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Gemalto first quarter 2016 revenue

ID: 1431463
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(Thomson Reuters ONE) -


* Revenue at ?691 million, up +1% at historical exchange rates and flat at
constant exchange rates
* Strong head start in Government Programs, Machine-to-Machine, Enterprise and
Payment fully offsets softer markets in Latin America and Asia and lower
sales to mobile network operators
* 2016 outlook confirmed


Revenue variations are at constant exchange rates except where otherwise
noted.
All figures presented in this press release are unaudited.


Amsterdam, April 29, 2016 - Gemalto (Euronext NL0000400653 - GTO), the world
leader in digital security today announces its revenue for the first quarter of
2016.
      Main segments   Main activities
------------------ --------------------------
First quarter Embedded Platforms &   Patents &
2016 Total   Payment & Mobile   software Services Others
(? in Identity & Products (P&S)
millions) (E&P)
---------------------- --------------------------------------------- ----------
Revenue 691   433 258   468 222   0
-------------------------------------------------------------------------------
Year-on-year
variation at =   +17% (20%)   (8%) +22%   n.s.
constant
exchange rates

Year-on-year
variation at +1%
historical
exchange rates


Olivier Piou, Chief Executive Officer, commented: "The revenue for the first
quarter 2016 illustrates the success of Gemalto''s diversification strategy and
the resilience of its business model. Strong performances in Government
Programs, Machine-to-Machine, Enterprise and Payment have offset lower revenues


from SIM and related services.  We continue to focus our efforts and investment
on our higher growth businesses, and confirm the improvement in our gross margin
this quarter towards achieving our 2016 and 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 in 2015 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.

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).

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
First quarter Payment Embedded Platforms   &
2016 Total   & Identity Mobile   software & Services Others
(? in millions) & Products
----------------------- ---------------------------------------------- --------
Revenue 691   433 258   468 222   0

As a percentage
of  total  100% 63% 37%   68% 32%   0%
revenue
-------------------------------------------------------------------------------

For the first quarter of 2016, total revenue came in at ?691 million, up +1% at
historical exchange rates and stable at constant exchange rates. Payment &
Identity, representing 63% of total Company revenue, posted sales of ?433
million, up +17% year-on-year.

Embedded software & Products revenue of ?468 million was (8%) lower compared to
the same period last year due to lower sales to mobile network operators and to
a lesser extent to lower sales to banks in China. Embedded software & Products
activity for Government Programs and Machine-to-Machine continued to show strong
positive trends during the quarter. Platforms & Services activities,
representing 32% of first quarter Company revenue, posted sales of ?222 million,
an increase of +22% year-on-year, supported by the expansion in payment issuance
services and data protection solutions.

The effects of currency movement in the first quarter of 2016 are minimal
compared to the first quarter of 2015, resulting in a difference of less than 1
percentage point between revenue growth at historical and constant exchange
rates. The hedging program, which aims at partially neutralizing the impact of
sudden currency variations on the Company''s profit from operations, produced a
0.1 percentage point difference compared to the same period last year.

The first quarter revenue of 2016 in the Americas region is stable compared to
the same period in 2015.  North America continued to grow despite the high
comparison basis in Mobile sales last year, fully offsetting the soft market
environment in Latin America. Revenue variations by region, at constant and
historical exchange rates, are presented in Appendix 1.


Segment information

Payment & Identity

? in millions First quarter First quarter
2016 2015
------------------------------------------------------------
Revenue 433 369

Year-on-year variation at +17%
constant exchange rates
------------------------------------------------------------

The Payment & Identity segment''s revenue came in at ?433 million, increasing by
+17% compared to the previous year.

Embedded software and Products revenue was up by +7% at ?261 million. The
segment''s Platforms & Services revenue came in at ?172 million, growing by +35%
compared to the same period last year.

The Payment business grew +12% year-on-year, reaching ?233 million. The Americas
continue to post the largest growth with strong sales of EMV payment cards and
issuance services in the United States offsetting lower sales in Asia.

The Enterprise business revenue increased to ?103 million, up +14% on the same
period in 2015. The trend in revenue mix within the business continues to move
towards a higher proportion of software services.
The Government Programs business was up +34% versus a flat first quarter in
2015, at ?97 million. The revenue increase stems from strong deliveries of
previously won projects in all regions, and ?6 million from the addition of Trüb
AG, acquired in the second quarter of 2015.


Mobile

? in millions First quarter First quarter
2016 2015
------------------------------------------------------------
Revenue 258 316

Year-on-year variation at (20%)
constant exchange rates
------------------------------------------------------------

The Mobile segment posted revenue of ?258 million, (20%) lower at constant
exchange rates compared to the first quarter of previous year.

Embedded software & Products revenue for the segment came in at ?207 million.
SIM sales were lower by (34%) at ?133 million due to the tail-end effect of the
U.S. operators mobile payment service 2015 closing announced earlier and to
lower demand in Latin America and Asia. The Machine-to-Machine business
continued to grow, by +12% year-on-year on top of a strong +25% increase a year
ago, at ?75 million driven by 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 ?50 million, reduced by
(9%) year-on-year as Mobile Financial Services revenue decreased year-on-year,
also due to last year''s U.S. operators mobile payment service closing.


Patents & Others

? in millions First quarter First quarter
2016 2015
------------------------------------------------------------
Revenue 0.4 0.6

Year-on-year variation at (29%)
constant exchange rates
------------------------------------------------------------

Patents & Others revenue was ?0.4 million this quarter versus ?0.6 million
during the same period in 2015.


