AMSTERDAM, Mar 6, 2014 - (ACN Newswire) - Gemalto (Euronext NL0000400653 - GTO), the world leader in digital security today announces its results for the full year 2013.
Key figures of the adjusted income statement
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Ongoing operations
(EUR in millions) Full year Full year Year-on-year variations
2013 2012 at historical at constant
exchange rates exchange rates
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Revenue 2,384 2,236 +7% +11%
Gross profit 937 862 +9%
Operating expenses (589) (557) +6%
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Profit from operations 348 305 +14%
Profit margin 14.6% 13.6% +1.0 ppt
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Olivier Piou, Chief Executive Officer, commented: "Gemalto closed its 2010-2013 development plan with EUR 348 million in profit from operations, surpassing the plan's profit expansion objective by close to 40%. Excellent operational performance with our customers and tight cost control offset the adverse currency effects. The growth drivers in our markets remain in place and we have good momentum entering our new 2014-2017 development plan, having laid the foundations for a steady progression toward our long-term objectives."
Basis of preparation of financial information
In this press release, the information for the full year of both 2013 and 2012 is presented for "Ongoing operations" and under the 2013 format of segment reporting unless otherwise specified.
Adjusted income statement and profit from operation (PFO) non-GAAP measure
The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS).
As required by IFRS 8 Operating segments, the Group reports the performance of its operating segments using the same metric that is internally reported to the Chief Operating Decision Maker for the purpose of making decisions about allocating resources to the segments and assessing their performance. This key metric used to evaluate the business and make operating decisions over the period 2010-2013 and 2014-2017 is the Profit from operations.
Profit from operations (PFO) is a non-GAAP measure defined as the IFRS operating result adjusted for the amortization and depreciation of intangibles resulting from acquisitions, for share-based compensation charges, and for restructuring and acquisition-related expenses. 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.
-- Share-based compensation charges are defined as (i) the discount granted to employees acquiring Gemalto shares under Gemalto Employee Stock Purchase plans; and (ii) the amortization of the fair value of restricted share units granted by the Board of Directors to employees, and the related costs.
-- 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).
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, Sales and Marketing, 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.
Appendix 2 bridges the adjusted income statement to the IFRS income statement.
Ongoing operations
For a better understanding of the current and future year-on-year evolution of the business, the Company provides an adjusted income statement for "ongoing operations" for both 2013 and 2012 reporting periods.
The adjusted income statement for ongoing operations excludes, as per the IFRS income statement, the contribution from discontinued operations to the income statement, and also the contribution from assets classified as held for sale and from other items not related to ongoing operations.
For the year 2013 and 2012, reported figures for ongoing operations only differ from figures for all operations by the contribution from non-strategic assets held for sale including the gain recognized upon sale of some of these assets.
Appendix 1 bridges the adjusted income statement for ongoing operations to the adjusted income statement for all operations.
Historical exchange rates and constant currency figures
Revenue variations are at constant exchange rates, except where otherwise noted.
All other figures in this press release are at historical exchange rates, except where otherwise noted.
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.
IFRS results
The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union. To better assess its past and future performance, the Company also prepares an adjusted income statement. Appendix 2 provides the reconciliation between IFRS and adjusted income statements.
The IFRS operating profit (EBIT) for the Company for the full year 2013 was EUR 282 million, up by +18% compared to EUR 239 million recorded in the previous year.
Restructuring and acquisition-related expenses fell to EUR 3 million versus EUR 8 million for 2012. Amortization and depreciation of intangibles resulting from acquisitions increased to EUR 27 million from EUR 21 million due to the full year impact of acquisitions closed in the latter part of 2012. Equity-based compensation charges for 2013 reduced to EUR 35 million from the EUR 39 million incurred in 2012.
Profit for the period in 2013 was EUR 258 million, up by +29% compared to EUR 201 million in 2012. Of the EUR 57 million incremental profit, EUR 20 million relates to a non-recurring contribution mostly generated by the recognition of a gain linked to the capital restructuring and initial public offering in Hong Kong of a minority affiliate. Excluding the effect of this contribution, profit for the period increased by +19% on 2012.
