Gemalto first semester 2017 results
(Thomson Reuters ONE) -
* Revenue of ?1.4 billion, lower by (8%) at constant exchange rates and (7%)
at historical exchange rates
* Government Programs and Machine-to-Machine acceleration in the second
quarter after a slow start
* Acquisition of 3M's Identity Management Business well received by customers
* Profit from operations at ?93 million, with ?50 million of free cash flow
* ?425 million goodwill impairment charge as a result of deteriorated
prospects for the removable SIM market
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, September 1, 2017, at 12:00am - Gemalto (Euronext NL0000400653 -
GTO), the world leader in digital security today announces its results for the
first semester 2017.
Key figures of the adjusted income statement
Year-on-year variations
First semester First semester at historical at constant
(? in millions) 2017 2016 exchange rates exchange rates
-------------------------------------------------------------------------------
Revenue 1,393 1,495 (7%) (8%)
Gross profit 502 586 (14%)
Operating (409) (415) (1%)
expenses
-------------------------------------------------------------------------------
Profit from 93 172 (46%)
operations
Profit margin 6.7% 11.5% (4.8 ppt)
-------------------------------------------------------------------------------
Philippe Vallée, Chief Executive Officer, commented: "In the second quarter,
Gemalto's year-on-year base of comparison in the US Payment business was at its
most challenging level, reflecting the on-going adjustments in US EMV demand. In
addition the removable SIM business deteriorated faster than we expected. As a
result, the Company's first semester results were disappointing. Looking ahead,
Gemalto expects to generate year-on-year stable revenue in the second semester
supported by an acceleration in its Enterprise, Government Programs and Machine-
to-Machine businesses leading to the outlook announced in July. The priorities
that I have set for the teams are to rapidly integrate the newly acquired
Identity Management Business, successfully execute the first actions of the
transition plan and focus our investments on offers that are key to our clients'
digital transformation."
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 acquisition of 3M's Identity
Management business in May 2017 is part of the Government Programs 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.
Adjusted income statement and profit from operations (PFO) non-GAAP measure
The consolidated financial statements are prepared in accordance with the
International Financial Reporting Standards (IFRS) and with section 2:362(9) of
the Netherlands Civil Code.
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 impairment 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 impairment of intangibles resulting from acquisitions are
defined as the amortization, and impairment expenses related to intangibles
assets and goodwill 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 an 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 impairment of intangibles resulting from
acquisitions.
Net debt and net cash
Net debt is a non IFRS measure defined as total borrowings net of cash and cash
equivalents. Net cash is a non IFRS measure defined as cash and cash equivalents
net of total borrowings.
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 2017 First semester 2016
-------------------------------------------------------------------------------
Year-on-year
Extract of variations
the ? in As a % of ? in As a % of
adjusted millions revenue millions revenue at at
income historical constant
statement exchange exchange
rates rates
-------------------------------------------------------------------------------
Revenue 1,392.8 1,495.2 (7%) (8%)
Gross profit 501.9 36.0% 586.3 39.2% (3.2 ppt)
Operating (409.1) (29.4%) (414.6) (27.7%) (1.6 ppt)
expenses
EBITDA 163.3 11.7% 239.3 16.0% (4.3 ppt)
-------------------------------------------------------------------------------
Profit from 92.8 6.7% 171.7 11.5% (4.8 ppt)
operations
-------------------------------------------------------------------------------
Net profit
(excl. non- 39.4 2.8% 106.4 7.1% (4.3 ppt)
controlling
interests)
Basic
Earnings per 0.44 1.20 (64%)
share (?)
Diluted
Earnings per 0.44 1.19 (63%)
share (?)
-------------------------------------------------------------------------------
Total revenue for the first semester 2017 came in at ?1,393 million, lower by
(7%) at historical exchange rates and (8%) at constant exchange rates.
