of 2014.
Statement of financial position and cash position variation schedule
In the first semester of 2015, operating activities generated a cash flow of
?199 million before changes in working capital, compared to ?128 million in
2014 mainly due to the profit from operations expansion and the higher
contribution of non-cash expenses in the operating expenses. Changes in working
capital reduced cash flow by (?57) million, less than during the same period of
2014 at (?75) million. Although year-on-year revenue growth in the second
quarter of 2015 was significantly higher than in the same period 2014, there was
a reduced impact of the longer cash collection cycle in Asia. Inventories
increase was higher than Company's reported revenue expansion due to the
anticipated growth and the lower activity in certain businesses in the second
quarter. Accounts receivables and payables increased in line with Company's
reported revenue expansion.
Capital expenditure and acquisition of intangibles amounted to ?104 million, or
6.9% of revenue. Property, Plant, and Equipment assets accounted for ?51 million
of investment, up ?22 million year-on-year to support in particular the strong
growth of the payment business in the United States. Acquisition and
capitalization of intangible assets represented a net cash outflow of ?52
million compared to ?21 million for the first semester 2014. Most of the
increase came from the acquisition of a new patent portfolio and the rights to
use and distribute a licensed technology and a slight increase on the
capitalization of development expenses to 1.7% of revenue compared to 1.5% in
2014.
The hedging program which aims at partially neutralizing the impact of sudden
currency variations on the Company's profit from operations generated an advance
cash outflow of ?84 million related to currency exposure over the Company's
2014-2017 development plan, due to the strong and rapid US dollar appreciation
against the Euro during the first part of the year.
Acquisitions used ?888 million in cash, for the most part related to the
acquisitions of SafeNet and Trüb, closed respectively during the first and
second quarter of 2015.
Gemalto's share buy-back programs had no impact on cash for the first semester
of 2015. The independently managed liquidity program generated ?3 million in
cash. As at June 30, 2015, the Company held 977,881 shares, or 1.1% of its own
shares in treasury. The total number of Gemalto shares issued increased by
+991,865 this semester, to 89,007,709 shares. Net of the 977,881 shares held in
treasury, 88,029,828 shares were outstanding as at June 30, 2015.
On May 24, 2015, Gemalto paid a cash dividend of ?0.42 per share in respect of
the fiscal year 2014, up +11% on the dividend paid in May 2014 which was of
?0.38 per share. This May 2015 distribution used ?37 million in cash. Other
financing activities generated ?177 million in cash including mainly ?149
million of private placement loan issuance, ?30 million of credit lines drawdown
and ?4 million of proceeds received by the Company from the exercise of stock
options by employees.
Cash in hand, net of bank overdrafts amounted to ?257 million as at June
30, 2015
Considering the ?746 million total amount of borrowings, Gemalto's net debt
position was ?490 million as at June 30, 2015, compared to a ?363 million net
cash position as of June 30, 2014, a (?853) million variation mostly due to the
(?888) million used this semester for acquisitions.
Segment information
Revenue variations are expressed at constant currency exchange rates unless
otherwise noted.
Contribution by segment Payment & Total two main
First semester 2015 Identity Mobile segments Patents & Others
(? in millions)
----------------------------------------------------------------------------
Revenue 840 641 1481 18
As a percentage of revenue 56% 43% 99% 1%
As a percentage of PFO 49% 44% 93% 7%
----------------------------------------------------------------------------
Contribution by
activity
First semester 2015 Embedded software Platforms & Total two main Patents &
& Products Services segments Others
(? in millions,
variations at constant
exchange rates)
-------------------------------------------------------------------------------
Revenue 1070 411 1481 18
Year-on-year revenue +7% +74% +19% +72%
growth
As a percentage of 71% 27% 99% 1%
revenue
As a percentage of 27% 70% 97% 3%
revenue growth
-------------------------------------------------------------------------------
Year-on-year variations Payment & Total two main Patents &
and currencies impact Identity Mobile segments Others Total
(? in millions)
-----------------------------------------------------------------------------
Second quarter
Revenue 473 323 796 17 813
At constant rates +50% (9%) +18% +790% +21%
At historical rates +67% +3% +33% +790% +35%
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First semester
Revenue 840 641 1,481 18 1,499
At constant rates +43% (2%) +19% +72% +20%
At historical rates +57% +9% +32% +72% +32%
-----------------------------------------------------------------------------
First semester
Profit from operations 77 71 148 11 160
At historical rates +46% +11% +27% +245% +33%
As a percentage of total PFO 49% 44% 93% 7% 100%
-----------------------------------------------------------------------------
With further strong expansion recorded throughout the first semester, Payment &
Identity has become the largest contributor to both Company revenue and profit
from operations. It represented 56% of Gemalto's revenue and 49% of profit from
operations compared to 47% and 44% respectively in the same period of the
previous year.