As a result, basic earnings per share were EUR 3.01 and diluted earnings per share were EUR 2.92 in 2013 compared to EUR 2.41 and EUR 2.31 in 2012, increases of +25% and +26% respectively.
Adjusted financial information for all operations
In this section, financial information is presented for all operations. In comparison to the adjusted income statement for ongoing operations, the adjusted income statement for all operations also includes:
-- for 2012, the contribution from non-strategic assets and from the assets that were contributed to the joint venture Trustonic Ltd, in November 30, 2012.
-- for 2013 the contribution from non-strategic assets, that were disposed of in June 2013.
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Full year 2013 Full year 2012
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Extract of the adjusted
income statement for
all operations
EUR in As a % of EUR in As a % of Year-on-year Year-on-year
millions revenue millions revenue variation at variation at
historical constant
exchange rates exchange rates
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Revenue
2,388.6 2,245.5 +6% +10%
Gross profit
936.2 39.2% 864.4 38.5% +0.7 ppt
Operating expenses
(588.8) (24.7%) (558.1) (24.9%) +0.2 ppt
EBITDA
434.8 18.2% 381.3 17.0% +1.2 ppt
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Profit from operations
347.4 14.5% 306.3 13.6% +0.9 ppt
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Net profit
315.5 13.2% 261.6 11.7% +1.6 ppt
Basic Earnings per share (EUR)
3.68 3.14 +17%
Diluted Earnings per share (EUR)
3.57 3.00 +19%
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Revenue for all operations of the company reached EUR 2.39 billion, up by +10% at constant exchange rates and by +6% at historical rates. All business segments contributed positively to growth with an especially strong improvement in Secure Transactions, which represented half of the yearly revenue increase. All regions increased their revenue, with a particularly strong performance in the Americas and Asia. Since the beginning of the 2010-2013 long-term development plan, revenue for all operations of the Company increased by EUR 735 million (EUR 1,654 in 2009), or +44%.
Across all segments, Platforms & Services activities grew by +21%, to account for revenue of EUR 462 million in 2013, generating 36% of the total Company growth and further increasing their share of the Company's revenue. Contributions from both the Mobile sector (subscriber services, trust infrastructure) and Payment & Identity sector (payment platforms, government projects, and authentication services) were similar in proportion.
Gross profit for the Company was up +8%, or EUR 72 million to EUR 936 million, expanding in all segments. This represents a gross margin of 39.2%, higher by +0.7 percentage points compared to 2012. This gross margin improvement came from a better product mix in the Mobile Communication and Machine-to-Machine segments. Improvement in these two segments more than offset both the temporary impact of startup costs for new operations for Secure Transactions and Security that occurred during the first semester and the additional resources expended by Gemalto service delivery teams on the high contract backlog in Platforms & Services.
The increase in operating expenses was +5% with the year-on-year expansion occurring during the first semester. As anticipated, the step-up in investments in operations put in place in the second half of 2012 caused the strong semester-on-semester profit seasonality observed in 2013.
Other income was a charge of (EUR 2) million in 2013 compared to a positive non-recurring contribution of +EUR 9 million in 2012, hence slightly reducing the year-on-year expansion in profit from operations, which came in at EUR 347 million, up +13% on the previous year. All segments contributed significantly to the profit increase, except Security that incurred additional costs in 2013 related to major capacity upgrades. Profit margin from operations for all operations of the Company hence reached 14.5% of revenue, adding +0.9 percentage points on 2012's figure and delivering progress in line with the expected annual gains needed to reach the new long-term objective of EUR 600 million profit from operations in 2017.
Financial income was a charge of EUR 7 million for the year. Net interest income was a charge of EUR 1 million and the foreign exchange transactions and hedging instruments re-evaluation at year-end generated a charge of EUR 11 million. Remaining income mainly came from cumulative translation adjustments recorded upon the sale or liquidation of held-for-sale non-strategic entities.
Share of profit of associates came in at EUR 18 million essentially due to a non-recurring profit relating to associates, mostly generated by the recognition of a gain linked to capital restructuring and IPO of a minority affiliate.
Consequently, adjusted profit before income tax increased by +21%, to EUR 358 million.
