Gemalto third quarter 2015 revenue
(Thomson Reuters ONE) -
* Revenue at ?769 million, up +23% at historical exchange rates and +13% at
constant exchange rates
* Platforms & Services revenue up +74% at constant exchange rates and +13% pro
forma
* Trend continues to be positive in Government Programs, Payment, Machine-to-
Machine and lower for sales to mobile network operators
Revenue variations are at constant exchange rates except where otherwise
noted.
Pro forma figures include 2014 SafeNet figures. See basis of preparation on
page 2.
All figures presented in this press release are unaudited.
Amsterdam, October 29, 2015 - Gemalto (Euronext NL0000400653 - GTO), the world
leader in digital security today announces its revenue for the third quarter of
2015.
Main segments Main activities
------------------ --------------------------
Third quarter Embedded Platforms & Patents &
2015 Total Payment & Mobile software & Services Others
(? in Identity Products (P&S)
millions) (E&P)
---------------------- --------------------------------------------- ----------
Revenue 769 469 299 534 235 1
-------------------------------------------------------------------------------
Year-on-year
variation at +13% +51% (17%) (1%) +74% (89%)
constant
exchange rates
Year-on-year
variation at +23%
historical
exchange rates
Olivier Piou, Chief Executive Officer, commented: "The third quarter revenue of
2015 continues to show the successful diversification of Gemalto. Payment &
Identity now represents over 60% of our sales, and Platforms & Services year-to-
date revenue has already surpassed the full year P&S 2014 revenue. Within the
lower Mobile segment, the transformation is evidenced by the Machine-to-Machine
strong revenue growth and we shift our resources on the fastest growing
businesses to deliver another year of double digit profit from operations growth
in 2015, towards our upgraded 2017 objectives."
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 Platforms & 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.
General information
Main segments Main activities
-------------------- ------------------------- Patents
Third quarter Payment Embedded Platforms &
2015 Total & Identity Mobile software & Services Others
(? in millions) & Products
----------------------- ---------------------------------------------- --------
Revenue 769 469 299 534 235 1
As a percentage
of total 100% 61% 39% 69% 31% 0%
revenue
-------------------------------------------------------------------------------
For the third quarter of 2015, total revenue came in at ?769 million, up +13% at
constant exchange rates. Payment & Identity representing 61% of total Company
revenue, posted sales at ?469 million, up +20% pro forma.
Embedded software & Products revenue of ?534 million was (1%) compared to the
same period last year due to lower sales to mobile network operators and a lower
proportion of hardware authentication devices in the Enterprise business.
Embedded software & Products activity for Government Programs, Payment and
Machine-to-Machine continue to show strong positive trends in the quarter.
Platforms & Services activities posted sales of ?235 million, an increase of
+74% year-on-year, supported by the rapid expansion in payment issuance
services, eGovernment services and the addition of SafeNet. Patents & Others
revenue was ?1 million this quarter versus ?6 million last year.
+------------------+-----------+----------+------+--------------+--------------+
|Third quarter 2015|Addition of|Pro forma |Hedge | Currency | Growth |
|(in percentage | SafeNet | growth |effect| variations |at historical |
|points) | | | | effect |exchange rates|
+------------------+-----------+----------+------+--------------+--------------+
|Contributions to | | | | | |
|total | +12% | +4% | (2%) | +9% | +23% |
|year-on-year | | | | | |
|revenue variation | | | | | |
+------------------+-----------+----------+------+--------------+--------------+
On a pro forma basis Company's total revenue expanded by +4%. SafeNet
consolidation added +12 percentage points to the 2014 reported sales. The strong
U.S. dollar versus Euro in the third quarter of 2015 compared to the third
quarter of 2014 together with the now larger part of the Company's U.S. dollar
dominated revenue generated a +9 percentage points difference between revenue
growth at historical and at constant exchange rates. This currency variation has
been partially offset by the hedging program, which aims at partially
neutralizing the impact of sudden currency variations on the Company's profit
from operations, that induced a (2) percentage point reduction on the reported
sales.
