Gemalto 2007 sales flat

Olivier Piou, Gemalto CEO announced in preliminary indications that the company adjusted operating income should be above the EUR 71 million consensus. Olivier Piou cited the "excellent year-end performance, faster and better realization of synergies" as being a solid basis for earnings performance.

Gemalto net cash position was EUR 314 million at the end of 2007 versus EUR 396 million at the end of 2006, after spending EUR 148 million on the share repurchase programs

In Mobile Communications, Gemalto sales were EUR 273.5 million in Q4/2007, a 7% growth vs. Q4/2006. The company mentions an improvement in product mix as the main reason for this performance. Within these mobile communication sales for Q4/2007, software and services experienced a 30% growth vs. Q4/2006, due to deployments of wireless solutions with operators across all regions.

Mobile Communication year on year ASP (average selling price) erosion has been limited to 2%, a performance, especially compared to the 25% decline recorded in 2006, which was due to a combination of market and Gemalto internal factors.

In Secure Transactions, Gemalto gained from EMV deployments in Europe, even if the commercial environment is getting more competitive. A large part of the growth comes from personalization activities and contactless cards sales. Gemalto also got certified with its SECCOS operating system in Germany (cf. Smart Insights #08-03).

The Security segment includes Government programs and Identity & Access Management (IAM). Q4 sales for this segment were EUR 62.2 million, a 35% growth vs. Q4/2006. The segment faced delays in e-Healthcare projects, particularly in Western Europe, but benefited from large deliveries of e-Passports and e-ID cards, and by services which are part of comprehensive end-to-end solutions. IAM revenue was up by 14% in Q4/2007, driven by deliveries of online banking authentication solutions to Barclays Bank in the UK as well as shipments of secure USB tokens to Asian customers, and also the launch of smart USB devices providing portable authentication and secure data storage for computer users.

Patent licensing activity generated revenue of EUR 23 million for the full year 2007, compared with EUR 27 million in 2006. Gemalto owns the combined Intellectual Property portfolio of Gemplus, Axalto and Bull CP8, previously acquired by Axalto.

Public Telephony business declines at a quicker rate, -21% year on year, due to Mobile Communication penetration.

Point of Sales terminals activity launched a new technology platform based on a common, highly adaptable new kernel. This activity grew by 16% year on year.

Gemalto also provides a regional analysis, showing stability in the regional sales split:

And sales figures in volume for microprocessor cards, and, more globally, secure personal devices: