Gemalto full year 2013 results

– Double-digit expansion in profit from operations and revenue, at EURO348 million and EURO2,384 million respectively, delivering a 14.6% operational margin
– Platforms & Services revenue up +21% and Embedded software & Products revenue up +8%
– Free cash flow generation accelerated over the year with EURO163 million in the second semester
– Dividend increase to 38 cents per share will be proposed to the General Meeting of shareholders

To better assess past and future performance, the income statement is presented on an adjusted basis and revenue figures above and in this document are for ongoing operations, with variations at constant exchange rates except where otherwise noted (see page 2 “Basis of preparation of financial information”). 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 the consolidated financial statements. Appendix 1 provides synthesis information for ongoing and total operations, and reconciliation with the IFRS income statement is presented in Appendix 2. The statement of financial position is prepared in accordance with IFRS, and the cash position variation schedule is derived from the IFRS cash flow statement.

AMSTERDAM, March 5, 2014 (GLOBE 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
                                                      Year-on-year variations                        
                                                      at historical                                  
  Ongoing operations       Full year      Full year    exchange                                      
  (EURO in millions)        2013           2012        rates         at constant exchange rates      
  Revenue                  2,384          2,236       +7%            +11%                            
  Gross profit             937            862         +9%                                            
  Operating expenses       (589)          (557)       +6%                                            
  Profit from operations   348            305         +14%                                           
  Profit margin            14.6%          13.6%       +1.0 ppt

Olivier Piou, Chief Executive Officer, commented: “Gemalto closed its 2010-2013 development plan with EURO348 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 EURO282 million, up by +18% compared to EURO239 million recorded in the previous year.

Restructuring and acquisition-related expenses fell to EURO3 million versus EURO8 million for 2012. Amortization and depreciation of intangibles resulting from acquisitions increased to EURO27 million from EURO21 million due to the full year impact of acquisitions closed in the latter part of 2012. Equity-based compensation charges for 2013 reduced to EURO35 million from the EURO39 million incurred in 2012.

Profit for the period in 2013 was EURO258 million, up by +29% compared to EURO201 million in 2012. Of the EURO57 million incremental profit, EURO20 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 EURO3.01 and diluted earnings per share were EURO2.92 in 2013 compared to EURO2.41 and EURO2.31 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.

                               Full year 2013          Full year 2012                                                    
                                                                                variation at                             
  Extract of the adjusted                                                       historical                               
   income statement for all    EURO in     As a % of   EURO in     As a % of    exchange      Year-on-year variation at  
   operations                   millions    revenue     millions    revenue     rates          constant exchange rates   
  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                                  
  Profit from operations       347.4       14.5%       306.3       13.6%       +0.9 ppt                                  
  Net profit                   315.5       13.2%       261.6       11.7%       +1.6 ppt                                  
  Basic Earnings per share                                                                                               
   (EURO)                      3.68                    3.14                    +17%                                      
  Diluted Earnings per share                                                                                             
   (EURO)                      3.57                    3.00                    +19%

Revenue for all operations of the company reached EURO2.39 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 EURO735 million (EURO1,654 in 2009), or +44%.

Across all segments, Platforms & Services activities grew by +21%, to account for revenue of EURO462 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 EURO72 million to EURO936 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 (EURO2) million in 2013 compared to a positive non-recurring contribution of +EURO9 million in 2012, hence slightly reducing the year-on-year expansion in profit from operations, which came in at EURO347 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 EURO600 million profit from operations in 2017.
Financial income was a charge of EURO7 million for the year. Net interest income was a charge of EURO1 million and the foreign exchange transactions and hedging instruments re-evaluation at year-end generated a charge of EURO11 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 EURO18 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 EURO358 million.

Income tax expense was EURO43 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 EURO315 million in 2013, a +21% increase when compared to EURO262 million in 2012, and the adjusted net profit margin increased to 13.2%.