At the current rates, the hedging program should generate a cash outflow of ?40
million in the second semester of 2015, for a full year total of ?124 million
which will be recovered mechanically within the next three years.
Revenue variations by region, at constant and historical exchange rates, are
presented in Appendix 1.
Segment information
Payment & Identity
? in millions Third quarter 2015 Third quarter 2014
-------------------------------------------------------------------------------
Revenue 469 289
Year-on-year variation at constant +51%
exchange rates
-------------------------------------------------------------------------------
The Payment & Identity segment's revenue came in at ?469 million, increasing by
+51% compared to the previous year.
Embedded software and Products revenue grew by +19% at ?291 million. The
segment's Platforms & Services revenue, which includes SafeNet's platforms,
software and services sales, more than doubled, at ?178 million. The segment's
Platforms & Services year-on-year revenue growth on a pro forma basis was +29%.
The Payment business grew by +23% year-on-year. The Americas continue to post
the largest growth, with revenue almost doubling compared to previous year on
strong sales of EMV payment cards and issuance services in the United-States.
The Enterprise business revenue came in at ?113 million, with expansion from the
addition of SafeNet and from the sustained market demand for cybersecurity,
software protection and software monetization solutions. The trend in revenue
mix in authentication and data encryption continues to move towards a higher
proportion of software services.
The Government Programs business was up +32% compared to the third quarter of
2014. The revenue increase came mainly from delivery commencements of previously
won projects, and ?9 million from the addition of Trüb. Sales in the Middle East
and Africa region, impacted by external events in the previous year, are back to
growth. Revenue from the United States doubled compared to the same period in
2014.
Mobile
? in millions Third quarter 2015 Third quarter 2014
-------------------------------------------------------------------------------
Revenue 299 331
Year-on-year variation at constant (17%)
exchange rates
-------------------------------------------------------------------------------
The Mobile segment posted revenue of ?299 million, (17%) lower at constant rates
compared to previous year.
Embedded software & Products revenue for the segment came in at ?243 million,
(17%) lower compared to the third quarter of 2014. The SIM business, now
representing 22% of the Company total revenue, reduced by (27%) this quarter,
mainly due to the U.S. operators mobile payment service closing as earlier
announced, coupled with lower demand in Latin America and Asia. Now that the
mobile penetration rate in these regions is higher, the correlation between the
economic environment and the SIM demand appears to be stronger. The Machine-to-
Machine business continued to grow rapidly, by +20% year-on-year, due to the
expanding global demand of connected devices and embedded secure elements (eSE)
for the Internet of Things (IoT).
Platforms & Services revenue for the segment came in at ?57 million, as Mobile
Financial Services revenue decreased year-on-year due to lower mobile payment in
the U.S., as announced earlier. This quarter, Gemalto announced a partnership
with Samsung to accelerate the deployment of Samsung Pay in Europe. Samsung Pay
will benefit from Gemalto's Trusted Service Hub, offering payment issuers a one
stop connection, lifecycle management of payment credentials and tokenization
services.
During the quarter, the GSMA (the world mobile operators association) adopted a
common architecture for embedded SIM and remote provisioning management to
address consumer devices. Gemalto demonstrated the GSMA defined architecture
during the Mobile World Congress in Shanghai in partnerships with device
manufacturers. The industry is now working on a detailed specification.
Patents & Others
Third Third
? in millions quarter quarter
2015 2014
------------------------------------------------------------------------
Revenue 1 6
Year-on-year variation at constant exchange rates (89%)
------------------------------------------------------------------------
Patents & Others revenue was ?1 million this quarter versus ?6 million during
the same period in 2014.
Additional information
* Debit Network Alliance selects Gemalto to guide EMV deployment strategy for
U.S. debit card issuers
Gemalto has been selected by the Debit Network Alliance (DNA), a consortium
of leading U.S. debit network providers, to deliver EMV consulting services.