Income tax expense was EUR 43 million, resulting in an effective tax rate stable compared to last year and lower than anticipated as a result of the one-off recognition in 2013 of additional deferred tax assets and of a tax credit related to 2012 activities.
As a result, adjusted net profit of the Company for all operations was EUR 315 million in 2013, a +21% increase when compared to EUR 262 million in 2012, and the adjusted net profit margin increased to 13.2%.
Basic adjusted earnings per share for all operations came in at EUR 3.68, up +17%, and fully diluted adjusted earnings per share for all operations settled at EUR 3.57, up +19%.
Statement of financial position and cash position variation schedule
For the full year 2013, Gemalto generated a cash flow from operating activities before changes in working capital of EUR 332 million compared to EUR 311 million in 2012. Changes in working capital decreased cash flow by (EUR 76) million compared to (EUR 18) million in 2012. The change, which entirely occurred during the first semester, is primarily due to the longer cash collection cycle associated with specific businesses in Asia.
Capital expenditures and acquisition of intangibles amounted to EUR 103 million, or 4.3% of revenue and down from last year's figure of EUR 125 million. Purchases of property, plant, and equipment represented EUR 62 million, versus EUR 68 million in 2012, as investments were made in personalization centers and other facilities to support future growth in the Payment & Identity sector. Capitalized development costs decreased in 2013 to EUR 27 million from EUR 36 million in 2012. Total acquisition and capitalization of intangible assets amounted to EUR 41 million, or 1.7% of sales, down from EUR 57 million in 2012.
Due to the strong variation in working capital observed for the first part of the year, cash conversion demonstrated significant seasonality in 2013, with a positive free cash flow for the full year 2013 of +EUR 152 million composed of a free cash inflow for the second semester of +EUR 163 million and a (EUR 12) million outflow for the first semester relating to rapidly growing businesses in Asia.
Net cash flow from financial income elements was EUR 1 million, corresponding to interest received net. The net impact from investing activities related to acquisitions was EUR 30 million in 2013 down from EUR 73 million in 2012. This consideration corresponds to cash payments made for business combinations completed during the year.
Gemalto's share buy-back program used EUR 23 million in cash in 2013 for the purchase of 336,163 shares, net of the liquidity program. As at December 31, 2013, the Company held 1,743,212 of its own shares in treasury, representing 1.98% of its issued and paid up share capital. The total number of shares issued and paid up remained unchanged during 2013 compared to the end of 2012 at 88,015,844 shares. Net of the 1,743,212 shares held in treasury, 86,272,632 shares were outstanding as at December 31, 2013. The average acquisition price of the shares repurchased on the market as part of the Company's buy-back program and held in treasury as at December 31, 2013 was EUR 50.46.
On May 31, 2013, Gemalto paid a cash dividend of EUR 0.34 per share in respect to the fiscal year 2012. This distribution used EUR 29 million in cash compared to EUR 26 million distributed in 2012, an increase of +13%. Other financing activities generated EUR 19 million, including EUR 32 million received from employees from the exercise of share options and EUR 11 million remitted for the repayment of borrowings.
Consequently, Gemalto's cash and cash equivalents as at December 31, 2013 were EUR 456 million. Current and non-current borrowings reduced to EUR 7 million from EUR 10 million in 2012, resulting in a net cash position of EUR 449 million, an increase of +EUR 97 million when compared to December 31, 2012.
For the year 2013, plant, property and equipment assets net book value was stable compared to 2012, at EUR 237 million. Total assets grew by +8% or +EUR 204 million to EUR 2,919 million as at December 31, 2013, compared to EUR 2,715 million as at December 31, 2012, due to the increase of current assets, balanced between trade receivables and cash in relation to the Companys increased business activities.
Shareholders' equity increased by +11%, or +EUR 221 million, to EUR 2,153 million as at December 31, 2013 compared to EUR 1,932 million as at December 31, 2012. The increase was mainly the result of the positive net profit generation, partly offset by the 2012 dividend distribution.
Segment information
In this section, for a better understanding of Gemalto's business evolution, comments and comparisons refer to ongoing operations. Revenue variations are expressed at constant currency exchange rates unless otherwise noted.