Basic adjusted earnings per share for all operations came in at EURO3.68, up +17%, and fully diluted adjusted earnings per share for all operations settled at EURO3.57, 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 EURO332 million compared to EURO311 million in 2012. Changes in working capital decreased cash flow by (EURO76) million compared to (EURO18) 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 EURO103 million, or 4.3% of revenue and down from last year’s figure of EURO125 million. Purchases of property, plant, and equipment represented EURO62 million, versus EURO68 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 EURO27 million from EURO36 million in 2012. Total acquisition and capitalization of intangible assets amounted to EURO41 million, or 1.7% of sales, down from EURO57 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 +EURO152 million composed of a free cash inflow for the second semester of +EURO163 million and a (EURO12) million outflow for the first semester relating to rapidly growing businesses in Asia.

Net cash flow from financial income elements was EURO1 million, corresponding to interest received net. The net impact from investing activities related to acquisitions was EURO30 million in 2013 down from EURO73 million in 2012. This consideration corresponds to cash payments made for business combinations completed during the year.

Gemalto’s share buy-back program used EURO23 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 EURO50.46.

On May 31, 2013, Gemalto paid a cash dividend of EURO0.34 per share in respect to the fiscal year 2012. This distribution used EURO29 million in cash compared to EURO26 million distributed in 2012, an increase of +13%. Other financing activities generated EURO19 million, including EURO32 million received from employees from the exercise of share options and EURO11 million remitted for the repayment of borrowings.

Consequently, Gemalto’s cash and cash equivalents as at December 31, 2013 were EURO456 million. Current and non-current borrowings reduced to EURO7 million from EURO10 million in 2012, resulting in a net cash position of EURO449 million, an increase of +EURO97 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 EURO237 million. Total assets grew by +8% or +EURO204 million to EURO2,919 million as at December 31, 2013, compared to EURO2,715 million as at December 31, 2012, due to the increase of current assets, balanced between trade receivables and cash in relation to the Company’s increased business activities.

Shareholders’ equity increased by +11%, or +EURO221 million, to EURO2,153 million as at December 31, 2013 compared to EURO1,932 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.

  Full year 2013                                                            
  Revenue contributions by sector                    Payment[2]  Total      
  (EURO in millions, ongoing                                     four main  
   operations)                           Mobile[1]   & Identity   segments  
  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                                          
  at constant exchange rates             28%         66%         94%        

  Full year 2013                                     Platforms             
  Revenue contributions by activity      Embedded               Total      
  (EURO in millions, ongoing              software   &          four main  
   operations)                           & Products   Services   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                                         
  at constant exchange rates             59%         35%        94%

In 2013, revenue for ongoing operations, including the four main segments and the Patents activity, came in at EURO2,384 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 EURO361 million, or 15% of Gemalto’s total revenue, up from EURO270 million and 12% of total Company revenue in 2012.

                                                                    Total                 Total     
  Year-on-year variations  Mobile    Machine-  Secure                four                  ongoing  
   and currencies impact    Communi  to-Machi   Transact             main                  operatio 
  (EURO in millions)       cation    ne        ions       Security   segments  Patents    ns        
  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%       
  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%      
  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%

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 EURO348 million, up +14% on the previous year. Since the beginning of the 2010-2013 long-term development plan, profit from operations increased by +EURO178 million, 37% more than the EURO130 million increase initially targeted to reach the Company’s EURO300 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 (EURO8) 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 (EURO8) 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

                           Full year 2013              Full year 2012              Year-on-year variation                
                                                                                   at historical                         
                           EURO in       As a % of     EURO in       As a % of      exchange       at constant  exchange 
                            millions      revenue       millions      revenue       rates           rates                
  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

Mobile Communication recorded annual revenue of EURO1.09 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 (EURO8) 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 +EURO12 million to EURO205 million, up by +6% and accounting for 19% of the segment’s revenue.


                           Full year 2013             Full year 2012             Year-on-year variation                  
                                                                                 at historical                           
                           EURO in      As a % of     EURO in      As a % of      exchange      at constant  exchange    
                            millions     revenue       millions     revenue       rates          rates                   
  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

Machine-to-Machine posted revenue of EURO200 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 EURO22 million, up +57% on the previous year, to account for 11% of the segment’s revenue.

