AMSTERDAM, Oct 29, 2015 - ( JCN Newswire ) - Gemalto, the world leader in digital security today announces its revenue for the third quarter of 2015.
- Revenue at EUR 769 million, up +23% at historical exchange rates and +13% at constant exchange rates
- Platforms & Services revenue up +74% at constant exchange rates and +13% pro forma
- Trend continues to be positive in Government Programs, Payment, Machine-to-Machine and lower for sales to mobile network operators
Olivier Piou, Chief Executive Officer, commented: "The third quarter revenue of 2015 continues to show the successful diversification of Gemalto. Payment & Identity now represents over 60% of our sales, and Platforms & Services year-to-date revenue has already surpassed the full year P&S 2014 revenue. Within the lower Mobile segment, the transformation is evidenced by the Machine-to-Machine strong revenue growth and we shift our resources on the fastest growing businesses to deliver another year of double digit profit from operations growth in 2015, towards our upgraded 2017 objectives."
Basis of preparation of financial 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 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).
For the third quarter of 2015, total revenue came in at EUR 769 million, up +13% at constant exchange rates. Payment & Identity representing 61% of total Company revenue, posted sales at EUR 469 million, up +20% pro forma.
Embedded software & Products revenue of EUR 534 million was (1%) compared to the same period last year due to lower sales to mobile network operators and a lower proportion of hardware authentication devices in the Enterprise business. Embedded software & Products activity for Government Programs, Payment and Machine-to-Machine continue to show strong positive trends in the quarter. Platforms & Services activities posted sales of EUR 235 million, an increase of +74% year-on-year, supported by the rapid expansion in payment issuance services, eGovernment services and the addition of SafeNet. Patents & Others revenue was EUR 1 million this quarter versus EUR 6 million last year.
On a pro forma basis Company's total revenue expanded by +4%. SafeNet consolidation added +12 percentage points to the 2014 reported sales. The strong U.S. dollar versus Euro in the third quarter of 2015 compared to the third quarter of 2014 together with the now larger part of the Company's U.S. dollar dominated revenue generated a +9 percentage points difference between revenue growth at historical and at constant exchange rates. This currency variation has been partially offset by the hedging program, which aims at partially neutralizing the impact of sudden currency variations on the Company's profit from operations, that induced a (2) percentage point reduction on the reported sales.
At the current rates, the hedging program should generate a cash outflow of EUR 40 million in the second semester of 2015, for a full year total of EUR 124 million which will be recovered mechanically within the next three years.
Revenue variations by region, at constant and historical exchange rates, are presented in Appendix 1.
Payment & Identity
The Payment & Identity segment's revenue came in at EUR 469 million, increasing by +51% compared to the previous year.
Embedded software and Products revenue grew by +19% at EUR 291 million. The segment's Platforms & Services revenue, which includes SafeNet's platforms, software and services sales, more than doubled, at EUR 178 million. The segment's Platforms & Services year-on-year revenue growth on a pro forma basis was +29%.
The Payment business grew by +23% year-on-year. The Americas continue to post the largest growth, with revenue almost doubling compared to previous year on strong sales of EMV payment cards and issuance services in the United-States.
The Enterprise business revenue came in at EUR 113 million, with expansion from the addition of SafeNet and from the sustained market demand for cybersecurity, software protection and software monetization solutions. The trend in revenue mix in authentication and data encryption continues to move towards a higher proportion of software services.
The Government Programs business was up +32% compared to the third quarter of 2014. The revenue increase came mainly from delivery commencements of previously won projects, and EUR 9 million from the addition of Trub. Sales in the Middle East and Africa region, impacted by external events in the previous year, are back to growth. Revenue from the United States doubled compared to the same period in 2014.
The Mobile segment posted revenue of EUR 299 million, (17%) lower at constant rates compared to previous year.
Embedded software & Products revenue for the segment came in at EUR 243 million, (17%) lower compared to the third quarter of 2014. The SIM business, now representing 22% of the Company total revenue, reduced by (27%) this quarter, mainly due to the U.S. operators mobile payment service closing as earlier announced, coupled with lower demand in Latin America and Asia. Now that the mobile penetration rate in these regions is higher, the correlation between the economic environment and the SIM demand appears to be stronger. The Machine-to-Machine business continued to grow rapidly, by +20% year-on-year, due to 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 EUR 57 million, as Mobile Financial Services revenue decreased year-on-year due to lower mobile payment in the U.S., as announced earlier. This quarter, Gemalto announced a partnership with Samsung to accelerate the deployment of Samsung Pay in Europe. Samsung Pay will benefit from Gemalto's Trusted Service Hub, offering payment issuers a one stop connection, lifecycle management of payment credentials and tokenization services.
During the quarter, the GSMA (the world mobile operators association) adopted a common architecture for embedded SIM and remote provisioning management to address consumer devices. Gemalto demonstrated the GSMA defined architecture during the Mobile World Congress in Shanghai in partnerships with device manufacturers. The industry is now working on a detailed specification.
