Gemplus Reports Strong Improvement in Results for Fiscal Year 2005
Luxembourg (ots/PRNewswire)
Full year 2005 highlights:
- Revenue increased by 8.5% to 939 million euros: growth sustained in all core businesses.
- Operating income at 67 million euros: a 2.5 fold increase, driven by good overall Company performance.
- Very strong net income1, at 90 million euros.
- Robust free cash flow, at 85 million euros, excluding non-recurring items.
Fourth quarter 2005 highlights:
- Operating margin at 6.0%, despite impact related to a quality issue with a specific chip.
- Strong net income1, at 40 million euros, boosted by recognition of deferred tax assets of 25.6 million euros.
Gemplus International S.A. (Euronext: LU0121706294 - GEM and NASDAQ: GEMP), the world's leading provider of smart card solutions, today reported results for the fourth quarter and full year ended December 31, 2005.
In millions of Q4 Q4 2004 Year-on-year FY FY Year-on-year
euros 2005 change 2005 2004 change
Net sales 261.7 242.5 +7.9% 938.9 865.0 +8.5%
Adjusted for currency -1.5% +3.6%
fluctuations, discontinued
operations and acquisitions
Gross profit 85.2 77.3 +10.3% 309.9 270.5 +14.6%
Gross margin as a 32.6% 31.9% +0.7 ppt 33.0% 31.3% +1.7 ppt
% of sales
Operating income 15.6 16.1 -3.0% 66.8 26.3 +153.7%
Operating margin 6.0% 6.6% -0.6 ppt 7.1% 3.0% +4.1 ppts
Net income[1] 40.0 11.8 +239% 89.9 4.7 NM
Free cash flow 21.5 11.3 +90% 85.3 58.8 +45%
excluding non
recurring items
Free cash flow[2] 19.6 1.7 NM 95.7 5.5 NM
Cash and cash 418.4 388.4 +7.7% 418.4 388.4 +7.7%
equivalents
Per share data (in euros)
Earnings per 0.06 0.02 +224% 0.14 0.01 NM
share (fully
diluted)Commenting on the performance for the fiscal year 2005, Alex Mandl, President and Chief Executive Officer, said: "2005 was another year of substantial achievements for Gemplus: we reinforced the Group's leadership, notably in high-end wireless and financial services, and strongly improved our financial performance, especially in terms of margin and cash flow. At the same time, we undertook two very important strategic moves: the Setec acquisition, which strengthens our position in the Government ID space, and the proposed Gemalto merger which will create a world-class leader in digital security. We feel very excited about this project which will take the Company to new horizons."
Full Year 2005 financial review
Highlights:
- Revenue up 8.5%: growth sustained in all core businesses.
- Operating income at 67 million euros: a 2.5 fold increase, driven by good overall Company performance:
- Gross margin up 1.7 percentage points.
- Operating expenses flat.
- Very strong net income1, at 90 million euros.
- Robust free cash flow, at 85 million euros, excluding non-recurring items.
In millions of euros FY 2005 FY 2004 Year-on-year Adjusted
change change[3]
Group revenue 938.9 865.0 +8.5% +3.6%
Telecom 654.5 641.8 +2.0% +0.5%
of which Wireless products & 600.4 558.5 +7.5% NA
services
of which Prepaid phone cards & 54.1 83.3 -35.1% NA
scratchcards
Financial Services 202.9 182.2 +11.3% +4.9%
ID and Security 81.5 41.0 +98.7% +46.6%On a segment and geographical basis for the full year:
- Telecom revenue was driven by Wireless. Wireless revenue was up 7.5% (up 7.2% currency adjusted), to 600.4 million euros, confirming the Group's leading position in this sub-segment. Wireless card shipments rose 34% to 342 million units, due to strong growth in EMEA[4] and the Americas. The Group's focus on value creation drove a substantial shift toward high-end cards, now considered only 3G and above, with their share increasing from 6.0% in 2004 of total shipments to 10% in 2005. The share of 64Kb, 128Kb, 3G cards and above rose from 34% in 2004 to 47% in 2005. The average selling price declined 20%, currency adjusted.
- Financial Services revenue was driven by the EMV migration, with substantial rollouts in many European countries and ramp-up in Latin America and Japan. Gemplus shipped 70 million payment microprocessor cards (up 36%), with revenue up 25%.