Secure Transactions

                           Full year 2013              Full year 2012              Year-on-year variation                
                                                                                   at historical                         
                           EURO in       As a % of     EURO in       As a % of      exchange       at constant  exchange 
                            millions      revenue       millions      revenue       rates           rates                
  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

Secure Transactions posted revenue of EURO660 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 EURO122 million, up by +9%.

Gross profit increased by +13%, to EURO206 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 EURO77 million, up by +23% versus 2012.


                           Full year 2013              Full year 2012             Year-on-year variation                 
                                                                                  at historical                          
                           EURO in       As a % of     EURO in      As a % of      exchange       at constant  exchange  
                            millions      revenue       millions     revenue       rates           rates                 
  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)

Security recorded +11% growth at constant exchange rates on top of the +19% growth delivered the previous year, to reach EURO416 million. Both Government Programs and Identity & Access Management posted double-digit expansions in sales.

Across the segment, Platforms & Services revenue rose by +42% to EURO93 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 EURO148 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 EURO2 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 EURO41 million for the full year 2013 compared to EURO45 million in 2012, and represented 10% of the segment’s revenue.


                           Full year 2013             Full year 2012           Year-on-year variation                    
                                                                               at historical                             
                           EURO in      As a % of     EURO in      As a % of    exchange      at constant  exchange      
                            millions     revenue       millions     revenue     rates          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.

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 EURO16 million, up by EURO14 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 EURO3.1 million, compared to a loss of EURO9.8 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 EURO600 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 EURO1 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 KongTrust 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 serviceMachine-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 AmericaPayment & Identity sectorPayment

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 Telefónica-MasterCard joint venture in Brazil November 20, 2013 UniCredit Bank selects Gemalto for mobile payment in RussiaIdentity 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 ePassportIdentity 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 EURO0.38 per share in 2014 in relation with the 2013 financial year, a 12% increase compared to the cash dividend of EURO0.34 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:

Ex-dividend date

May 23, 2014 (the date as of which shares are traded without the right to the 2014 dividend)
Dividend record date

(the date on which shareholder positions are recorded as per close of business in
May 27, 2014 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.


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:

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 (

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
Dual listing on NYSE

Exchange 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.

                  Sponsored Level I 
  Structure        ADR              
  Exchange        OTC               
  Ratio (ORD:DR)  1:2               
  DR ISIN         US36863N2080      
  DR CUSIP        36863N 208        

  Investor Relations        Corporate Communication       Media Relations Agency      
  Gabriel Rangoni           Isabelle Marand               Suzanne Bakker              
  M.: +33 6 1426 6956       M.: +33 6 1489 1817           M. : +31 6 1136 8659        
  gabriel.rangoni@gemalto.                                suzanne.bakker@citigateff.n 
  com                l                           
  John Lineberger                                                                     
                                                          Edi Cohen                   
  M.:+33 6 1243 6304                                                                  
                                                          M. : +31 6 2151 7820        

About Gemalto

Gemalto (Euronext NL0000400653 GTO) is the world leader in digital security with 2013 annual revenues of EURO2.4 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,,, 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.

                               Appendix 1

              Adjusted income statement by business segment

                          Ongoing operations                                                                                   
 Full year 2013                                                                                                                
 Adjusted income statement                                                                                                     
                          Mobile                    Secure                                                 Assets held Total   
 (EURO in millions)        CommunicationM2M          Transactions Security      Patents      Total          for sales   Gemalto
 Revenue                  1,091.3       200.3       659.8         416.1         16.3         2,383.9       4.7         2,388.6 
 Gross profit             496.6         72.0        206.2         147.7         14.6         937.1         (0.8)       936.2   
 Operating expenses       (291.1)       (50.1)      (129.6)       (106.7)       (11.5)       (589.1)       0.3         (588.8) 
 Profit from operations   205.5         22.0        76.6          40.9          3.1          348.0         (0.6)       347.4   