Activities within Embedded software & Products and Platforms & Services both
contributed to the rapid growth of Gemalto in the first semester of 2015, up by
+7% and +74% respectively (and up +6% and +12% respectively on a pro forma
basis). Growth in Embedded software & Products, came mostly from Payment,
Machine-to-Machine and Government Programs. Platforms & Services contributed
70% of the total revenue growth during the period, and its double-digit increase
in revenue was driven by the achievements in Payment issuance services and
Government Programs, plus the contribution of SafeNet to the Enterprise
business.
Changes in currency translation effects were important for the whole period,
especially in the second quarter with the strong year-on-year US dollar
appreciation against the Euro. With significant developments in the United
States, Payment & Identity segment was the most exposed to those US dollar
related effects with a 14 percentage point difference between expansion at
historical and constant exchange rates.
Payment & Identity
First semester 2015 First semester 2014 Year-on-year variation
-------------------------------------------------------------------------------
at at
? in As a % of ? in As a % of historical constant
millions revenue millions revenue exchange exchange
rates rates
-------------------------------------------------------------------------------
Revenue 840.2 536.7 +57% +43%
Gross profit 310.5 37.0% 171.9 32.0% +4.9 ppt
Operating (233.1) (27.7%) (118.9) (22.1%) (5.6 ppt)
expenses
Profit from 77.5 9.2% 53.1 9.9% (0.7 ppt)
operations
-------------------------------------------------------------------------------
Payment & Identity's first semester revenue came in at ?840 million, increasing
by +43% compared to the same period in 2014. Embedded software & Products sales
were up by +16% at ?553 million. Platforms & Services sales more than doubled,
at ?287 million.
The Payment business grew by +28% in the second quarter of 2015 compared to the
second quarter of last year. This strong performance led the +22% year-on-year
revenue expansion for the first semester, at ?469 million. The Americas posted
the largest growth, with revenue almost doubling compared to previous year on
strong sales of EMV payment cards and rapid expansion of issuance services in
the United States. Payment's Embedded software & Products sales grew by +19% and
Payment's Platforms & Services revenue expanded by +38% compared to the first
semester of 2014.
Revenue from the Enterprise business came in at ?195 million for the first
semester of 2015. In addition to the SafeNet consolidation impact, improvement
came from the increasing market demand for cybersecurity solutions. The
integration of SafeNet is progressing well, with alignment of authentication
portfolios between the Identity Access Management business and SafeNet. The
Enterprise business revenue mix between authentication and data encryption is
moving towards a lower proportion of hardware, and to gross profit increasing
faster than revenue. On a pro forma basis, this evolution had led to a gross
margin increase of +3 percentage points compared to first semester 2014.
Revenue from the Government Programs business came in at ?175 million, up +17%
compared to the first semester of 2014, of which ?14 million came from Trüb AG,
a Swiss provider of identification solutions for governments and banks acquired
during the period. Beside Trüb's contribution during the second quarter, sales
expansion came from delivery commencements of previously won projects while at
the same time project backlog continued to expand. Government Programs Embedded
software & Products revenue was up +14% and its Platforms & Services sales were
up +28% compared to the first semester of 2014.
Across the entire segment, gross margin improved to 37%, up +4.9 percentage
points compared to the first semester of 2014, as the segment's Platforms and
Services activity continued to grow, in particular in the Enterprise business.