Gross profit was lower by ?84 million, at ?502 million. The reduction in gross
profit for the Payment, SIM and related services was partially offset by the
increase from the other businesses. Gross margin was 36%, lower by 3 percentage
points year-on-year, as the operating leverage of Payment business and Mobile
segment were not fully realized during the semester.
Operating expenses were down, by (?5) million, at (?409) million through tight
control of expenses in Payment and SIM businesses while the Company continued to
invest in the growing businesses. As a result, profit from operations was ?93
million. The acquired Identity Management Business contributed ?1.5 million in
profit from operations since May 1.
Gemalto's financial income was (?11) million compared to (?23) million in the
first semester of 2016. This ?11 million improvement came mainly from a non-cash
currency impact related to the change in classification of equity securities.
Impairment of associates was a positive ?10 million due to a change in the
market capitalization of an associate. As a result, adjusted profit before
income tax came in at ?93 million.
Adjusted income tax expense was (?54) million in the first semester of 2017
compared with (?29) million one year ago. This (?26) million expense increase
mainly reflects the estimated non-cash deferred tax asset reduction following
Gemalto's 2017 profit from operations outlook revision. Excluding this non-
recurring impact, the adjusted income tax expense would have been (?12) million
and the adjusted income tax rate would have been 13% for the first semester.
This exceptional charge has no impact on the expected normative adjusted
effective tax rate going forward.
Overall, the adjusted net profit of the Company was ?39 million. Consequently,
adjusted basic earnings per share and adjusted diluted earnings per share came
in at ?0.44. Excluding the non-recurring tax asset reduction, the adjusted basic
earnings per share and adjusted diluted earnings per share came in at ?0.91 and
?0.90 respectively.
IFRS results
Amortization and impairment of intangibles resulting from acquisitions increased
by (?439) million to (?468) million. Most of this increase came from the
previously announced (?425) million one-off non-cash impairment, resulting from
the deteriorated prospects for the removable SIM market, mainly in relation to
the goodwill generated upon the IPO of Axalto in 2004 and the Axalto-Gemplus
merger in 2006. To a lesser extent the increase also came from the newly
acquired Identity Management Business. Restructuring and acquisition-related
expenses increased by (?23) million to (?37) million due to the first actions of
the transition plan, the implementation of a new information system (ERP) and
business combination costs. Gemalto equity-based compensation expense came in at
(?20) million.
Fair value adjustment related to the non-cash amortization of the IFRS
revaluation of SafeNet's pre-acquisition deferred revenue accounted for (?1)
million for the first semester 2017 compared to (?2) million for the same period
last year.
As a result, excluding the non-cash impairment, Gemalto recorded ?0.43 million
for the first semester of 2017 in its IFRS operating profit compared to ?108
million a year ago.
The income tax expense for the first semester at (?41) million is mainly
composed of a non-cash deferred tax asset reduction following Gemalto's revised
profit from operations outlook. Excluding these non-recurring item, the
impairment expenses and the anticipated restructuring expenses, the effective
tax rate of the Company is expected to be at the normative level for the full
year 2017.
The IFRS net result is at (?473) million for the first semester of 2017 and the
IFRS basic earnings per share and diluted earnings per share for the first
semester 2017 are (?5.27) and (?5.25) respectively. Excluding the impairments
and deferred tax asset reduction, the basic earnings per share and diluted
earnings per share are ?0.01.
Statement of financial position and cash position variation schedule
In the first semester of 2017, operating activities generated a cash flow of
?121 million before changes in working capital, lower compared to ?177 million
in 2016. Changes in working capital reduced cash flow by (?1) million, less than
during the same period of 2016.
Cash used in restructuring actions and acquisition related expenses increased by
(?7) million to (?23) million compared with the first semester of 2016 due to
the optimization of operation footprint and resources as well as implementation
of a new information system.
Capital expenditure and acquisition of intangibles represented a net cash
outflow of (?68) million, i.e. 4.9% of revenue compared to (?75) million, i.e.
5% for the same period of last year. Purchase of Property, Plant, and Equipment
reduced by ?9 million down to (?25) million and acquisition & capitalization of
intangibles came in at (?43) million.