- ID and Security revenue was driven by the Setec acquisition, Government ID projects, particularly, in the Middle East, and Corporate Security projects, notably in the Americas.
- On a geographical basis, revenue from the Americas was up 21.0%, currency and acquisition adjusted, driven by Wireless. The EMEA4 region was up 1.8%, led by Financial Services. Asia was down 12.5% reflecting Wireless price pressure.
In millions of euros FY 2005 As a % of FY 2004 As a %
revenue of
revenue
Group gross profit 309.9 33.0% 270.5 31.3%
Telecom 241.5 36.9% 220.8 34.4%
of which Wireless products & services 236.6 39.4% 215.6 38.6%
of which Prepaid phone cards & 4.9 9.1% 5.2 6.2%
scratchcards
Financial Services 41.9 20.6% 37.7 20.7%
ID and Security 26.5 32.5% 12.0 29.4%Gross margin increased by 1.7 percentage points, mainly driven by a favourable business mix as well as improvement in Telecom and ID & Security.
In millions of euros FY 2005 As a % of FY 2004 As a %
revenue of
revenue
Operating expenses 243.2 25.9% 244.2 28.2%
Operating income 66.8 7.1% 26.3 3.0%
Financial income & expenses 7.7 5.7
Share of profit (loss) of associates -0.5 -6.0
Other non operating income (expenses), -2.3 -6.8
net
Income tax 19.8 -13.0
Minority interests -1.5 -1.6
Net income1 89.9 4.7Operating expenses were stable, despite the overall growth in the business and the Setec acquisition. Operating expenses represented 25.9% of sales, compared to 28.2% the previous year, reflecting good cost control and a reduction in restructuring expenses. Consequently, operating income rose substantially, to 66.8 million euros, taking the operating margin to 7.1%.
Income tax reflects the recognition of deferred tax assets of 26.9 million euros. This contributed to the Company reporting net income1 of 89.9 million euros, an increase of 85.2 million euros over last year, mainly due to improved operating income.
The Company generated free cash flow of 85.3 million euros, up 45% compared with last year, excluding non-recurring items. Net cash flow was 30 million euros, which included the cash outlay of 63 million euros related to the Setec acquisition.
Fourth quarter 2005 financial review
- Income statement
Fourth quarter 2005 highlights:
- Revenue up 7.9% year-on-year (down 1.5% adjusted3).
- Operating margin at 6.0%, despite impact related to a quality issue with a specific chip.
- Strong net income1, at 40.0 million euros, boosted by recognition of deferred tax assets of 25.6 million euros.
In millions of euros Q4 2005 Q4 2004 % change Adjusted(3)
change (%)
Net sales 261.7 242.5 +7.9% -1.5%
Gross profit 85.2 77.3 +10.3%
Gross margin as a % of sales 32.6% 31.9% +0.7 ppt
Operating income 15.6 16.1 -3.0%
Net income1 40.0 11.8 +239%Revenue was up 7.9%, driven by the Setec acquisition. Price pressure in Wireless, combined with some softness in this sub-segment and the quality issue in Telecom, translated into a 1.5% decline in revenue, after restating for acquisitions and currency fluctuations. On a geographical basis, adjusted3 revenue was up 0.8% in the Americas and down 0.9% in EMEA4. In both regions, strong growth in ID & Security and Financial Services was offset by a decline in Telecom revenue. In Asia, revenue was down 6.6%.
Gross profit was up 10.3%, despite the Telecom quality issue. Gross margin was up 0.7 percentage point year-on-year, due to improved business mix and manufacturing efficiency in Telecom. Operating expenses increased 13.8% year-on-year, to 69.6 million euros, mainly due to the Setec acquisition and severance packages.
Consequently, operating income for the fourth quarter was down 3%, at 15.6 million euros.
Net income1 rose to 40.0 million euros, including the recognition of deferred tax assets of 25.6 million euros.
- Balance sheet and cash flow statement
Fourth quarter 2005 highlights:
- Robust free cash flow of 21.5 million euros, excluding non-recurring items.
- Strong cash position, at 418.4 million euros. The Group's cash position is up 17.6 million euros compared to September 30, 2005.
Segment analysis
- Telecom
Fourth quarter 2005 highlights:
- Record wireless shipments, at 101 million units, mainly driven by emerging countries.
