ג'מלטו - תוצאות כספיות רבעון שלישי לשנת 2016 ומבט על שנת 2017

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ג'מלטו תוצאות כספיות רבעון שלישי לשנת 2016 ומבט על שנת 2017

Revenue at €753 million, (1%) at constant exchange rates

• For 2016 Gemalto expects to generate a +1.5 percentage point gross margin increase
• (Euronext NL0000400653 - GTO), the world leader in digital security today announces its revenue for the third quarter of 2016.

  					Main segments							Main activities							Patents & Others
  Third quarter 2016 (€ in millions)	Total				Payment &  Identity			Mobile				Embedded software & Products (E&P)			Platforms & Services (P&S)
  Revenue		753				467			285				522			231				1
  Year-on-year variation at constant exchange rates		(1	%)			+1	%		(5	%)			(2	%)		0	%			+2	%
  Year-on-year variation at historical exchange rates		(2	%)

  Philippe Vallée, Chief Executive Officer, commented: “Gemalto’s revenue was stable over the first nine months of 2016. In the third quarter, Enterprise and Government Programs posted moderate revenue increases while Machine-to-Machine’s growth accelerated. Payment and SIM sales were in line with the Company’s expectations for the quarter. Gemalto expects to increase its gross margin by +1.5 percentage point through an acceleration of revenue growth towards the end of the year. From the current planning processes, Gemalto’s 2017 profit from operations is expected to be between €500 million and €520 million, which corresponds to an annual expansion of around +10% since 2013. This outlook reflects a very adverse mobile environment and slower than anticipated migration of payment cards in 2017. It also takes into account plans for increased investments to capture growth beyond 2017 in Mobile Platforms & Services, Enterprise and Government Programs. Gemalto’s Platforms & Services revenue objective of €1 billion in 2017 remains unchanged.”

  Basis of preparation of financial information

  Segment 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 in 2015 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).

  Historical exchange rates and constant currency figures

  The Company sells its products and services in a very large number of countries and is commonly remunerated in currencies other 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. Revenue variations are at constant exchange rates and include the impact of currencies variation hedging program, except where otherwise noted. All other figures in this press release are at historical exchange rates, except where otherwise noted.

  Adjusted income statement and profit from operations (PFO) non-GAAP measureFair value adjustments over net assets acquired are defined as the reversal in the income statement of the fair value adjustments recognized as a result of a business combination, as prescribed by IFRS3R. Those adjustments are mainly associated with (i) the amortization expense related to the step-up of the acquired work-in-progress and finished goods assumed at their realizable value and (ii) the amortization of the cancelled commercial margin related to deferred revenue balance acquired.

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 expenses, Sales and Marketing expenses, 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.

General information

For the third quarter of 2016 total revenue came in at €753 million, lower by (1%) at constant exchange rates. Payment & Identity, representing 62% of total Company revenue, posted sales of €467 million, up +1% year-on-year.

Embedded software & Products revenue of €522 million was (2%) lower compared to the same period last year due to lower sales to mobile network operators and to a lesser extent to financial institutions. Secure documents for Government Programs and wireless modules for Machine-to-Machine continued to record positive trends this quarter. The Platforms & Services activity, posted sales of €231 million, was stable year-on-year due to client delays in project commencements for Mobile Platforms & Services, eGovernment services and Enterprise cybersecurity solutions this quarter.

Currency movements had a negative (1) percentage point effect on revenue growth in the third quarter of 2016. The hedging program, which aims at partially neutralizing the impact of currency variations on the Company’s profit from operations, produced a 1 percentage point difference compared to the same period last year.

Revenue variations by region, at constant and historical exchange rates, are presented in Appendix 1.

Segment information

Payment & Identity

The Payment & Identity segment’s revenue came in at €467 million, increasing by +1% compared to the previous year.

Embedded software & Products revenue was stable at €288 million. The segment’s Platforms & Services revenue came in at €179 million, up +2% compared to the same period last year.

The Payment business revenue came in at €241 million, reduced by (3%) year-on-year. The Americas revenue was lower due to soft market environment in Brazil and to the high comparison basis in United States related to the EMV liability shift deadline a year ago.

The Enterprise business revenue increased to €117 million, up +4% on the same period in 2015. The trend in revenue mix within the Authentication business line continues to move towards software and services. To meet the increasing market demand for cybersecurity solutions, the Enterprise business is continuing to increase its sales coverage, expanding Gemalto’s network of technology partners and accelerating investment in R&D in order to strengthen the Company’s offering in this growing sector.

The Government Programs business revenue was at €109 million, up +9% year-on-year, with the increase coming from deliveries of previously won projects. During the third quarter, Gemalto also finalized the transformation of a production site in order to accompany the increase in project deliveries anticipated over the coming quarters.

Mobile€ in millions

Third quarter 2016Third quarter 2015

285

299

(5

%)

The Mobile segment posted revenue of €285 million, (5%) lower at constant exchange rates compared to the third quarter of previous year.

Embedded software & Products revenue for the segment came in at €234 million. SIM sales were lower by (11%) at €152 million year-on-year, compared to the (16%) in the second quarter of 2016, with the improvement coming from slightly better conditions in Latin America and Asia. During the quarter, regulators of some countries in Africa also started to apply stricter subscription registration processes, similar to what is observed in the Chinese market with lower market demand. The Machine-to-Machine business grew by +11% year-on-year, at €81 million and accelerating sequentially, supported by the expanding global demand of connected devices and embedded secure elements for the Internet of Things (IoT).

Platforms & Services revenue for the segment came in at €52 million, reduced by (9%) year-on-year with slower project commencements due to longer client decision processes. During this quarter, Gemalto continues to progress with its Trusted Service Hub (TSH) offering by partnering Dai Nippon Printing (DNP) in Japan to offer issuers digital card provisioning and tokenization services for Apple Pay, which is transforming mobile payments with an easy, secure and private way to pay.  Gemalto was also selected by Market Pay to load digital Carrefour payment and loyalty cards as well as by Valeo to provision and store virtual car keys securely into smartphones. The Company continues to work closely with both device manufacturers and mobile network operators on the GSMA specifications for embedded SIMs (eSIMs) and remote provisioning for primary devices in the consumer market, in order to best align and set up the ecosystem.

Patents & Others

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.

About Gemalto

Gemalto 

M.: +33 6 2947 0814

M.: +33 6 1751 4467

M.: +33 6 1489 1817

M. : +31 6 1136 8659

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