As a result, in the first semester of 2017, the Company generated free cash flow
of ?50 million compared to ?64 million for the same period of 2016.
Acquisitions used (?761) million in cash as the Identity Management Business
acquisition was closed during the first semester of 2017.
Gemalto's share buy-back and liquidity programs generated a (?0.5) million net
cash outflow for the first semester of 2017. As at June 30, 2017, the Company
held 496,796 shares, i.e. 0.5% of its own shares in treasury. The total number
of Gemalto shares issued increased by 495,175 this semester, to 90,423,814
shares. Net of the 496,796 shares held in treasury, 89,927,018 shares were
outstanding as at June 30, 2017.
On May 18, 2017, Gemalto paid a cash dividend of ?0.50 per share in respect of
the fiscal year 2016, up +6% on the dividend paid in May 2016 which was of ?0.47
per share. This May 2017 distribution used ?45 million in cash.
Net proceeds from financing instruments generated a ?334 million cash inflow,
mainly from drawdown of commercial paper, issuance of private placements and
borrowings.
Cash in hand, net of bank overdrafts amounted to ?236 million as at June
30, 2017.
Considering the ?1,074 million total amount of borrowings as at June 30, 2017,
Gemalto's net debt position increased to ?838 million compared to a net debt
position of ?334 million as at June 30, 2016. The (?505) million variation is
related to the use of cash for the acquisition of 3M's Identity Management
Business, partially offset by the Company cash flow generation during the last
twelve months.
Segment information
Revenue variations are expressed at constant currency exchange rates unless
otherwise noted.
Year-on-year variations Payment & Total two main Patents &
and currencies impact Identity Mobile segments Others Total
(? in millions)
-------------------------------------------------------------------------------
Second quarter
Revenue 471 269 740 2 742
At constant rates (7%) (12%) (9%) +49% (9%)
At historical rates (7%) (10%) (8%) +49% (8%)
-------------------------------------------------------------------------------
During the second quarter, revenue decreased by (8%) at historical exchange
rates and (9%) at constant exchange rates. Payment & Identity segment revenue
was lower by (7%) at constant exchange rates. The decrease of the Payment
business was partially offset by the increase in Government Programs and Data
Encryption business line in the second quarter. The Mobile segment revenue was
lower by (12%) at constant exchange rates in the second quarter of 2017 compared
to 2016 due to the revenue decrease in the removable SIM business and Mobile
Platforms & Services activity.
Year-on-year variations Payment & Total two main Patents &
and currencies impact Identity Mobile segments Others Total
(? in millions)
-------------------------------------------------------------------------------
First semester
Revenue 875 516 1,391 2 1,393
At constant rates (8%) (10%) (8%) +45% (8%)
At historical rates (7%) (7%) (7%) +45% (7%)
-------------------------------------------------------------------------------
As a percentage of 63% 37% 100% 0% 100%
total revenue
-------------------------------------------------------------------------------
Overall, for the first semester of 2017, the Payment & Identity segment
contribution remained unchanged, compared with the same period of last year, at
63% of total Company revenue.
Contribution by
activity
First semester 2017
Embedded software Platforms & Total two main Patents &
(? in millions, & Products Services segments Others
variations at
constant exchange
rates)
-------------------------------------------------------------------------------
Revenue 937 453 1,391 2
Year-on-year revenue (9%) (8%) (8%) +45%
growth
As a percentage of 67% 33% 100% 0%
revenue
-------------------------------------------------------------------------------
In the first semester of 2017, Embedded software & Products were reduced by (9%)
due to lower SIM sales to mobile network operators and payment cards in
Americas. Platforms & Services activity decreased by (8%) at constant exchange
rates, representing 33% of total Company revenue. This is mainly due to the on-
going normalization of the US EMV market which reduced the level of issuance
services as well as the decline in the Mobile Platforms & Services activity.