- Wireless ASP down 28.4% year-on-year, currency adjusted, reflecting an unfavorable regional mix and price pressure.
In millions of euros Q4 2005 Q4 2004 % change Adjusted
change(3)
(%)
Wireless products & services net sales 163.6 165.3 -1.0%
Wireless gross profit 62.6 62.4 +0.3%
Wireless gross margin 38.2% 37.7% +0.5 ppt
Prepaid phone cards & scratchcards net 15.9 22.6 -29.6%
sales
Prepaid phone cards & scratchcards 2.0 1.9 +5.0%
gross profit
Prepaid phone cards & scratchcards 12.8% 8.6% +4.2 ppts
gross margin
Telecom net sales 179.5 187.9 -4.5% -7.9%
Telecom gross profit 64.6 64.3 +0.3%
Telecom gross margin 36.0% 34.2% +1.8 ppt
Telecom operating expenses 44.5 39.1 +14.0%
As a % of sales 24.8% 20.8% +4.0 ppts
Telecom operating income 20.1 25.2 -20.4%
Operating margin 11.2% 13.4% -2.2 pptsWireless revenue:
- Wireless products & services revenue[5] was down 1.0% year-on-year (down 4.6%, currency adjusted), to 163.6 million euros.
- Fourth quarter Wireless shipments grew 35% year-on-year, to 101 million units, mostly driven by emerging countries in all regions: Latin America, Eastern Europe, China, South-East Asia, Middle East and Africa.
- The Wireless mix notably improved in EMEA4 and North America, driven by momentum in 3G cards. High-end card shipments (3G and above) accounted for 15% of the fourth quarter total, compared to 8% a year ago.
- Wireless average selling price (ASP) was down 7.7% quarter-on-quarter and 28.4% year-on-year, both currency adjusted, reflecting ongoing price pressure and a substantial unfavorable change in the regional mix.
Wireless gross margin rose 0.5 percentage point, despite a quality issue with a specific chip. This issue should have minimal impact on financial statements of fiscal year 2006.
- Financial Services
Fourth quarter 2005 highlights:
- Very strong growth in payment microprocessor cards: shipments up 70%, to 18.1 million units.
- EMV[6] roll-out gained further momentum in Eastern Europe and Latin America.
In millions of euros Q4 2005 Q4 2004 % change Adjusted(3)
change (%)
Net sales 55.8 44.2 +26.3% +10.8%
Gross profit 12.2 9.7 +26.0%
Gross margin as a % of sales 21.8% 21.9% -0.1 ppt
Operating expenses 12.5 13.7 -9.0%
As a % of sales 22.3% 31.0% -8.7 ppts
Operating income -0.3 -4.0 NM
Operating margin as a % of sales -0.5% -9.1% NMRevenue reflects very strong growth in payment microprocessor cards as well as the Setec acquisition.
Payment microprocessor card revenue rose 45% year-on-year. Shipments of payment microprocessor cards grew 70% to 18.1 million units. ASP decline reflects a greater share of modules in the sales mix.
The strong performance in payment cards was mainly driven by the EMV roll-out, which gained momentum in Eastern Europe and Latin America, and sales growth in the United Kingdom and Continental Europe. In addition, this quarter saw the first shipments of EMV cards to China.
- Identity and Security
Fourth quarter 2005 highlights:
- Very strong growth, driven by Government ID and Corporate Security projects.
- On-going roll-out of e-passports in Singapore, Sweden and Norway.
In millions of euros Q4 2005 Q4 2004 % change Adjusted(3)
change (%)
Net sales 26.4 10.4 +152.5% +61.3%
Gross profit 8.4 3.3 +157.1%
Gross margin as a % of sales 32.0% 31.5% +0.5 ppt
Operating expenses 12.6 8.4 +50.3%
As a % of sales 47.9% 80.5% -32.6 ppts
Operating income -4.2 -5.1 NM
Operating margin as a % of sales -15.9% -49.0% +33.1 pptsStrong growth was driven by a substantial increase in Government ID projects, notably in the Middle East, and Corporate Security projects, particularly in the United States, in addition to those from Setec.
Outlook
The Group continues to see strong momentum in its core segments and will maintain its focus on cost efficiency.
