Gemalto Announces 2012 Full Year Results

Gemalto announced its results for the full year 2012. Revenue of the Company for all its operations reached €2.25 billion. The largest part of the growth was provided by the Mobile Communication and Security segments, which generated additional revenue of €204 million. Secure Transactions and Machine-to-Machine also contributed positively to revenue growth.

Across all segments, Platforms & Services activities grew by 26%, to account for €392 million in 2012, generating 40% of the total company growth and further increasing their share of the company’s revenue. In the mobile payment and the government sectors substantial long-term contracts were signed and their deployments initiated.

Gross profit for the Company was up 15%, or €113 million, to €864 million. This represents a gross margin of 38.5%, higher by 1.2 percentage point on 2011. This gross profit improvement was driven by gross margin increases in the Mobile Communication and Secure Transactions segments as well as by revenue growth in Security.

Operating expenses increased by 8% to €558 million, representing an essentially stable ratio to revenue of 25%. Expenses in operating resources grew in all segments, especially in research and development, to support project deployments and future growth opportunities.

Full year profit from all operations came in at €306 million, up a remarkable 20% on the previous year’s performance that benefited from the one-time positive contribution from a gain on the re-measurement to fair value of Gemalto’s investment in a Chinese JV.

Driven by the positive developments in all main segments, the year-on-year positive variation in profit from ongoing operations reached 26%, settling at €305 million despite a €9 million decrease in profit from operations recorded in the Patents segment, related to ongoing litigation the company initiated in the U.S.

Continuing deployments of fourth generation mobile networks, acceleration in the deployment of infrastructures enabling mobile payment services and increasing adoption of electronic identity programs supported the improvement. Platforms & Services activities contributed markedly to the profit increase through strong revenue growth and better absorption of operating costs, which had increased substantially in these activities since the beginning of the current long-term strategic plan in preparation for the strong involvement of Gemalto in mobile payment service deployments.

“Gemalto achieved a milestone year, posting record results and delivering faster than planned on what we set out to do: over the past three years we grew our revenue and profit by close to 40% and 80% respectively, and kept a strong net cash position,” said CEO Olivier Piou. “In 2012, we also secured a large number of long-term contracts in the mobile payment and government sectors, which will bolster our profitable expansion into the future. With the growth opportunities that we see in front of us, we have reinforced the investments in our businesses, preparing to fulfill the ambitions of our next long-term development plan.”

For the full year 2013, Gemalto anticipates double digit revenue expansion 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 in the second part of the year.