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Full year 2013
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Revenue contributions by sector
(EUR in millions, ongoing operations)
Mobile[1] Payment[2] Total
& Identity four main segments
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Revenue 1,292 1,076 2,368
As a percentage of total revenue
54% 45% 99%
Year-on-year variations
at constant exchange rates +5% +16% +10%
As a percentage of total revenue growth
at constant exchange rates 28% 66% 94%
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Full year 2013
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Revenue contributions by activity
(EUR in millions, ongoing operations)
Embedded software Platforms Total
& Products & Services four main segments
Revenue 1,905 462 2,368
As a percentage of total revenue
80% 19% 99%
Year-on-year variations
at constant exchange rates +8% +21% +10%
As a percentage of total revenue growth
at constant exchange rates 59% 35% 94%
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In 2013, revenue for ongoing operations, including the four main segments and the Patents activity, came in at EUR 2,384 million, growing +11% on the previous year at constant exchange rates. The Mobile sector grew by +5% and contributed to 28% of total Company growth. The Payment & Identity sector, backed by the outstanding performance in Secure Transactions, generated 66% of total Company growth.
Business development across activities showed a strong performance in Embedded software & Products compared to the expected trend of the new multi-year development plan, with +8% in 2013 - slightly above the mid-single digit compound annual growth rate (CAGR) expected for the new plan - and a very solid performance in Platforms & Services, with +21% in 2013, in line with the low twenties CAGR anticipated in the new plan.
From a geographical perspective, the Americas and Asia-Pacific surpassed Europe-Middle-East-Africa in terms of absolute contribution to total growth, accounting for 46%, 34% and 20% of total Company revenue expansion respectively. The United States of America was the largest revenue generating country, with EUR 361 million, or 15% of Gemalto's total revenue, up from EUR 270 million and 12% of total Company revenue in 2012.
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Year-on-year variations and currencies impact
(EUR in millions)
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A B C D E F G
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Fourth quarter
Revenue 300 55 188 116 658 1 659
at constant rates (4%) +6% +27% +13% +7% n.m. +7%
at historical rates
(9%) +2% +21% +9% +2% n.m. +2%
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Second semester
Revenue 586 104 349 214 1,254 1 1,255
at constant rates +2% +7% +23% +9% +9% n.m. +9%
at historical rates
(4%) +2% +16% +5% +3% n.m. +3%
Profit from operations
135 14 48 24 220 (3) 217
at historical rates
+9% +46% +34% (9%) +13% n.m. +14%
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Full year
Revenue 1,091 200 660 416 2,368 16 2,384
at constant rates +5% +7% +20% +11% +10% n.m. +11%
at historical rates
+0% +4% +16% +8% +6% n.m. +7%
Profit from operations
205 22 77 41 345 3 348
at historical rates
+6% +57% +23% (9%) +10% n.m. +14%
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A. Mobile Communication
B. Machine-to-Machine
C. Secure Transactions
D. Security
E. Total four main segments
F. Patents
G. Total ongoing operations
In 2013, variations in major currency exchange rates against the Euro created a meaningful adverse translation effect, lowering recorded revenue figures for the full year by (4) percentage points. Most impactful currency variations, in terms of absolute value impact to the Company, were recorded on the US Dollar, Japanese Yen, and Brazilian Real. Growth at constant exchange rates was +11% and +7% at historical exchange rates. This negative impact was particularly important in the second part of the year, as revenue variations observed at historical exchange rates were (6) percentage points lower than variations at constant exchange rates in the second semester.
Profit from operations came in at EUR 348 million, up +14% on the previous year. Since the beginning of the 2010-2013 long-term development plan, profit from operations increased by +EUR 178 million, 37% more than the EUR 130 million increase initially targeted to reach the Company's EUR 300 million objective in 2013. Cash-flow hedging progressively put in place during the plan mitigated a large part of the adverse impact of currencies variations on profit from operations, reducing the negative impact recorded for the full year 2013 to (EUR 8) million.