Gemalto's EMV Allynis Consulting Services are designed to accelerate the
deployment of EMV, significantly reducing time between DNA's business plan
and go-to-market. Gemalto's consultants recommended and executed a strategy
that details card, terminal and personalization requirements.
* California selects Gemalto for automated identity document verification
Gemalto has successfully provided the nearly 200 California Department of
Motor Vehicle (California DMV) field and investigative offices with its
advanced Coesys Document Verification software solution. DMV officials can
verify the authenticity of such documents as passports, identity cards and
driver licenses by simply checking the graphical data and security features
against reference templates from an array of issuing countries. This
solution reduces the burden of manual updates on each authentication
workstation located within the DMV field offices.
* Gemalto boosts connectivity for the Internet of Things with the industry-
first M2M Cat 1 LTE module
Gemalto launched the industry's first LTE Category 1 (Cat 1) wireless module
to revolutionize highly efficient 4G LTE connectivity specifically designed
for Machine-to-Machine (M2M) and industrial Internet of Things (IoT)
applications. This makes it an ideal solution for IoT applications such as
metering, tracking and tracing, fleet management and mHealth that require
the longevity and reliability of LTE in the decades ahead as 2G and 3G
networks phase out.
* Gemalto Partners with Samsung for the launch of Samsung Pay in Europe with
Innovative Security Solutions
Gemalto joins forces with Samsung to accelerate the deployment of Samsung
Pay through Gemalto's Allynis Trusted Service Hub (TSH). Samsung Pay is a
simple and secure mobile payment service that will provide wider acceptance
with NFC (Near Field Communication) and MST (Magnetic Secure Transmission)
working in most of merchant locations. Gemalto and Samsung are actively
working with payment issuers to roll out Samsung Pay to Europe.
* Sprint extends relationship with Gemalto to manage growing LTE deployments
across the U.S.
Gemalto broadens its longstanding relationship with Sprint through a multi-
year contract to manage growing LTE deployments across the U.S. With 57.7
million subscribers, Sprint will use Gemalto's Allynis Advanced Over-the-Air
(AOTA) Solution as a Service (SaaS) Platform to facilitate LTE service
activations and to manage the complexities of providing multi band 4G LTE
connectivity. The Gemalto solution helps Sprint easily deliver customers the
most up-to-date mobile technologies, services and innovations right to their
fingertips.
* Gemalto to provide solution for Samsung Gear S2 with 3G connectivity
Gemalto has provided the solution to Samsung Electronics for the launch of
their latest Gear S2 smartwatch. Gemalto's solution will allow users to
securely connect to the cellular networks. As a result, they will be able to
make voice and data calls, check emails and notifications, or access
applications, directly from their wrist, without being tethered to their
smartphones.
Outlook
For 2015, Gemalto anticipates another year of double digit growth in its profit
from operations. In the second semester, the closure of the U.S. 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 third quarter 2015 revenue presentation will be webcast in English today
at 3pm Amsterdam and Paris time
(2pm London time and 10am 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) +44 207 107 1613 or (US) +1 855 402 7764 or (FR)
+33 1 7077 0938
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.
Calendar
The full year 2015 results will be reported on Friday March 4, 2016, before the
opening of Euronext Paris.
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 |Hans Schrama
|M.: +33 6 1751 4467 |M. : +31 6 3017 8985
|sebastien.liagre(at)gemalto.com |hans.schrama(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.
Appendices
Appendix 1
Revenue by region
Third quarter Third quarter Year-on-year Year-on-year
? in millions 2015 2014 variation at variation at
constant historical
exchange rates exchange rates
-------------------------------------------------------------------------------
EMEA 333 273 +18% +22%
Americas 315 226 +23% +39%
Asia 121 126 (14%) (4%)
-------------------------------------------------------------------------------
Total revenue 769 626 +13% +23%
-------------------------------------------------------------------------------
Press release (PDF):
http://hugin.info/159293/R/1962211/715626.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#1962211]
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Datum: 29.10.2015 - 00:01 Uhr
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