Profit from operations Total Payment & Mobile
(? in millions) (including Patents & Others) Identity
-------------------------------------------------------------------------------
First semester 93 81 16
As a percentage of the total 100% 87% 18%
profit from operations
-------------------------------------------------------------------------------
First semester profit from operations came in at ?93 million as the operating
leverage for the Payment and SIM businesses has not been fully realized over the
semester. The contribution of the Payment & Identity segment for this semester
is 87% of the total profit from operations.
Based on the first semester revenue trends in Payment and removable SIM, Gemalto
has launched in April a transition plan which is expected to contribute over ?50
million to profit from operations annually. Since then, the Company has started
to align its capacity, footprint and resources to long-term US EMV market
demand. The Company has also initiated the shut-down of a sub-business line
activity as a first result of its portfolio review in order to align itself with
its long-term priorities. The Company continues to work on business efficiency
and portfolio streamlining. The expected in-year transition plan impact is
around ?15 million in 2017.
Payment & Identity
First semester 2017 First semester 2016 Year-on-year variations
-------------------------------------------------------------------------------
at at
? in As a % of ? in As a % of historical constant
millions revenue millions revenue exchange exchange
rates rates
-------------------------------------------------------------------------------
Revenue 875.0 936.8 (7%) (8%)
Gross profit 332.8 38.0% 374.0 39.9% (1.9 ppt)
Operating (252.0) (28.8%) (255.8) (27.3%) (1.5 ppt)
expenses
Profit from 80.8 9.2% 118.2 12.6% (3.4 ppt)
operations
-------------------------------------------------------------------------------
Payment & Identity's first semester revenue came in at ?875 million, lower by
(8%) at constant exchange rates compared to the same period in 2016. The
segment's Embedded software & Products sales were at ?532 million and its
Platforms & Services sales at ?343 million, lower by (8%) and (6%) year-on-year
respectively.
The Payment business was lower by (19%) at ?414 million. Sales in Americas
decreased by (37%) year-on-year during the first semester versus +33% a year
ago. This is due to the on-going return to normalized inventory levels of US EMV
cards at Gemalto's customers coupled with a soft market environment in Latin
America. Payment Embedded software & Products sales were lower by (18%) and
Payment Platforms & Services revenue decreased by (19%) compared to the first
semester of 2016. Furthermore, Gemalto is currently regrouping its Mobile
Financial Services offers with its eBanking offers to better align the digital
banking and payment offers in light of the European Payment Service Directive 2
(PSD2) initiative.
Revenue from the Enterprise business came in at ?217 million for the first
semester of 2017, stable at historical exchange rates and down (1%) at constant
exchange rates. The Data Encryption business line grew by 6% during the
semester. Authentication and Software Monetization revenues fell due to the
shift to cloud and software services subscription models. To meet the market
demand for cybersecurity solutions, the Enterprise business is increasing its
investments to expand its services portfolio in this growing sector.
The Government Programs business was up +11%, at ?243 million. Government
Programs' Embedded software & Products revenue sales expansion was +15% year-on-
year, and its Platforms & Services sales were up +1% year-on-year. The acquired
Identity Management Business contribution in the second quarter was ?22 million,
more than offset the decline in the organic portion of Government Platforms &
Services activity which had grown by +30% in the first semester of 2016. Project
backlog continued to expand during the first semester.
Overall, the Payment & Identity segment's gross margin came in at 38%, lower by
(1.9) percentage points compared to the first semester of 2016 as the operating
leverage in the Payment business was not fully realized due to the revenue
decrease.
Operating expenses were ?4 million lower at (?252) million in the first semester
of 2017, despite increased investment in the Enterprise business and the
addition of the acquired Identity Management Business. This was largely due to a
tightening of operating expenses in the Payment business.
As a result, profit from operations in Payment & Identity for the first semester
2017 came in at ?81 million and profit from operations margin at 9.2%.