Over the fourth quarter of 2013, total revenue increased by +7% at constant exchange rates. Year-on-year variations showed different evolutions among segments. In particular, Secure Transactions recorded an outstanding +27% growth, capturing substantial business in Asia, and Mobile Communication's revenue for the fourth quarter was adversely affected by a negative one-off (EUR 8) million net impact from the change in revenue recognition in its Netsize/IPX consolidated entities. In the second semester, all segments contributed to the +9% revenue expansion at constant exchange rates. And for the full year, all segments grew at rates between mid single-digit and low-twenty percent at constant exchange rates.
Mobile Communication
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Full year 2013 Full year 2012 Year-on-year variation
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EUR in As a % of EUR in As a % of at historical at constant
millions revenue millions revenue exchange rates exchange rates
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Revenue
1,091.3 1,089.6 +0% +5%
Gross profit
496.6 45.5% 471.0 43.2% +2.3 ppt
Operating expenses
(291.1) (26.7%) (277.7) (25.5%) (1.2 ppt)
Profit from operations
205.5 18.8% 193.3 17.7% +1.1 ppt
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Mobile Communication recorded annual revenue of EUR 1.09 billion, up +5% at constant exchange rates, posting another solid performance on top of the +10% year-on-year expansion recorded the previous year. Both Embedded software & Products and Platforms & Services activities contributed to revenue growth.
In Embedded software & Products (E&P), deployment of LTE and multi-tenant secure elements drove mix improvement. Revenue grew by +1% after the +6% increase recorded in 2012. The revenue decrease in entry-range Qipso prepaid 2G products lowered the growth of this E&P activity by 3 percentage points, as the Company intentionally limited its market presence in this segment particularly affected by a strong market contraction in India. At the other end of the product portfolio, the increasing penetration of LTE networks and the roll-outs of multi-tenant SIM cards designed to secure third-party mobile services drove a strong sales increase of the Company's UpTeq high-end products.
Platforms & Services (P&S) grew by +19% year-on-year on the back of the continuing deployment of LTE subscription management platforms, trust infrastructure, and other remote management services. In the fourth quarter, a lower growth in this activity was observed, resulting from a change in the revenue accounting methodology in the Netsize/IPX consolidated entity, which reduced Platforms & Services and the total segment revenue by (EUR 8) million net. Activity remained intense throughout the entire year with the ongoing deployment phase of secure mobile services and the number of signed contracts covering Trusted Service Management services and Gemalto Mobile Payment Platforms increased faster than the number of contracts delivered, maintaining a solid delivery pipeline.
Gross margin improved by +2.3 percentage points to 46%, supported by the improved product mix and despite the extensive system integration work engaged in the P&S activity to deploy large-scale high-availability service platforms.
Operating expenses, higher by +5% on the previous year, accounted for 27% of the revenue, a figure up by +1.2 percentage points on the previous year, now including the year-on-year impact of investments made in the second part of 2012 to accompany the strong expansion in the Platforms & Services activity.
As a result of the above, the segment's profit from operations rose by +EUR 12 million to EUR 205 million, up by +6% and accounting for 19% of the segment's revenue.
Machine-to-Machine
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Full year 2013 Full year 2012 Year-on-year variation
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EUR in As a % of EUR in As a % of at historical at constant
millions revenue millions revenue exchange rates exchange rates
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Revenue
200.3 192.2 +4% +7%
Gross profit
72.0 36.0% 63.8 33.2% +2.8 ppt
Operating expenses
(50.1) (25.0%) (49.8) (25.9%) +0.9 ppt
Profit from operations
22.0 11.0% 14.0 7.3% +3.7 ppt
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Machine-to-Machine posted revenue of EUR 200 million, an increase of +7% compared to the previous year, evidencing a solid performance since the global industrial sectors' growth was limited. The automotive sector, a wider usage of secure elements dedicated to machine identification, and new service contracts drove the annual sales increase.
The segment's gross profit was up by +13%, due to the increase in sales and a temporary uplift in gross margin of +2.8 percentage points.
Operating expenses remained under tight control and internal efficiency improved through a better alignment of resources on targeted end-markets.
Consequently, profit from operations rose sharply to EUR 22 million, up +57% on the previous year, to account for 11% of the segment's revenue.