Gemplus confirms that it is firmly on track to realize its mid-term objective to achieve a 10% operating margin in 2007.
The Group remains confident in its ability to further strongly improve its operating income in 2006 taking into account the usual seasonality effect of stronger organic growth in the second half than in the first half.
Gemplus also continues to expect the Financial Services and ID & Security segments to turn profitable in 2006.
Fourth Quarter 2005 Business Highlights
- Telecom
During the fourth quarter 2005, Orange included in its Orange Intense campaign a bundle of multimedia services for the youth segment with SIM+. This was the first commercial launch of Gemplus's multimedia SIMs and endorsed its strategy to bring SIM cards into the multimedia era.
Within a record time of nine months, Gemplus went from proof of concept to commercial deployment for a range of SIMs, with one of the most advanced mobile operators.
Gemplus was also selected by Optimus Portugal for its device management solution, GemConnect Device Manager, to improve customer care and boost data traffic.
- Financial Services
In China, Gemplus was the first smart card manufacturer to deliver chip banking cards for ICBC's EMV migration. The cards were produced locally by Gemplus's joint venture with Goldpac and complied with MasterCard specifications, MCHIP/4.0.
Gemplus also announced the launch of a new range of products designed to help card issuers differentiate their service offerings and attract new clients. The Caisse d'Epargne was one of the first banks to deploy this marketing strategy in France, with the roll-out of mandarin-tinted transparent cards targeted at young customers.
Within the contactless segment, Gemplus moved forward with the delivery in the USA of GemInstant cards for MasterCard(R) PayPass(TM) contactless payment to one of the top ten leading banks in North America.
Gemplus was also the first smart card manufacturer to achieve the certification for the MasterCard OneSMART(TM) Chip Authentication Program for its GemAuthenticate(TM) server, which enables financial institutions to secure customer access to online banking services and online purchases using two-factor authentication.
- Identity and Security
For the enterprise security sector, Gemplus was selected by Pfizer to deploy Gemplus's SafesITe solution for network access and digital signature. Gemplus has shipped over 100,000 cards to Pfizer as part of its Global Identity Services program.
Lastly, in a recent report by Frost & Sullivan, Gemplus came out top in the smart card readers and chipsets segment, with a 34.8% share in 2004, up from 20.8% in 2003 (Source Frost & Sullivan, January 2006).
- Research and Development
Gemplus R&D teams were rewarded for their innovation with the win of the Sesames 2005 award for Best Software at the Cartes 2005 Conference and Exhibition. Gemplus innovated with the most compact implementation of the .NET platform for networked secure devices, such as USB dongles, secure MMC and smart cards. Financial calendar
The ordinary shareholders meeting relating to the proposed Gemalto merger is scheduled to take place on February 28, 2006.
First quarter 2006 results are scheduled to be reported on April 24, 2006, before the opening of Euronext Paris.
Conference Call:
The Company has scheduled a conference call for Thursday, February 9, 2006 at 2:30 pm CET (1:30 pm London time and 8:30 am New-York time). Callers may participate in the live conference call by dialing:
+44-(0)207-784-1018 or +1-718-354-1171, access code 5438605.
The slide show will be available on the web site at 12:30 p.m. CET (11:30 a.m. London time). The webcast will also be available on the IR section of www.gemplus.com.
Replays of the conference call will be available approximately 5 hours after the conclusion of the conference call until February 24, 2006 midnight by dialing:
+44-(0)207-784-1024 or +1-718-354-11-12, access Code: 5438605#.
About Gemplus
Gemplus International S.A. (Euronext: LU0121706294 - GEM and NASDAQ: GEMP) is the world's leading player in the smart card industry in both revenue and total shipments (source: Gartner-Dataquest 2005, Frost & Sullivan, Datamonitor.). It has sold over 5.5 billion smart cards.
Gemplus delivers a wide range of portable, personalized solutions in areas including Identity, Mobile Telecommunications, Public Telephony, Banking, Retail, Transport, Healthcare, WLAN, Pay-TV, e-government, and access control.