Mobile
First semester 2017 First semester 2016 Year-on-year variations
-------------------------------------------------------------------------------
at at
? in As a % of ? in As a % of historical constant
millions revenue millions revenue exchange exchange
rates rates
-------------------------------------------------------------------------------
Revenue 515.6 556.8 (7%) (10%)
Gross profit 167.9 32.6% 212.0 38.1% (5.5 ppt)
Operating (151.5) (29.4%) (153.1) (27.5%) (1.9 ppt)
expenses
Profit from 16.4 3.2% 58.9 10.6% (7.4 ppt)
operations
-------------------------------------------------------------------------------
The Mobile segment posted revenue of ?516 million for the first semester of
2017. Revenue was lower by (7%) at historical exchange rates compared to the
same period of 2016.
Embedded software & Products sales for the segment came in at ?405 million,
lower by (9%) at constant exchange rates. SIM sales decreased by (17%) at ?239
million for the first semester partly due to lower market share in a more
competitive landscape as mobile network operators continue to shift their
investments from removable SIMs to focus on next generation connectivity. This
evolution was also coupled to soft demand in regions affected by stricter
subscription registration processes. SIM sales now represent only 17% of total
Company revenue in the first semester. The Machine-to-Machine business
accelerated in the second quarter, up +15% year-on-year, leading to revenue
growth of +7% at ?166 million in the first semester of 2017. New design wins
recorded during the period will support further business acceleration in the
second semester.
The Platforms & Services revenue for the Mobile segment was lower by (12%) in
the first semester of 2017 at ?111 million. The revenue decline is mainly due to
lower activity in Mobile Financial Services. Excluding Mobile Financial
Services, the Mobile Subscriber Services business line grew by +2%. Since the
adoption of GSMA specifications related to embedded SIMs (eSIMs) remote
activation and management, Gemalto's Mobile Subscriber Services business has
made significant progress with recent project wins in both the machine-to-
machine and consumer markets with clients such as Microsoft, Lenovo Connect,
AT&T and Telefónica.
Gross margin for the Mobile segment decreased to 32.6% this semester. This is
due to operating leverage not being fully realized as a consequence of lower
activities in removable SIM and Mobile Platforms & Services combined with an
expansion in the historically lower gross margin Machine-to-Machine business.
Operating expenses decreased to (?151) million this semester from (?153) million
in the first semester of 2016. This reflects double-digit reduction of the
removable SIM business operating expenses while investment continued in Machine-
to-Machine and in next generation connectivity.
As a result, the Mobile segment's profit from operations for the first semester
of 2017 was ?16 million.
Patents & Others
First semester 2017 First semester 2016 Year-on-year variations
-------------------------------------------------------------------------------
at at
? in As a % of ? in As a % of historical constant
millions revenue millions revenue exchange exchange
rates rates
-------------------------------------------------------------------------------
Revenue 2.2 1.5 +45% +45%
Gross profit 1.2 56.7% 0.4 24.6% -
Operating (5.7) - (5.7) - -
expenses
Profit from (4.5) - (5.4) - -
operations
-------------------------------------------------------------------------------
The Patents & Others segment, generated ?2 million in revenue in the first
semester of 2017, versus ?1.5 million in the first semester of 2016. Operating
expenses were stable, and profit from operations came in at (?4) million in the
first semester of 2017.