Secure Transactions
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Full year 2013 Full year 2012 Year-on-year variation
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EUR in As a % of EUR in As a % of at historical at constant
millions revenue millions revenue exchange rates exchange rates
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Revenue
659.8 568.0 +16% +20%
Gross profit
206.2 31.2% 183.2 32.3% (1.0 ppt)
Operating expenses
(129.6) (19.6%) (120.9) (21.3%) +1.6 ppt
Profit from operations
76.6 11.6% 62.4 11.0% +0.6 ppt
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Secure Transactions posted revenue of EUR 660 million, expanding by a remarkable +20% at constant exchange rates in comparison to 2012. The segment's growth was driven by the increasing adoption of dual interface payment cards - adding the benefit of NFC contactless tap-and-pay to the traditional chip-based secure payment card experience - and by the accelerating migration to EMV in Asian countries. The multiple ongoing initiatives at financial institutions and retailers for mobile payment also contributed to the expansion of the segment's Platforms & Services activities revenue to EUR 122 million, up by +9%.
Gross profit increased by +13%, to EUR 206 million representing a gross margin of 31%. Improvement over the course of the year in operational efficiency of new facilities built to support high growth regions offset the increasing integration work related to mobile payment projects. This led to a slight increase in gross margin year-on-year in the second semester after a lower performance in the first semester.
Operating expenses increased by +7% in value to support expanding operations, and reduced by (2) percentage points in proportion to sales to represent 20% of revenue.
Significant gross profit expansion and controlled development of the segment's operating costs led to further profit margin improvement, which reached 12% of sales, and increased profit from operations to EUR 77 million, up by +23% versus 2012.
Security
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Full year 2013 Full year 2012 Year-on-year variation
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EUR in As a % of EUR in As a % of at historical at constant
millions revenue millions revenue exchange rates exchange rates
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Revenue
416.1 384.0 +8% +11%
Gross profit
147.7 35.5% 142.4 37.1% (1.6 ppt)
Operating expenses
(106.7) (25.6%) (97.2) (25.3%) (0.3 ppt)
Profit from operations
40.9 9.8% 45.2 11.8% (1.9 ppt)
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Security recorded +11% growth at constant exchange rates on top of the +19% growth delivered the previous year, to reach EUR 416 million. Both Government Programs and Identity & Access Management posted double-digit expansions in sales.
Across the segment, Platforms & Services revenue rose by +42% to EUR 93 million, representing 22% of total segment revenue, driven by the delivery of larger global projects to governments and by the growing sales of strong authentication servers to enterprises and banking institutions.
In Government Programs, business activities developed well, with multiple global projects related to border management and integration of electronic identity into governmental services. Passports, national IDs and driving licenses further supported the increase in sales.
Identity & Access Management continued to expand with organizations that realize how critical cloud security and network users' identification has become to their business and reputation. The investment made towards reinforcing Gemalto's portfolio of strong authentication solutions for on-premise and outsourced cloud infrastructures led to a particularly strong growth in Platforms & Services, complementing the expansion in authentication products for online banking security.
Gross profit increased to EUR 148 million, up +4%. As planned, operational performance steadily improved throughout the year in newly opened facilities to support growth in Government Programs and in the second semester, gross margin returned to about the same level as the previous year.
In order to accompany the segment growth, investments in operations were sustained. The increase in operating expenses was slightly higher in the second semester compared to 2012 since the second semester of 2012 benefited from a EUR 2 million gain in Other income. Operating expenses grew this year essentially in line with sales, adding +10% to 2012 figures.
As a result of these investments, profit from operations was EUR 41 million for the full year 2013 compared to EUR 45 million in 2012, and represented 10% of the segment's revenue.
Patents
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Full year 2013 Full year 2012 Year-on-year variation
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EUR in As a % of EUR in As a % of at historical at constant
millions revenue millions revenue exchange rates exchange rates
----------------------------------------------------------------------
Revenue
16.3 2.1 n.m. n.m.
Gross profit
14.6 89.5% 1.8 85.7% +3.8 ppt
Operating expenses
(11.5) (70.5%) (11.6) n.m. n.m.