Gemplus' revenue in 2005 was 939 million euros.
www.gemplus.com
For more information:
Press Gemplus Investor Relations
Jane Strachey Gemplus
Tel: +33-(0)-4-42-36-46-61 Celine Berthier
Mob: +33-(0)-6-79-46-35-93 Tel: +41-(0)-22-544-5054
Email: jane.strachey@gemplus.com Email: celine.berthier@gemplus.com
Edelman Fineo
Frederic Boullard
Tel: +33-(0)-1-56-69-73-95 Tel: +33-(0)-1-56-33-32-31
Email: Email: investors@gemplus.com
frederic.boullard@edelman.com(c)2004 Gemplus. All rights reserved. Gemplus, the Gemplus logo, are trademarks and service marks of Gemplus S.A. and are registered in certain countries. All other trademarks and service marks, whether registered or not in specific countries, are the property of their respective owners.
Some of the statements contained in this release constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activities, performance, or achievements expressed or implied by such forward-looking statements. Actual events or results may differ materially. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we 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 release include, but are not limited to: trends in wireless communication and mobile commerce sectors; our ability to develop new technology, and the effects of competing technologies developed and expected intense competition generally in our main segments; profitability of our expansion strategy; challenges to or loss of our intellectual property rights; our ability to establish and maintain strategic relationships in our major businesses; our ability to develop and take advantage of new software and services; and the effect of future acquisitions and investments on our share price. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. The forward-looking statements contained in this release speak only as of this release. We are under no duty to update any of the forward-looking statements after this date to conform such statements to actual results or to reflect the occurrence of anticipated results.
Gemplus International SA
Press Release - Financial statements
For the quarterly period ended December 31, 2005Consolidated Statements of Income
(in thousands of euros, except shares and per share amounts)
Three months ended Twelve months ended
December 31, December 31,
2005 2004 2005 2004
(unaudited)
Net sales 261,703 242,542 938,875 865,034
Cost of sales 176,475) (165,278) (628,967) (594,533)
Gross Profit 85,228 77,264 309,908 270,501
Research and (17,882) (14,893) (62,269) (62,592)
development
expenses
Selling and (31,851) (27,129) (116,088) (101,493)
marketing
expenses
General and (21,982) (17,298) (67,983) (63,895)
administrative
expenses
Restructuring 1,713 227 3,235 (8,384)
expenses
Other 391 (101) (48) (101)
operating
income
(expense), net
Goodwill - (1,970) - (7,718)
amortization
and impairment
Operating 15,617 16,100 66,755 26,318
income
Financial 2,289 1,364 7,659 5,653
income
(expense), net
Share of 662 (947) (531) (5,970)
profit (loss)
of associates
Other (2,373) (2,158) (2,301) (6,757)
non-operating
income
(expense), net
Income before 16,195 14,359 71,582 19,244
taxes
Income tax 24,219 (2,676) 19,816 (12,953)
expense
NET INCOME 40,414 11,683 91,398 6,291
Attributable
to:
Equity holders 40,013 11,806 89,890 4,674
of the Company
Minority 401 (123) 1508 1,617
interest
Net income per share attributable
to equity holders of the Company
(in euros)
Basic 0.06 0.02 0.15 0.01
Diluted 0.06 0.02 0.14 0.01
Shares used in net
income per share
calculation:
Basic 628,003,671 606,933,869 618,285,864 606,672,060
Diluted 647,413,175 618,170,575 634,742,894 619,022,472
Due to the adoption of IAS 1 (revised 2003)
Presentation of Financial Statements, the
Company
has modified its Consolidated Balance Sheet and
its Consolidated Statement of Income.
