Oberthur reorganizes its activities, and plans acquisitions

This movement will allow to group traditional and smart card related activities by segment:

• The identity segment is to be made of traditional activities (passports, visas, identity cards, banknotes, etc…) and the ePassport activities. This activity will also include the CPS offer for personalization software. Sales organizations from OCS and FCOF will be merged, giving the new group a market presence in 50 countries.
• The mobile communication segment will include the scratch card activities (disposable cards with a hidden number used as a prepaid SIM recharge). Oberthur group sold 330 million scratch cards in 2006, and estimates the total market to be 15 billion scratch cards annually.
• The Axytrans cash protection business the secure cash-in-transit equipment and ATM protection business, currently only active in France and Belgium is to be expanded.

The new group would report pro-forma 2006 revenue of EUR 645 million, of which 80% are contributed by the card business (EUR 350.5 million of pro-forma sales for H1 2007). The movement is to lead to improved margins with a pro-forma 2006 EBITDA of EUR 67.5 million, or 10.5% of sales. The final approval is to be delivered in an Extraordinary General Meeting on December 27th, 2007.

The objective of the reorganization is to make the new structure less dependent on the smart card industry cycles by combining activities with different cycles. It will also allow the Savare family (who owns 85% of FCOF), to offer a larger part of the shareholders equity on the stock market. After the completion of this project, FCOF will own 69 to 71% of the new group.

Thomas Savare, Delegate General Manager of FCOF mentioned the new group is considering acquisitions in the smart card industry.