Profit from operations
3.1 19.0% (9.8) n.m. n.m.
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As anticipated, the Company did not record any significant revenue in its Patents activity in the second semester of 2013. For the full year 2013, patent revenue came in at EUR 16 million, up by EUR 14 million compared to 2012 due to the renewal of a set of licensing agreements signed in the second quarter.
Operating expenses were essentially flat year-on-year resulting in a profit from operations of EUR 3.1 million, compared to a loss of EUR 9.8 million in 2012.
The appeals process of the ongoing litigation initiated by the Company in the United States is expected to wind down in the first semester of 2014.
Additional information
-- On September 5, 2013, Gemalto announced its new multi-year development plan. The Company set for itself the objective of achieving EUR 600 million in Profit from operations by 2017, essentially doubling its 2012 full year performance, on the back of double-digit revenue CAGR expansion, at constant exchange rate, balanced growth between its "Embedded software & Products" and its "Platforms & Services" activities, and operational leverage. Revenue from Platforms & Services is set to grow at more than 20% CAGR at constant exchange rate over the period, to reach EUR 1 billion by 2017, contributing significantly to the global increase in the company profit and representing about half of the expected total revenue growth achieved over the duration of the plan.
This development is based on ten different well-identified opportunities spread across business activities that will serve as growth pillars and there were several related key contracts and developments in 2013 which are expected to contribute to the achievement of the new plan.
-- Below is a selection of new contracts and achievements published by the Company in 2013
Mobile sector
Mobile secure clients and core subscriber services
-- February 26, 2013 China Unicom selects Gemalto in China's first NFC payment service
-- March 7, 2013 TELUS selects Gemalto SIM to enable secure NFC mobile payments
-- September 19, 2013 US Operator Nex-Tech Wireless selects Gemalto's complete LTE solution
-- October 14, 2013 Gemalto enables commercial Mobile NFC transport and Payment roll-out in Hong Kong
Trust Infrastructure
-- February 26, 2013 KDDI using Gemalto TSM in the world's first commercial NFC-based flight boarding service for Japan
-- October 18, 2013 Rio de Janeiro launches pilot for public transportation NFC ticketing with smartphones
-- November 19, 2013 Norway's largest bank DNB and mobile operator Telenor select Gemalto for NFC payment service
Machine-to-Machine
-- February 21, 2013 Gemalto enables Audi's industry-first embedded 4G LTE infotainment system
-- September 24, 2013 Gemalto, Oracle and V2COM collaborate to deliver M2M technology for Smart Grid in Latin America
Payment & Identity sector
Payment
-- April 17, 2013 MCX selects Gemalto for Mobile Commerce Platform
-- April 29, 2013 Barclaycard Germany signs multi-year contract for debit and credit cards with Gemalto
-- June 20, 2013 Gemalto enables EMV payment for Telefnica-MasterCard joint venture in Brazil
-- November 20, 2013 UniCredit Bank selects Gemalto for mobile payment in Russia
Identity for citizens
-- April 8, 2013 Gemalto selected as prime contractor to implement a complete visa and border management system in Ghana
-- June 5, 2013 South Africa selects Gemalto for its national electronic identity card program
-- September 3, 2013 Gemalto automatic border management solution live at Oslo Airport
-- October 1, 2013 Gemalto selected for Belgian ePassport
Identity for enterprises and cloud services security
-- April 3, 2013 Gemalto recognized in Gartner's Magic Quadrant for User Authentication
-- September 5, 2013 Gemalto launches strong authentication for cloud service providers
-- November 20, 2013 Gemalto and IBM to offer enhanced eBanking security platform
Proposed dividend
The Board of Gemalto has decided to propose to the 2014 Annual General Meeting of Shareholders the payment of a cash dividend of EUR 0.38 per share in 2014 in relation with the 2013 financial year, a 12% increase compared to the cash dividend of EUR 0.34 per share paid in 2013 in relation with the 2012 financial year. If approved, the time schedule related to the dividend payment will be as follows:
May 23, 2014 Ex-dividend date
(the date as of which shares are traded
without the right to the 2014 dividend)
May 27, 2014 Dividend record date
(the date on which shareholder positions are recorded
as per close of business in order to be entitled
to the 2014 dividend distribution)
May 28, 2014 Payment date of dividend
Gemalto shares will trade ex-dividend as from the beginning of the trading session on May 23, 2014. Holders of Gemalto shares on May 23, 2014 who would not have previously sold their shares will be able to freely trade their shares on the stock exchange as from such date and will not need to block their shares until the payment date of the dividend to benefit from such dividend.