Operating expenses grew to (?233) million in the first semester of 2015, largely
due to the acquisition additions, as well as the shift of more internal
resources to the segment to address the rapid growth of its different business
divisions.
As a result profit from operations in Payment & Identity for the first semester
2015 came in at ?77 million, up +46% from the ?53 million recorded in the first
semester 2014.
Mobile
First semester 2015 First semester 2014 Year-on-year variation
-------------------------------------------------------------------------------
at at
? in As a % of ? in As a % of historical constant
millions revenue millions revenue exchange exchange
rates rates
-------------------------------------------------------------------------------
Revenue 641.3 586.1 +9% (2%)
Gross profit 246.2 38.4% 237.3 40.5% (2.1 ppt)
Operating (175.2) (27.3%) (173.3) (29.6%) +2.3 ppt
expenses
Profit from 71.0 11.1% 64.0 10.9% +0.2 ppt
operations
-------------------------------------------------------------------------------
The Mobile segment posted revenue of ?641 million. Revenue grew by +9% at
historical exchange rates and was lower by (2%) at constant exchange rates
compared to the same period of previous year. At constant exchange rates, the
most significant revenue expansion came from the Machine-to-Machine business,
with a +23% increase in sales. The segment posted a contrasted pattern of
revenue growth over the two first quarters, with a strong increase in the first
quarter of +7% and a year-on-year reduction of (9%) in the second quarter. This
evolution essentially related to the lower contribution to revenue of high-end
SIMs and Mobile Platforms & Services sales in the United States due to the
Softcard mobile payment service closing. The year-on-year unfavorable comparison
basis will remain noticeable for the next three quarters.
Machine-to-Machine's Embedded software & Products revenue evidenced very solid
expansion, +22%, due to the increasing global demand of connected devices and
embedded secure elements (eSE) for the Internet of Things (IoT), across all
sectors, in particular in the EMEA and Americas regions. Secure elements sales
for the IoT extended their already strong dynamic, posting a +46% increase in
revenue year-on-year at constant exchange rates.
Year-on-year SIM sales reduced by (8%) due to the US operators mobile payment
service closing, which in some cases led to lower sales of high-end SIMs while
other services benefiting from these high-end SIMs are under development.
Mobile Platforms & Services revenue was also influenced by the end of this US
operators led mobile payment project, leading to a (1%) year-on-year revenue
variation at constant exchange rates. On a global perspective, Gemalto Mobile
Financial Services business reached important milestones during the semester,
extending the connection of Gemalto's Trusted Services Hub (TSH) offer to OEM's
embedded secure elements (eSE), Trusted Execution Environment (TEE), and to the
payment applications that are using Host Card Emulation (HCE) framework. The
Trusted Services Hub has also integrated this semester support for the newly
standardized EMV tokenization layers, to become the market reference in terms of
mobile device reach, integration capacity, and neutrality, all highly valuable
benefits to domestic and global payment services. Gemalto's Mobile Subscriber
Services business also reached an important milestone related to embedded SIMs
this semester, with the adoption by the GSMA of a first common high-level
architecture for remote activation and management of connectivity for the
consumer market. Gemalto is deeply involved in this global interoperability
effort, bringing its technical expertise and neutrality to help both OEMs and
MNOs put in place solutions that best address their respective objectives and
constraints.
Gross profit increased by ?9 million, mainly due to currency translation
effects, and gross margin was lower by (2) percentage points mainly due to the
change in products and services mix.
Operating expenses grew slightly to (?175) million, as a result of the opposite
effects of currency translations, which increased the Euro value of US dollar
denominated operating expenses, offset by the shift of some of the segment's
resources to handle the rapid growth of the Payment and Identity. Overall,
operating expenses were lowered year-on-year by (2) percentage points when
expressed as a percentage of segment's total revenue for the first semester of
2015.
As a result, Mobile's profit from operations for the first semester of 2015 was
?71 million, increasing by +11% compared to the ?64 million posted in the same
period of last year.
Profit from operations margin expanded to 11.1%, compared to 10.9% in the first
semester of 2014.
