Gemalto Reports First Semester 2013 Results

Gemalto announced its results for the first semester 2013. Revenue for all operations for the first semester was €1,134 million, up by +13% at constant exchange rates and by +11% at historical rates, with all segments increasing their revenue. The pace of growth accelerated over the course of the semester, with the second quarter revenue increase settling at +16%, following +9% in the first quarter.

The Secure Transactions segment developed particularly well over the semester, with revenue growth of +18%, and the Security segment once again posted double digit revenue growth. Platforms & Services revenue expanded across the company by +25%, generating 36% of total company revenue growth, to reach €208 million for the semester.

Gross profit was up +10%, i.e. up by €40 million, to €427 million, representing essentially stable year-on-year gross margin of 38%. The gross margin increase in Mobile Communication and Machine-to-Machine segments, resulting from a better product mix, and in the Patents segment, benefiting from a partial resumption in licensing activity, offset lower gross margin in the Secure Transactions and Security segments. Both those segments incurred additional operational costs this semester in order to properly address the strong growth in their businesses, and benefited from gross margin improvements only towards the end of the second quarter when operational efficiencies began to kick in.

Operating expenses for all operations, at €297 million, were stable when compared to the previous semester, and were up +8% year-on-year. The planned increase, driving profit seasonality, was essentially attributable to additional investments in research and development, up +10%, as well as in sales and marketing, up +11%, excluding the impact of assets held for sale.

As a result, first semester 2013 profit from operations for all operations came in at €130 million or 11.5% of revenue, up +16% on the comparable period of 2012. This expansion was driven by the increase in the contribution from ongoing operations from all segments other than the Security segment.

For the full year 2013, Gemalto anticipates double-digit expansion in both profit from operations and revenue at constant exchange rates. Increased investment in operations to drive business development beyond 2013 should lead to a more pronounced seasonality in profit from operations between the two semesters. Gemalto’s next long-term development plan and objectives will be announced on Sept. 5, 2013.