Additional information
Below is a highlight of new contracts and achievements published by the Company
in the first semester of 2017
Payment & Identity
January, 5 2017 Uganda speeds visa issuance and strengthens border
security with Gemalto
January, 31 2017 Gemalto to supply new Digital Identity Solution for the
Swedish Tax Agency
March, 21 2017 Gemalto's HSM enables Microsoft Azure Information
Protection customers to maintain full control
March, 28 2017 Gemalto releases findings of 2016 Breach Level Index
June, 1 2017 Four Canadian provinces award Gemalto for secure
driver's license cards and issuance
Mobile
January, 3 2017 AT&T strengthens Internet of Things (IoT) offerings with
Gemalto's solution
February, 21 2017 Gemalto and Microsoft join forces to provide seamless
connectivity for Windows 10 devices
February, 28 2017 GigSky chooses Gemalto to enable seamless connectivity
for devices around the world
May, 4 2017 Gemalto's secure smart chip to be integrated in the
Samsung Galaxy S8 in selected markets
June, 28 2017 Mobike and Gemalto collaborate to bring IoT connectivity
to bike-sharing services beyond China
Industry Recognitions
January, 18 2017 Gemalto wins Privacy Design Award for its Identity
Verification solution
March 7, 2017 Gemalto LTE Cat. 1 solution wins IoT Evolution Connected
Home & Building Award
March, 23 2017 Gemalto Wins 2017 Cybersecurity Excellence Award for
Best Encryption Product
May, 3 2017 National Police Board of Finland & Gemalto win industry
award for new ePassports and eID cards
May, 19 2017 Gemalto wins IoT Excellence Award for industry's first
LTE M connectivity module
May, 24 2017 Gemalto wins ICMA Élan Award for Maryland's secure
polycarbonate driver's license
Outlook
Looking ahead, compared with the same period of last year, the second quarter
double digit revenue decreases in Payment in Americas and the SIM business are
anticipated to continue for the second semester. These reductions should be
offset by the expected revenue acceleration in Enterprise, Machine-to-Machine
and Government Programs including the acquired Identity Management Business,
leading to stable Company revenue for the second semester year-on-year.
Taking into account these revenue trends, the operating leverage of Payment and
SIM businesses will not be realized as expected. The effect of the transition
plan announced in April will start contributing materially towards the end of
the year. Gemalto estimates its 2017 second semester profit from operations to
be between ?200 million and ?230 million, leading to an expected full year
profit from operations between ?293 million and ?323 million.
Live Audio Webcast and Conference call
Gemalto first semester 2017 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 9462 or (US) +1 855 402 7762 or (FR)
+33 1 7077 0935
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, 2017, is available on our investor web site
(www.gemalto.com/investors).
Reporting calendar
Third quarter 2017 revenue will be reported on Friday October 27, 2017, before
the opening of Euronext Amsterdam.
Gemalto will organize a Strategy Day for the financial community in the course
of the first semester 2018.
Stock Exchange Listing
Gemalto N.V. is dual listed on Euronext Amsterdam and Paris, in the compartment
A (Large Caps).
Mnemonic: GTO
Exchange Dual listing on Euronext Amsterdam and Paris
Market of reference 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
| | |
|
|Jean-Claude Deturche
|M.: +33 6 2399 2141
|jean-
|claude.deturche(at)gemalto.com
|
|
|Sébastien Liagre
|M.: +33 6 1751 4467
|sebastien.liagre(at)gemalto.com
This press release contains inside information as referred to in article 7
paragraph 1 of Regulation (EU) 596/2014 (Market Abuse Regulation).
About Gemalto
Gemalto (Euronext NL0000400653 GTO) is the global leader in digital security,
with 2016 annual revenues of ?3.1 billion and customers in over 180 countries.
We bring trust to an increasingly connected world.
From secure software to biometrics and encryption, our technologies and services
enable businesses and governments to authenticate identities and protect data so
they stay safe and enable services in personal devices, connected objects, the
cloud and in between.
Gemalto's solutions are at the heart of modern life, from payment to enterprise
security and the internet of things. We authenticate people, transactions and
objects, encrypt data and create value for software - enabling our clients to
deliver secure digital services for billions of individuals and things.
Our 15,000+ employees operate out of 112 offices, 43 personalization and data
centers, and 30 research and software development centers located in 48
countries.