Patents & Others
First semester 2015 First semester 2014 Year-on-year variation
-------------------------------------------------------------------------------
at at
? in As a % of ? in As a % of historical constant
millions revenue millions revenue exchange exchange
rates rates
-------------------------------------------------------------------------------
Revenue 17.7 10.3 +72% +72%
Gross profit 17.3 97.7% 9.1 88.8% +8.9 ppt
Operating (6.1) (34.6%) (5.9) (57.4%) +22.8 ppt
expenses
Profit from 11.1 63.0% 3.2 31.4% +31.6 ppt
operations
-------------------------------------------------------------------------------
The Patents & Others segment generated ?18 million revenue in the first semester
of 2015 in relation to new and also renewed cross-licensing agreements. Compared
to the first semester of 2014, operating expenses were stable. As a result,
profit from operations came in at ?11 million in the first semester.
Additional information
Government Programs
* Gemalto launches unique ultra-thin electronic passport inlay and cover
Unique to Gemalto, Sealys Premium inlays and eCovers will enable national
printers to optimize the efficiency of their manufacturing processes whilst
creating ePassports that are thinner, flatter and more visually appealing.
The new inlays and eCovers passed and exceeded ICAO durability tests.
* Gemalto boosts eGovernment adoption by securely combining eID cards and NFC
phones
Coesys mGov, an innovative new mobile strong digital authentication
solution, enables citizens to access online government services using a
combination of their contactless national eID card and NFC phone.It allows
authorities to put in place Trusted National Mobile ID schemes.
* California selects Gemalto for automated identity document verification
Gemalto successfully provided the nearly 200 California Department of Motor
Vehicle (California DMV) field and investigative offices with its advanced
Coesys Document Verification software solution. This allows the California
DMV to streamline the review process, overcome the challenge of
authenticating foreign documents and identify any document abnormalities or
defects.
Connected Devices and On-Demand Connectivity Management
* IoT solution enabled by Gemalto helps optimize safety and efficiency in
Latin America's busiest seaports
The innovative SISMO® telemetry solution developed by HidroMares, a leading
oceanography consulting firm, monitors dynamic ocean conditions to optimize
safety and efficiency in Brazilian ports.
* NTT Docomo selects Gemalto for IoT applications in Japan
NTT Docomo has selected Gemalto to enable connectivity for Internet of
Things (IoT) applications. Gemalto's Cinterion® Machine Identification
Module (MIM) complies with the most stringent industry standards and was
first to meet the high quality requirements of the Japanese market.
* China Telecom and Gemalto present joint innovation for connecting cars and
IoT
China Telecom and Gemalto are developing a proof-of-concept for connected
cars using Gemalto's LinqUs On-Demand Connectivity (ODC) subscription
management solution. The two companies demonstrated at the Mobile World
Congress Shanghai how remote 'over-the-air' provisioning can enable secure
connectivity on mobile devices. Next the two companies will integrate this
ODC solution on vehicles for China Telecom's auto-maker customers.
* Gemalto increases its stake in Trustonic
During the first semester, Gemalto increased its shareholding in Trustonic,
which develops a secure environment called a Trusted Execution Environment
(TEE) that runs at the heart of smart devices and enables service providers
to openly access ready-made advanced hardware-backed security features. As
at June 30, 2015, the Group, held 50% interest and ownership in the joint
venture.
* Remote provisioning of consumer devices based on GSMA architecture
At Mobile World Congress Shanghai on July 15(th) and 16(th), Gemalto
demonstrated remote provisioning of consumer devices based on the newly
proposed GSMA architecture. Gemalto has been at the forefront of this
initiative; actively defining and embracing this standards-based approach to
provide a solution for operators, device manufacturers and service providers
to securely and instantly enable connectivity for consumers. Gemalto also
demonstrated its LinqUs On-Demand Connectivity subscription management
solution on ZTE smartphones as part of a proof of concept for connecting a
consumer device with an embedded SIM to a mobile network anytime and
anywhere.