Additional information

* Finland selects Gemalto for its new secure electronic passport and eID
Gemalto has been chosen by the National Police Board in Finland to supply
the country''s new ePassport, which will enable secure and faster border
crossings. The new travel document has advanced security features and is
fully compliant with ICAO1 requirements. Gemalto is already responsible for
Finland''s polycarbonate electronic ID (eID) and resident permit cards. Under
the new multi-year contract Gemalto will produce and personalize hundreds of
thousands of Sealys ePassports and eID cards each year. These will be issued
to citizens within days or even hours, via a convenient nationwide network
of trusted retail outlets and delivery points.

* Gemalto releases findings of 2015 Breach Level Index
Gemalto released the latest findings of the Breach Level Index, revealing
that 1,673 data breaches led to 707 million data records being compromised
worldwide during 2015. The Breach Level Index (BLI) is a global database
that tracks data breaches globally and measures their severity based on
multiple dimensions, including the type of data and the number of records
compromised, the source of the breach, and whether or not the data was
encrypted. According to the Breach Level Index, more than 3.6 billion data
records have been exposed since 2013 when the index began benchmarking
publicly disclosed data breaches.

* Gemalto and PROSA Partner to Offer Mobile Payments in Mexico
Gemalto and PROSA, one of the largest payment processors in Latin America,
announce a partnership to bring mobile payments to Mexico. PROSA has
operations in eight Latin American countries and will provide mobile payment
services to all customers, which include 95% of credit, debit and prepaid
card issuers in Mexico. Gemalto''s Allynis Trusted Service Hub (TSH) enables
easy new customer onboarding, which allows banks to swiftly launch their own
NFC mobile payment wallets utilizing host card emulation (HCE). Another
important feature of Gemalto''s TSH is its ability to provision payment
wallets from device manufacturers and mobile network operators as they
launch in Mexico.

* Verizon certifies Gemalto''s first Cat. 1 LTE M2M Solution for IoT
Gemalto announces its leading edge Cinterion® Cat. 1 LTE M2M module is
Verizon certified to connect to the largest and most reliable 4G LTE network
in the U.S. M2M and IoT device manufacturers currently using 2G or 3G
technologies will now have a ruggedized industry connectivity solution for
devices that require the performance and longevity of 4G networks. Machine
to Machine (M2M) device makers leveraging the Verizon 4G LTE network have
access to a future-proof Category 1 solution enabling highly efficient, cost
optimized LTE connectivity and a quick go-to-market roadmap.

* Gemalto and Bridge Alliance, a partnership of 35 leading operators in Asia,
demonstrate GSMA standards-based solution for multi-country deployment of
IoT devices
Gemalto and Bridge Alliance demonstrated a solution for multi-country
deployment of IoT devices at the Mobile World Congress using Gemalto''s
LinqUs On-Demand Connectivity (ODC) subscription management solution. Bridge
Alliance is a partnership of 35 leading operators in Asia Pacific, Middle
East and Africa, serving over 750 million customers. This demonstration,
based on the GSMA interoperable standards, shows how hermetically sealed M2M
and IoT devices such as connected cars or smart meters can securely connect
to any Bridge Alliance Member Operator using remote ''over-the-air''
provisioning.

* Gemalto and Jasper Partner to Simplify the Global Deployment of IoT Devices
Gemalto and Jasper, a global Internet of Things (IoT) platform leader, today
announced a partnership to simplify global deployment of IoT devices and
services through on-demand subscription management. Integrating Jasper''s IoT
service platform with Gemalto''s LinqUs On-Demand Connectivity removes the
complexity of deploying connected services worldwide - for mobile operators,
device manufacturers, and application providers. Customers can provision and
manage subscriptions on devices remotely via a single embedded SIM (eSIM),
resulting in more efficient and cost-effective deployment models while
enabling rapid distribution and device activation.

Outlook

For 2016, with the positive trends in Enterprise, Government Programs, Machine-
to-Machine and the US EMV ramp-up effort completed, Gemalto expects to generate
a +1.5 percentage point gross margin increase, accelerating its profit from
operation expansion towards its 2017 objectives.


Live Audio Webcast and Conference call

Gemalto first quarter 2016 revenue 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 9457     or     (US) +1 855 402 7762     or     (FR)
+33 1 7077 0939

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

Gemalto N.V. will hold its 2016 Annual General Meeting of Shareholders (AGM) on
Thursday, May 19, 2016 at the Hyatt Place Amsterdam Airport Hotel, Rijnlanderweg
800, 2132 NN Hoofddorp (Haarlemmermeer), the Netherlands at 2:00 p.m. CET.

The first semester 2016 results will be reported on Friday August 26, 2016,
before the opening of Euronext Paris.


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
| |

Sébastien Liagre
M.: +33 6 1751 4467
sebastien.liagre(at)gemalto.com



About Gemalto

Gemalto (Euronext NL0000400653 GTO) is the global leader in digital security,
with 2015 annual revenues of ?3.1 billion and customers in over 180 countries.
We bring trust to an increasingly connected world.

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 14,000+ employees operate out of 118 offices, 45 personalization and data
centers, and 27 research and software development centers located in 49
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''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

First quarter First quarter Year-on-year Year-on-year
? in millions 2016 2015 variation at variation at
constant exchange historical
rates exchange rates
-------------------------------------------------------------------------------
EMEA 299 282 +6% +6%

Americas 274 270 = +1%

Asia 118 134 (13%) (12%)
-------------------------------------------------------------------------------
Total revenue 691 686 = +1%
-------------------------------------------------------------------------------

Press Release (PDF):
http://hugin.info/159293/R/2008126/742638.pdf



This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.

Source: Gemalto via GlobeNewswire
[HUG#2008126]






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Date: 04/29/2016 - 00:01
Language: English
News-ID 1431463
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