For more information visit
www.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 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 Adjusted financial information to IFRS
------------------------------------------------------------------------------
Amortization
Six-month and Restructuring Equity-based Fair value
period Adjusted impairment and compensation adjustment IFRS
ended June financial of acquisition- charge and upon financial
30 2017 information intangibles related associated business information
(? in resulting expenses costs acquisitions
thousands) from
acquisitions
------------------------------------------------------------------------------
Revenue 1,392,842 - - - - 1,392,842
Cost of (890,920) (43,580) (11,692) (5,172) (1,042) (952,406)
sales
------------------------------------------------------------------------------------------
Gross 501,922 (43,580) (11,692) (5,172) (1,042) 440,436
profit
Operating (409,147) (424,671) (24,940) (14,662) (873,420)
expenses
-------------------------
Profit from 92,775
operations
------------------------------------------------------------------------------------------
Operating (468,251) (36,632) (19,834) (1,042) (432,984)
profit
Financial
income (11,420) (11,420)
Share of
profit /
(loss) from
associates 1,773 1,773
Non-
recurring
profit /
(loss)
relating to
associates 10,105 10,105
Income Tax (54,262) (41,225)
------------------------------------------------------------------------------------------
Net profit
adjusted 38,972 (473,751)
Non-
controlling
interests (459) (459)
------------------------- -------------
Net profit
excluding
non-
controlling
interests 39,431 (473,292)
+----------------------------------------------------------------------------------------+
|Number of |
|shares 89,837 89,837|
|Basic |
| |
|Number of |
|shares 90,195 90,195|
|Diluted |
+----------------------------------------------------------------------------------------+
+----------------------------------------------------------------------------------------+
|EPS Basic 0.44 (5.27)|
|(?) |
| |
|EPS Diluted 0.44 (5.25)|
|(?) |
+----------------------------------------------------------------------------------------+
*Adjusted from deferred tax asset **Adjusted from impairments and deferred tax asset
reduction reduction
+----------------------------------------------------------------------------------------+
|EPS Basic *0.91 **0.01|
|(?) |
| |
|EPS Diluted *0.90 **0.01|
|(?) |
+----------------------------------------------------------------------------------------+
The first semester 2017 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, 2017, i.e. 89,836,968 shares. The first semester
2017 adjusted diluted earnings per share is determined by using 90,194,882
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 share based instruments were exercised (892,434 instruments) and
the proceeds received from the instruments exercised (?29,179,802) were used to
buy-back shares at the average share price of the first semester 2017 (534,520
shares) at ?54.59.
------------------------------------------------------------------------------
Amortization
Six-month and Restructuring Equity-based Fair value
period Adjusted impairment and compensation adjustment IFRS
ended June financial of acquisition- charge and upon financial
30 2016 information intangibles related associated business information
(? in resulting expenses costs acquisitions
thousands) from
acquisitions
------------------------------------------------------------------------------
Revenue 1,495,161 - - - - 1,495,161
Cost of (908,836) (29,223) (6,365) (2,123) (1,635) (948,182)
sales
------------------------------------------------------------------------------------------
Gross 586,325 (29,223) (6,365) (2,123) (1,635) 546,979
profit
Operating (414,614) (7,709) (16,963) (439,286)
expenses
-------------------------
Profit from 171,711
operations
------------------------------------------------------------------------------------------
Operating (29,223) (14,074) (19,086) (1,635) 107,693
profit
Financial
income (22,679) (22,679)
Share of
profit /
(loss) from
associates 3,576 3,576
Non-
recurring
profit /
(loss)
relating to
associates (16,887) (16,887)
Income Tax (28,512) (13,172)
------------------------------------------------------------------------------------------
Net profit
adjusted 107,209 58,531
Non-
controlling
interests 787 787
------------------------- -------------
Net profit
excluding
non-
controlling
interests 106,422 57,744
+----------------------------------------------------------------------------------------+
|Number of |
|shares 88,320 88,320|
|Basic |
| |
|Number of |
|shares 89,340 89,340|
|Diluted |
+----------------------------------------------------------------------------------------+
+----------------------------------------------------------------------------------------+
