AMSTERDAM, Mar 10, 2015 - ( JCN Newswire ) - Gemalto, the world leader in digital security today announces its results for the full year 2014.
- Full year revenue of EUR 2.5 billion, up +5%, and profit from operations up +10%, at EUR 383 million
- Platforms & Services revenue passed the EUR 500 million mark - Strong demand in the United States, revenue up +32%
- For 2015, steady annual PFO expansion expected, towards the upgraded 2017 objective
Olivier Piou, Chief Executive Officer, commented: "2014 laid the foundation for our new multi-year development plan as highlighted by several key milestones within Gemalto and its markets. Strategic investments were made at the right time and under favorable conditions to reinforce two major growth drivers for the duration of the plan, EMV and cyber security. Regarding our other operations, numerous program wins increased our eGovernment backlog, we broadened our offers to address the device manufacturers and added tokenization capability to our various platforms. Our teams are in place to deliver accelerated revenue and profit growth in 2015, and with the acquisition of SafeNet we are upgrading our 2017 profit from operations objective to over EUR 660 million."
Total revenue came in at EUR 2,465 million, up by +5% at constant exchange rates and up by +3% at historical rates, with growth coming from both main segments, Mobile and Payment & Identity, and from both activities, Embedded software & Products and Platforms & Services. The strong year-on-year unfavorable foreign currency translation impact experienced in the first semester was partially offset in the second part of the year by the strengthening of the US Dollar against the Euro.
In Embedded software & Products, payment-related activities contributed the most to the growth, with further expansion in revenue from EMV payment cards. Demand for connectivity and security modules for the Internet of Things also notably contributed to the revenue increase. In contrast, eGovernment documents revenue reduced due to lower sales in the Middle-East. SIM sales returned to growth in the fourth quarter, and full year revenue was lower mainly due to slower demand in certain countries in Latin America and Eastern Europe. Overall revenue for the Embedded software & Products activity increased by +4% on 2013.
Platforms & Services grew by +10%, with expansion in both segments. Issuance and personalization services represented the largest part of the growth. Revenue increase also came from mobile subscriber management services as well as from mobile payment services though the year was marked by project delays linked to discussions around new technical specifications.
Gross profit was up by EUR 16 million, to EUR 952 million, representing a gross margin of 39%. In Mobile, gross margin reduced by 1.3 percentage points due to the lower sales of SIMs. In Payment & Identity, gross margin was higher by 0.5 percentage points due to the scale effects of the ongoing EMV migration.
Operating expenses represented EUR 569 million, down 3% on the previous year. The contraction came primarily from the lower cost of performance incentives, that were conditional in part on revenue objectives, and from tighter control of external costs implemented in the second part of the year.
Hedging absorbed a part of the adverse effect on the profit from operations coming from currency fluctuations against the Euro. When excluding the impact of hedge and currency variations, the year-on-year increase in profit from operations was EUR 54 million, higher by EUR 19 million than the EUR 35 million increase in profit from operations actually reported.
As a result, full year 2014 profit from operations came in at EUR 383 million, up by +10% compared to 2013. Profit from operations margin reached 15.5% of revenue, up by +1.0 percentage point compared to 2013. Both figures represent new record performances for the Company.
Gemalto financial income was (EUR 12) million compared to (EUR 7) million in 2013. Interest expenses increased due to the EUR 2 million interest charge incurred on the EUR 400 million bond issued during the third quarter of 2014.
Share of profit in associates was (EUR 1.0) million for the full year 2014. In 2013, there was an exceptional EUR 20 million non-recurring profit relating to associates generated by the recognition of a gain linked to capital restructuring and IPO of an associate. As a result, adjusted profit before income tax came in at EUR 370 million, compared to EUR 358 million the previous year.
Adjusted income tax expense increased to (EUR 54) million compared to (EUR 43) million the previous year, and consequently, the adjusted net profit for all the operations of the Company was EUR 315 million, stable when compared to last year's figure.
Adjusted basic earnings per share for all operations came in at EUR 3.64, and adjusted diluted earnings per share for all operations at EUR 3.55, compared to 2013 adjusted basic earnings per share for all operations of EUR 3.68 and adjusted diluted earnings per share for all operations of EUR 3.57.
Below is a highlight of new contracts and achievements published by the Company in 2014:
April 29, 2014 Gemalto powers secure access for SFR's "OTP cloud" services June 9, 2014 Flaircomm selects Gemalto to provide secure M2M solution for car manufacturers in China June 10, 2014 China Telecom selects Gemalto for its commercial launch of NFC services August 26, 2014 Gemalto selected by NTT DOCOMO for its NFC Services September 17, 2014 Gemalto's Cinterion M2M technology leverages the Sprint network September 25, 2014 China Mobile and Gemalto deploy NFC transport in Beijing October 29, 2014 Gemalto dramatically simplifies global rollout for Swiss connected watch December 16, 2014 Gemalto enables KDDI to offer secure high-definition audio services over LTE network
Payment & Identity February 05, 2014 Gemalto and United Nations Federal Credit Union Advance Payments Security with Faster EMV Global Payment Card Issuance March 11, 2014 Gemalto hosted TSM service strengthens mobile payment ecosystem in HK May 05, 2014 BankID deploys Gemalto's Valimo Mobile ID solution nationwide in Norway May 22, 2014 Gemalto selected for Algerian ePassport June 05, 2014 Gemalto's strong authentication solution expands HP's Helion offer for Cloud Service Providers October 1, 2014 Total company AS24 and Gemalto deploy EMV fuel payment cards October 9, 2014 CaixaBank gears up for wearables with Gemalto NFC payment technology in Spain October 28, 2014 The Netherlands selects Gemalto to introduce new electronic driving license October 31, 2014 Shazam chooses Gemalto's EMV consulting services to advance U.S. migration December 01, 2014 Norway goes with Gemalto Trusted Service for mobile NFC payment commercial rollout December 10, 2014 Quebec selects Gemalto's end-to-end solution for its secure driver's license program December 08, 2014 27 banks in Taiwan launch NFC services with Gemalto TSM Hub
January 14, 2014 Gemalto wins Pan-European Award of Excellence for enabling NFC Smart Cities February 25, 2014 Gemalto powered "Audi connect" LTE infotainment system wins 2014 Connected World Award May 15, 2014 Gemalto Receives Frost & Sullivan 2014 Award for Border Control and Biometrics July 24, 2014 Gemalto named market leader in Government and Healthcare by ABI research December 18, 2014 Gartner's Magic Quadrant positions Gemalto as a leader in user authentication
For 2015, Gemalto anticipates a steady expansion in annual profit from operations towards its upgraded 2017 objective of over EUR 660 million.
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