Gemalto First Semester 2018 Results

• Revenue at €1,387 million and profit from operations at €92 million in line with our expectations

• 2018 full year outlook confirmed

• Identity, IoT & Cybersecurity: double-digit revenue growth and strong investment to capture market opportunities

• Smartcards & Issuance: operational performance and transition plan on track

AMSTERDAM-Friday 31 August 2018 [ AETOS Wire ]

(BUSINESS WIRE)-- Regulatory News:

Gemalto (Euronext NL0000400653 - GTO), the world leader in digital security today announces its results for the first semester 2018.

Key figures of the adjusted income statement

					Year-on-year variations
(€ in millions)		First semester 2018		First semester 2017		at historical exchange rates		at constant exchange rates
Revenue		1,387		1,393		=		+6%
Gross profit		497		502		(1%)
Operating expenses		(406)		(409)		(1%)
Profit from operations		92		93		(1%)
Profit margin		6.6%		6.7%		(0.1 pp)

Philippe Vallée, Chief Executive Officer, commented: “Gemalto first semester results reflect the teams’ strong focus on implementing the Company’s strategic priorities.

The Company’s revenue grew organically +2%, driven by its three growing businesses in the Identity, IoT & Cybersecurity segment and as the US EMV market demand normalizes. The IoT business continued to leverage strong demand for Gemalto solutions in industrial sectors. We see good momentum in Cybersecurity, emphasizing the growing role of Gemalto’s technology in securing cloud services. In addition, the Governments business won its largest ever passport contract in the UK with Her Majesty’s Passport Office, highlighting Gemalto’s strong offering in helping governments better protect their citizens. In Smartcards & Issuance, we continue to drive the segment’s digital transformation as strong pricing discipline in removable SIM and payment cards led to a stabilizing of profit margin. We also delivered on significant milestones of our transition plan and will see their benefits in the coming quarters.

With similar trends expected in our markets in the second part of the year, our strategic priorities remain unchanged. We will continue to focus on growth opportunities in the Identity, IoT & Cybersecurity segment, leading the digital transformation and rightsizing our operations in the Smartcards & Issuance segment toward achieving our 2018 outlook.”

Basis of preparation of financial information

Segment information

The Identity, IoT & Cybersecurity segment comprises businesses associated with homeland security for governments (“Governments”), IoT connectivity for industrial applications (“IoT”) and cybersecurity for enterprises (“Cybersecurity”).

The Smartcards & Issuance segment comprises businesses mainly associated with removable SIM cards (“SIM”), payment cards (“Payment”) and their issuance services. The segment includes as well businesses associated to the digital transformation of smart cards (“Digital”) such as digital payment, digital banking, remote subscription management, embedded SIM/MIM and embedded secure elements. Patents business is also included in this segment.

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 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. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20180830005759/en/

Contacts

Investor Relations

Jean-Claude Deturche

Mr.: +33 6 2399 2141

jean-claude.deturche@gemalto.com

or

Corporate Communication

Isabelle Marand

Ms.: +33 6 1489 1817

isabelle.marand@gemalto.com

or

Media Relations Agency

Suzanne Bakker

Ms.: +31 6 1136 8659

suzanne.bakker@citigateff.nl

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