Please refer to Note 2.23 "Comparatives" of our
2004 Annual Report for further details.
<end_table>
Consolidated Balance Sheets
(in
thousands of
euros)
December 31, December 31,
2005 2004
ASSETS
Current assets:
Cash and cash equivalents 418,365 388,430
Trade accounts receivable, net 183,022 148,512
Inventory, net 107,673 115,610
Derivative financial instruments 4,187 33,387
Other current receivables 82,128 66,160
Total current assets 795,375 752,099
Non-current assets:
Property, plant and equipment, 158,284 148,916
net
Goodwill, net 90,826 28,197
Deferred development costs, net 21,227 19,222
Other intangible assets, net 23,600 8,965
Deferred income tax assets 32,788 6,264
Investments in associates 16,309 12,864
Available-for-sale financial 2,469 4,752
assets, net
Other non-current receivables, 40,846 43,900
net
Total non-current assets 386,349 273,080
TOTAL ASSETS 1,181,724 1,025,179
LIABILITIES
Current liabilities:
Accounts payable 106,085 94,025
Derivative financial instruments 2,592 -
Salaries, wages and related items 62,641 55,199
Current portion of provisions and 73,434 50,217
other liabilities
Current income tax liabilities 5,228 6,581
Other current tax liabilities 20,821 19,127
Current obligations under finance 5,539 6,005
leases
Total current liabilities 276,340 231,154
Non-current liabilities:
Non-current obligations under 26,425 33,663
finance leases
Non-current portion of provisions 23,482 25,696
Other non-current liabilities 13,417 13,353
Deferred income tax liabilities 4,354 -
Total non-current liabilities 67,678 72,712
Shareholders' equity:
Ordinary shares 133,466 128,643
Additional paid-in capital 1,071,388 1,031,558
Retained earnings (374,183) (459,560)
Other comprehensive income (4,407) 11,956
Less, cost of treasury shares (1,395) (1,985)
Equity attributable to equity holders of 824,869 710,612
the Company
Minority interest 12,837 10,701
Total shareholders' equity 837,706 721,313
TOTAL LIABILITIES AND SHAREHOLDERS' 1,181,724 1,025,179
EQUITY
Due to the adoption of IAS 1 (revised 2003)
Presentation of Financial Statements, the Company
has modified its Consolidated Balance Sheet and its Consolidated
Statement of Income.
Please refer to Note 2.23 "Comparatives" of our 2004 Annual Report
for further details.
Consolidated Statements of Cash Flows
(in thousands
of euros)
Twelve months ended
December 31,
2005 2004
Cash flow from operating activities :
Net income (loss) 91,398 6,291
Adjustments to reconcile net income (loss) to net cash from
operating activities:
Depreciation, amortization and impairment 41,369 56,691
Changes in non-current portion of provisions and (3,367) (32,930)
other liabilities, excluding restructuring
Deferred income taxes (28,372) 3,661
(Gain) / loss on sale and disposal of assets (4,612) 2,582
Share of (profit) loss of associates 571 5,970
Share-based compensation 4,320 -
Other, net (2,130) (2,700)
Changes in operating assets and liabilities:
Trade accounts receivable and related current (12,133) (2,962)
liabilities
Trade accounts payable and related current assets 822 20,774
Inventories 22,661 (19,466)
Value-added and income taxes (1,021) 21,288
Salaries, wages and other 4,429 14,161
Restricted cash 23,277 (28,018)
Restructuring reserve payable (15,847) (18,307)
Net cash from operating activities 121,365 27,035
Cash flows from investing activities:
Sale / (purchase) of activites net of cash (63,457) (2,898)
(disposed) / acquired
Other investments (1,674) (2,982)
Purchase of property, plant and equipment (25,078) (22,888)
Purchase of other assets (2,693) (1,725)
Proceeds from sale of non-current assets 7,025 1,300
Change in non-trade accounts payable and other 2,074 3,064
Net cash used for investing activities (83,803) (26,129)
Cash flows from financing activities:
Proceeds from exercise of share options 2,790 1,479
Payments on long-term borrowings (1,231) -
Proceeds from sales-leaseback operations - 956
Principal payments on obligations under finance (5,938) (5,827)
leases
Increase (decrease) in bank overdrafts (2,657) 1,660
Dividends paid by subsidiaries to minority (1,307) (1,724)
shareholders
Change in treasury shares - 90
Changes in non-trade acounts payables on 19 -
financing activities
Net cash used for financing activites (8,324) (3,366)
Effect of exchange rate changes on cash 697 207