Outlook
For 2015, Gemalto anticipates another year of double digit growth in its profit
from operations. In the second semester, the closure of the US mobile payment
service Softcard will limit the Mobile segment year on year progress in
comparison to the same period of 2014. Accelerating pace in Payment, Machine-to-
Machine, Enterprise and Government Programs will support the profit expansion of
the Company towards its upgraded objective of over ?660 million in 2017.
Live Audio Webcast and Conference call
Gemalto first semester 2015 results 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 9459 or (US) +1 866 907 5924 or (FR)
+33 1 7077 0947
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, 2015, is available on our investor web site
(www.gemalto.com/investors).
Reporting calendar
Third quarter 2015 revenue will be reported on Thursday October 29, 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
| | |
|Winston Yeo |Isabelle Marand |Suzanne Bakker
| | |
|M: +33 6 2947 0814 |M: +33 6 1489 1817 |M: +31 6 1136 8659
| | |
|winston.yeo(at)gemalto.com |isabelle.marand(at)gemalto.com|suzanne.bakker(at)citigateff.nl
| | |
| |
|Sébastien Liagre |Edi Cohen
|M: +33 6 1751 4467 |M: +31 6 2151 7820
|sebastien.liagre(at)gemalto.com |edi.cohen(at)citigateff.nl
About Gemalto
Gemalto (Euronext NL0000400653 GTO) is the world leader in digital security,
with 2014 annual revenues of ?2.5 billion and blue-chip customers in over 180
countries.
Gemalto helps people trust one another in an increasingly connected digital
world. Billions of people want better lifestyles, smarter living environments,
and the freedom to communicate, shop, travel, bank, entertain and work -
anytime, everywhere - in ways that are enjoyable and safe. In this fast moving
mobile and digital environment, we enable companies and administrations to offer
a wide range of trusted and convenient services by securing financial
transactions, mobile services, public and private clouds, eHealthcare systems,
access to eGovernment services, the Internet and internet-of-things and
transport ticketing systems.
Gemalto's unique technology portfolio - from advanced cryptographic software
embedded in a variety of familiar objects, to highly robust and scalable back-
office platforms for authentication, encryption and digital credential
management - is delivered by our world-class service teams. Our 14,000 employees
operate out of 99 offices, 34 personalization and data centers, and 24 research
and software development centers located in 46 countries.
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.
Appendix 1
Reconciliation from IFRS to Adjusted financial information
Six-month period ended June 30 2015 |
(? in millions) |Basic EPS Diluted EPS
---------------------------------------------------------+---------------------
Weighted average number of shares outstanding | 87,605 88,689
(in thousands) |
|
|
|
IFRS financial information |
---------------------------------------------------------+---------------------
Operating profit 33,141|
|
Financial income (13,686)|
|
Share of profit of associates 806|
|
Income tax (4,400)|
|
Non-controlling interests 535|
|
Profit (loss) from discontinued (2,662)|
operation (net of income tax) |
---------------------------------------------------------+---------------------
Net profit attributable to owners of 13,734| 0.16 0.15
the Company |
---------------------------------------------------------+---------------------
|
|
Reconciliation to adjusted financial |
information |
---------------------------------------------------------+---------------------
IFRS Net profit attributable to owners of 13,734| 0.16 0.15
the Company |
|
Fair value adjustment upon business 67,271|
acquisition |
|
Amortization and depreciation of |
intangibles resulting from 23,307|
acquisitions |
|
Restructuring and acquisition-related 18,790|
expenses |
|
Equity-based compensation expense and 17,114|
associated costs |
|
Profit (loss) from discontinued 2,662|
operation (net of income tax) |
|
Income tax (expense) (37,190)|
---------------------------------------------------------+---------------------
Adjusted Profit for the period 105,688| 1.21 1.19
---------------------------------------------------------+---------------------
The half year 2015 adjusted basic earnings per share is determined on the basis
of the weighted average number of Gemalto shares outstanding during the six-
month period ended June 30, 2015, i.e. 87,605,010 shares taking into account the
effect of the share buy-back program. The first semester 2015 adjusted diluted
earnings per share is determined by using 88,688,925 shares corresponding to
the IFRS treasury stock method, i.e. on the basis of the same weighted average
number of Gemalto shares outstanding and considering that all outstanding
equity-based instruments were exercised (1,319,110 instruments) and the proceeds
received from the instruments exercised (?17,619,829) were used to buy-back
shares at the average share price of the first semester 2015 (235,195 shares at
?75).