Outlook
For the full year 2014, Gemalto anticipates double-digit expansion in both profit from operations and revenue at constant exchange rates.
Live Audio Webcast and Conference call
Gemalto full year 2013 results 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 9454 or (US) +1 855 402 7762 or (FR) +33 1 7077 0934
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.
Reporting calendar
The annual report, including the financial statements as of December 31, 2013, is available on our Investor web site (www.gemalto.com/investors).
Financial reporting for the three first quarters of 2014 will be made before the opening of Euronext Amsterdam on the following dates:
April 24, 2014 Publication of 2014 first quarter revenue
August 28, 2014 Publication of 2014 first semester results
October 23, 2014 Publication of 2014 third quarter revenue
Gemalto N.V. will hold its 2014 Annual General Meeting of Shareholders (AGM) on Wednesday, May 21, 2014. The persons entitled to attend and cast votes at the AGM will be those who are recorded as having such rights after the close of trading on the relevant NYSE Euronext stock exchange on April 23, 2014 (the "Record Date") in Gemalto's shareholders register, or in a register of a financial institution affiliated to Euroclear France S.A., regardless of whether they are shareholders at the time of the AGM.
The Annual General Meeting of Shareholders will be held at the Sheraton Amsterdam Airport Hotel & Conference Center, Schiphol Boulevard 101, 1118 BG Schiphol Airport, the Netherlands at 2:00 p.m. CET.
Stock Exchange Listing
Gemalto N.V. is dual listed on NYSE Euronext Amsterdam and Paris, in the compartment A (Large Caps).
Mnemonic GTO
Exchange Dual listing on NYSE Euronext
Amsterdam and Paris
Market of reference NYSE 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
Gabriel Rangoni
M.: +33 6 1426 6956
gabriel.rangoni@gemalto.com
John Lineberger
M.:+33 6 1243 6304
john.lineberger@gemalto.com
Corporate Communication
Isabelle Marand
M.: +33 6 1489 1817
isabelle.marand@gemalto.com
Media Relations Agency
Suzanne Bakker
M. : +31 6 1136 8659
suzanne.bakker@citigateff.nl
Edi Cohen
M. : +31 6 2151 7820
edi.cohen@citigateff.nl
About Gemalto
Gemalto (Euronext NL0000400653 GTO) is the world leader in digital security with 2013 annual revenues of 2.4 billion and more than 12,000 employees operating out of 85 offices and 25 research and software development centers, located in 44 countries.
We are at the heart of the rapidly evolving digital society. Billions of people worldwide increasingly want the freedom to communicate, travel, shop, bank, entertain and work - anytime, everywhere - in ways that are enjoyable and safe. Gemalto delivers on their expanding needs for personal mobile services, payment security, authenticated cloud access, identity and privacy protection, eHealthcare and eGovernment efficiency, convenient ticketing and dependable machine-to-machine (M2M) applications. We develop secure embedded software and secure products which we design and personalize. Our platforms and services manage these products, the confidential data they contain and the trusted end-user services made possible.
Our innovations enable our clients to offer trusted and convenient digital services to billions of individuals. Gemalto thrives with the growing number of people using its solutions to interact with the digital and wireless world.
For more information visit www.gemalto.com, www.justaskgemalto.com, blog.gemalto.com, or follow @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.
[1] "Mobile" includes the Mobile Communication and Machine-to-Machine segments
[2] "Payment & Identity" includes the Secure Transactions and Security segments
Press Release (PDF): http://hugin.info/159293/R/1766726/600028.pdf
This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Gemalto via Globenewswire
Topic: Earnings
Source: Gemalto NV
Sectors: Daily Finance, Cloud & Enterprise, CyberSecurity, IT Individual
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