Net increase (decrease) in cash and cash 29,238 (2,461)
equivalents
Cash and cash equivalents, beginning of the 388,430 390,684
period
Cash and cash equivalents, end of the period 418,365 388,430
1) Accounting principles:
2) Segment information
2.1) Fourth Quarter 2005 compared with Fourth Quarter 2004
2.1.1) Operating Segments
Three months ended (in
millions
of euros)
Net sales December 31, 2005 December % Adjusted
31, 2004 change change
(%) (i)
Telecommunications 179.5 187.9 -4% -8%
Financial Services 55.8 44.2 26% 11%
Identity and 26.4 10.4 153% 61%
Security
Total 261.7 242.5 8% -2%
(in
millions
of euros)
Gross profit December (% of net December (% of % change
31, 2005 sales) 31, 2004 net
sales)
Telecommunications 64.6 36% 64.3 34% 0%
Financial Services 12.2 22% 9.7 22% 26%
Identity and 8.4 32% 3.3 31% 157%
Security
Total 85.2 33% 77.3 32% 10%
(in
millions
of euros)
Operating expenses December (% of net December (% of % change
31, 2005 sales) 31, 2004 net
sales)
Telecommunications (44.5) 25% (39.1) 21% 14%
Financial Services (12.5) 22% (13.7) 31% -9%
Identity and (12.6) 48% (8.4) 81% 50%
Security
Total (69.6) 27% (61.2) 25% 14%
(in
millions
of euros)
Operating income December 31, 2005 December 31, Change in
(loss) 2004 Operating
income
(loss)
Telecommunications 20.1 25.2 -5.1
Financial Services (0.3) (4.0) 3.7
Identity and (4.2) (5.1) 0.9
Security
Total 15.6 16.1 -0.5
(i) Adjusted for currency fluctuations, disposals & acquisitions
2.1.2) Geographical Segments
Three months ended (in
millions
of euros)
Net sales December 31, 2005 December % Adjusted
31, 2004 change change
(%) (i)
Europe, Middle 137.4 122.2 12% -1%
East and Africa
Asia 45.5 46.5 -2% -7%
Americas 78.8 73.8 7% 1%
Total 261.7 242.5 8% -2%
(i) Adjusted for currency fluctuations, disposals & acquisitions
The consolidated financial statements of the Company have been prepared
in accordance with International Financial Reporting Standards (IFRS).
2.2) Twelve months 2005 compared with Twelve months 2004
2.2.1) Operating Segments
Twelve months (in
ended millions
of euros)
Net sales December 31, 2005 December % Adjusted
31, 2004 change change
(%) (i)
Telecommunications 654.5 641.8 2% 1%
Financial Services 202.9 182.2 11% 5%
Identity and 81.5 41.0 99% 47%
Security
Total 938.9 865.0 9% 4%
(in
millions
of euros)
Gross profit December (% of net December (% of % change
31, 2005 sales) 31, 2004 net
sales)
Telecommunications 241.5 37% 220.8 34% 9%
Financial Services 41.9 21% 37.7 21% 11%
Identity and 26.5 33% 12.0 29% 120%
Security
Total 309.9 33% 270.5 31% 15%
(in
millions
of euros)
Operating expenses December (% of net December (% of % change
31, 2005 sales) 31, 2004 net
sales)
Telecommunications (158.7) 24% (149.0) 23% 6%
Financial Services (43.2) 21% (63.9) 35% -32%
Identity and (41.3) 51% (31.3) 76% 32%
Security
Total (243.2) 26% (244.2) 28% 0%
(in
millions
of euros)
Operating income December 31, 2005 December 31, Change in
(loss) 2004 Operating
income
(loss)
Telecommunications 82.9 71.8 11.1
Financial Services (1.3) (26.3) 25.0
Identity and (14.8) (19.2) 4.4
Security
Total 66.8 26.3 40.4
(i) Adjusted for currency fluctuations, disposals &
acquisitions
2.2.2) Geographical Segments
Twelve months (in
ended millions
of euros)
Net sales December 31, 2005 December % Adjusted
31, 2004 change change
(%) (i)
Europe, Middle 491.0 443.1 11% 2%
East and Africa
Asia 172.7 194.3 -11% -13%
Americas 275.2 227.6 21% 21%
Total 938.9 865.0 9% 4%
(i) Adjusted for currency fluctuations, disposals &
acquisitions
[1] Net Income attributable to Equity Holders
[2] Free cash flow is defined as net cash flow from operating activities
less the purchase of property, plant and equipment and other investments
related to the operating cycle (excluding acquisitions and financial
investments).
[3] Adjusted for currency fluctuations, discontinued operations &
acquisitions.
[4] Europe, Middle East and Africa
[5] Wireless products & services revenue comprises wireless
microprocessor cards and related applications (embedded software and Over The
Air platforms) and services (system integration and operated services).
[6] EMV is a jointly defined set of specifications adopted by Europay,
MasterCard and Visa for the migration of bank cards to smart card technology.