Patents & Others
Patents & Others revenue was EUR 1 million this quarter versus EUR 6 million during the same period in 2014.
- Debit Network Alliance selects Gemalto to guide EMV deployment strategy for U.S. debit card issuers
Gemalto has been selected by the Debit Network Alliance (DNA), a consortium of leading U.S. debit network providers, to deliver EMV consulting services. Gemalto's EMV Allynis Consulting Services are designed to accelerate the deployment of EMV, significantly reducing time between DNA's business plan and go-to-market. Gemalto's consultants recommended and executed a strategy that details card, terminal and personalization requirements.
- California selects Gemalto for automated identity document verification
Gemalto has successfully provided the nearly 200 California Department of Motor Vehicle (California DMV) field and investigative offices with its advanced Coesys Document Verification software solution. DMV officials can verify the authenticity of such documents as passports, identity cards and driver licenses by simply checking the graphical data and security features against reference templates from an array of issuing countries. This solution reduces the burden of manual updates on each authentication workstation located within the DMV field offices.
- Gemalto boosts connectivity for the Internet of Things with the industry-first M2M Cat 1 LTE module
Gemalto launched the industry's first LTE Category 1 (Cat 1) wireless module to revolutionize highly efficient 4G LTE connectivity specifically designed for Machine-to-Machine (M2M) and industrial Internet of Things (IoT) applications. This makes it an ideal solution for IoT applications such as metering, tracking and tracing, fleet management and mHealth that require the longevity and reliability of LTE in the decades ahead as 2G and 3G networks phase out.
- Gemalto Partners with Samsung for the launch of Samsung Pay in Europe with Innovative Security Solutions
Gemalto joins forces with Samsung to accelerate the deployment of Samsung Pay through Gemalto's Allynis Trusted Service Hub (TSH). Samsung Pay is a simple and secure mobile payment service that will provide wider acceptance with NFC (Near Field Communication) and MST (Magnetic Secure Transmission) working in most of merchant locations. Gemalto and Samsung are actively working with payment issuers to roll out Samsung Pay to Europe.
- Sprint extends relationship with Gemalto to manage growing LTE deployments across the U.S.
Gemalto broadens its longstanding relationship with Sprint through a multi-year contract to manage growing LTE deployments across the U.S. With 57.7 million subscribers, Sprint will use Gemalto's Allynis Advanced Over-the-Air (AOTA) Solution as a Service (SaaS) Platform to facilitate LTE service activations and to manage the complexities of providing multi band 4G LTE connectivity. The Gemalto solution helps Sprint easily deliver customers the most up-to-date mobile technologies, services and innovations right to their fingertips.
- Gemalto to provide solution for Samsung Gear S2 with 3G connectivity
Gemalto has provided the solution to Samsung Electronics for the launch of their latest Gear S2 smartwatch. Gemalto's solution will allow users to securely connect to the cellular networks. As a result, they will be able to make voice and data calls, check emails and notifications, or access applications, directly from their wrist, without being tethered to their smartphones.
For 2015, Gemalto anticipates another year of double digit growth in its profit from operations. In the second semester, the closure of the U.S. mobile payment service Softcard will limit the Mobile segment year-on-year progress in comparison to the same period of 2014. Accelerating pace in Payment, Machine-to-Machine, Enterprise and Government Programs will support the profit expansion of the Company towards its upgraded objective of over EUR 660 million in 2017.
Live Audio Webcast and Conference call
Gemalto third quarter 2015 revenue presentation will be webcast in English today at 3pm Amsterdam and Paris time (2pm London time and 10am 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) +44 207 107 1613 or (US) +1 855 402 7764 or (FR) +33 1 7077 0938
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.
The full year 2015 results will be reported on Friday March 4, 2016, before the opening of Euronext Paris.
Stock Exchange Listing
Gemalto N.V. is dual listed on NYSE Euronext Amsterdam and Paris, in the compartment A (Large Caps).
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.
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Gemalto (Euronext NL0000400653 GTO) is the world leader in digital security, with 2014 annual revenues of EUR 2.5 billion and blue-chip customers in over 180 countries.
Gemalto helps people trust one another in an increasingly connected digital world. Billions of people want better lifestyles, smarter living environments, and the freedom to communicate, shop, travel, bank, entertain and work - anytime, everywhere - in ways that are enjoyable and safe. In this fast moving mobile and digital environment, we enable companies and administrations to offer a wide range of trusted and convenient services by securing financial transactions, mobile services, public and private clouds, eHealthcare systems, access to eGovernment services, the Internet and internet-of-things and transport ticketing systems.
Gemalto's unique technology portfolio - from advanced cryptographic software embedded in a variety of familiar objects, to highly robust and scalable back-office platforms for authentication, encryption and digital credential management - is delivered by our world-class service teams. Our 14,000 employees operate out of 99 offices, 34 personalization and data centers, and 24 research and software development centers located in 46 countries.
For more information visit www.gemalto.com, www.justaskgemalto.com, blog.gemalto.com, or follow @gemalto on Twitter.
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