Six-month period ended June 30 2014 |
(? in millions) |Basic EPS Diluted EPS
---------------------------------------------------------+---------------------
Weighted average number of shares outstanding | 86,404 88,777
(in thousands) |
|
|
|
IFRS financial information |
---------------------------------------------------------+---------------------
Operating profit 60,847|
|
Financial income (3,922)|
|
Share of profit of associates 615|
|
Income tax (11,893)|
|
Non-controlling interests 490|
|
Profit (loss) from discontinued -|
operation (net of income tax) |
---------------------------------------------------------+---------------------
Net profit attributable to owners of 46,137| 0.53 0.52
the Company |
---------------------------------------------------------+---------------------
|
|
Reconciliation to adjusted financial |
information |
---------------------------------------------------------+---------------------
IFRS Net profit attributable to owners of 46,137| 0.53 0.52
the Company |
|
Fair value adjustment upon business -|
acquisition |
|
Amortization and depreciation of |
intangibles resulting from 11,357|
acquisitions |
|
Restructuring and acquisition-related 21,469|
expenses |
|
Equity-based compensation expense and 26,584|
associated costs |
|
Adjustment over NCI (64)|
|
Income tax (expense) (9,665)|
---------------------------------------------------------+---------------------
Adjusted Profit for the period 95,818| 1.11 1.08
---------------------------------------------------------+---------------------
Appendix 2
Interim consolidated statement of financial position
(? in thousands) June 30, December 31,
-----------------------
2015 2014
----------------------------------------------------------------
ASSETS
Non-current assets
Property, plant and equipment, net 332,615 279,741
Goodwill, net 1,599,653 900,826
Intangible assets, net 454,302 218,137
Investments in associates 62,463 51,686
Deferred income tax assets 197,313 144,710
Available-for-sale financial assets, net - -
Other non-current assets 58,292 45,024
Derivative financial instruments 14,497 2,566
-----------------------
Total non-current assets 2,719,135 1,642,690
Current assets
Inventories, net 313,534 223,579
Trade and other receivables, net 994,697 852,683
Derivative financial instruments 21,907 3,831
Cash and cash equivalents 288,933 1,059,572
-----------------------
Total current assets 1,619,071 2,139,665
-----------------------
Total assets 4,338,206 3,782,355
-------------------------------------------------------------------------------
Equity
Share capital 89,008 88,016
Share premium 1,240,235 1,206,877
Treasury shares (39,256) (55,482)
Fair value and other reserves (44,500) 84,603
Cumulative translation adjustments 61,995 (3,957)
Retained earnings 1,048,994 1,070,653
-----------------------
Capital and reserves attributable to the 2,356,476 2,390,710
owners of the Company
-----------------------
Non-controlling interests 6,584 5,454
-----------------------
Total equity 2,363,060 2,396,164
Liabilities
Non-current liabilities
Borrowings 547,529 398,027
Deferred income tax liabilities 96,337 46,165
Employee benefit obligations 105,323 107,361
Provisions and other liabilities 123,607 46,871
Derivative financial instruments 11,858 2,714
-----------------------
Total non-current liabilities 884,654 601,138
-----------------------
Current liabilities
Borrowings 231,157 168,155
Trade and other payables 666,688 539,911
Current income tax liabilities 31,731 30,838
Provisions and other liabilities 12,532 12,968
Derivative financial instruments 148,384 33,181
-----------------------
Total current liabilities 1,090,492 785,053
--------------------
Unternehmensinformation / Kurzprofil:
Datum: 27.08.2015 - 00:11 Uhr
Sprache: Deutsch
News-ID 416184
Anzahl Zeichen: 65592
contact information:
Town:
Meudon
Kategorie:
Business News
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"Gemalto first semester 2015 results"
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