|EPS Basic 1.20 0.65|
|(?) |
| |
|EPS Diluted 1.19 0.65|
|(?) |
+----------------------------------------------------------------------------------------+
Appendix 2
Interim consolidated statement of financial position
(? in thousands) June 30, December 31,
------------------------
2017 2016
----------------------------------------------------------------
ASSETS
Non-current assets
Property, plant and equipment, net 323,563 329,448
Goodwill, net 1,495,291 1,561,666
Intangible assets, net 815,024 564,588
Investments in associates 11,577 48,011
Other investments 40,609 -
Deferred income tax assets 63,981 111,467
Other non-current assets 77,219 64,554
Derivative financial instruments 8,352 -
------------------------
Total non-current assets 2,835,616 2,679,734
Current assets
Inventories, net 258,317 244,962
Trade and other receivables, net 961,443 1,027,215
Derivative financial instruments 36,972 11,404
Cash and cash equivalents 238,593 663,517
------------------------
Total current assets 1,495,325 1,947,098
------------------------
Total assets 4,330,941 4,626,832
-------------------------------------------------------------------------------
Equity
Share capital 90,424 89,929
Share premium 1,308,279 1,291,795
Treasury shares (23,202) (29,042)
Fair value and other reserves 3,735 (59,872)
Cumulative translation adjustments (20,027) 74,265
Retained earnings 784,971 1,303,176
------------------------
Capital and reserves attributable to 2,144,180 2,670,251
the owners of the Company
------------------------
Non-controlling interests 2,477 5,196
------------------------
Total equity 2,146,657 2,675,447
Liabilities
Non-current liabilities
Borrowings 724,883 557,518
Deferred income tax liabilities 136,853 120,109
Employee benefit obligations 132,356 133,136
Provisions and other liabilities 106,561 121,480
Derivative financial instruments 471 12,604
------------------------
Total non-current liabilities 1,101,124 944,847
------------------------
Current liabilities
Borrowings 351,908 173,088
Trade and other payables 678,752 715,767
Current income tax liabilities 22,287 31,383
Provisions and other liabilities 26,556 17,332
Derivative financial instruments 3,657 68,968
------------------------
Total current liabilities 1,083,160 1,006,538
------------------------
Total liabilities 2,184,284 1,951,385
Total equity and liabilities 4,330,941 4,626,832
-------------------------------------------------------------------------------
Appendix 3
Cash position variation schedule
Six-month period ended
June 30
-------------------------------------------------------------------------------
? in millions 2017 2016
-------------------------------------------------------------------------------
------------------------------------------------------------- -----------------
Cash and bank overdrafts, beginning of period 663 405
------------------------------------------------------------- -----------------
Cash generated by operating activities, before 121 177
changes in working capital
Net change in working capital (1) (43)
Cash used in restructuring actions and acquisition (23) (16)
related expenses
------------------------------------------------------------- -----------------
Net cash generated by operating activities before
Time de-correlated hedging effect / (Prepaid 97 117
derivatives)
------------------------------------------------------------- -----------------
Time de-correlated hedging effect / (Prepaid 21 22
derivatives)
------------------------------------------------------------- -----------------
Net cash generated by operating activities 118 139
------------------------------------------------------------- -----------------
Capital expenditure and acquisitions of intangibles (68) (75)
------------------------------------------------------------- -----------------
Free cash flow 50 64
------------------------------------------------------------- -----------------
Interest received 1 1
Cash used by acquisitions (761) (3)
Currency translation adjustments (7) 1
------------------------------------------------------------- -----------------
Cash generated (used) by operating and investing (717) 64
activities
------------------------------------------------------------- -----------------
Cash generated (used) by the liquidity and share (0) 0
buy-back program
Dividend paid to Gemalto shareholders (45) (42)
Net proceed (repayment) from/of financing 334 (22)
Datum: 01.09.2017 - 00:00 Uhr
Sprache: Deutsch
News-ID 558506
Anzahl Zeichen: 65579
contact information:
Town:
Meudon
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 251 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Gemalto first semester 2017 results"
steht unter der journalistisch-redaktionellen Verantwortung von
Gemalto (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