                          Ongoing operations                                                                                  
 Full year 2012                                                                                                               
 Adjusted income statement                                                                                                    
                          Mobile                    Secure                                                Assets held Total   
 (EURO in millions)        CommunicationM2M          Transactions Security     Patents      Total          for sale    Gemalto
 Revenue                  1,089.6       192.2       568.0         384.0        2.1          2,235.9       9.6         2,245.5 
 Gross profit             471.0         63.8        183.2         142.4        1.8          862.3         2.1         864.4   
 Operating expenses       (277.7)       (49.8)      (120.9)       (97.2)       (11.6)       (557.2)       (0.9)       (558.1) 
 Profit from operations   193.3         14.0        62.4          45.2         (9.8)        305.0         1.2         306.3   

                               Appendix 2

       Reconciliation from Adjusted financial information to IFRS

                                                            12 month period ending December 31, 2013                                     
                                Adjusted                                                                      Adjusted        IFRS       
                                Items not related to ongoing                                                  
                                 operations                 Adjustments                                       
 EURO in thousands                                                                                                                       
                                                                                                              2,388,60        2,388,60   
 Revenue                        2,383,935                                                       4,672         7       -       7          
                                                                                                              (1,452,3        (1,459,4   
 Cost of sales                  (1,446,863)                                                     (5,505)       68)     (7,116) 84)        
 Gross profit                   937,072                                                         (833)         936,239 (7,116) 929,123    
 Operating expenses                                                                                                                      
                                                                                                              (139,276        (143,420   
 Research and engineering       (139,276)                                                       -             )       (4,144) )          
                                                                                                              (321,180        (332,860   
 Sales and marketing            (320,827)                                                       (353)         )       (11,680))          
                                                                                                              (127,541        (139,153   
 General and administrative     (127,398)                                                       (143)         )       (11,612))          
 Gain on sale of assets held for                                                                                                         
  sale                          -                                                               1,128         1,128           1,128      
 Other income (expense), net    (1,557)                                                         (381)         (1,938)         (1,938)    
 Profit from operations         348,014                                                         (582)         347,432                    
 Share-based compensation                                                                                                                
  charges and associated costs                                                                                        (34,552)           
 Restructuring and                                                                                                                       
  acquisition-related expenses                                                                                        (3,469) (3,469)    
 Amortization and depreciation                                                                                                           
  of intangibles resulting from                                                                                                          
  acquisitions                                                                                                        (26,912)(26,912)   
 Operating profit                                                                                                     (64,933)282,499    
 Financial income (expense), net(8,245)                                                         1,513         (6,732) -       (6,732)    
 Share of profit of associates  (2,298)                                                         -             (2,298) -       (2,298)    
 Non-recurring profit relating                                                                                                           
  to associates                 19,962                                                          -             19,962  -       19,962     
 Profit before income tax       357,433                                                         931           358,364 (64,933)293,431    
 Income tax (expense)           (42,892)                                                        -             (42,892)7,662   (35,230)   
 Net profit                     314,541                                                         931           315,472 (57,271)258,201    
 Attributable to:                                                                                                                        
 Owners of the Company          314,294                                                         723           315,017 (57,121)257,896    
 Non-controlling interests      247                                                             208           455     (150)   305        
 Earnings per share                                                                                                                      
 Basic earnings per share       3.67                                                                          3.68            3.01       
 Diluted earnings per share     3.56                                                                          3.57            2.92

The full year 2013 adjusted basic earnings per share is determined on the basis of the weighted average number of Gemalto shares outstanding during the twelve-month period ended December 31, 2013, i.e. 85,589,747 shares taking into account the effect of the share buy-back program. The full year 2013 adjusted diluted earnings per share is determined by using 88,310,798 shares corresponding to the IFRS treasury stock method, i.e. on the basis of the same weighted average number of Gemalto shares outstanding and considering that all outstanding share based instruments were exercised (3,508,133 instruments) and the proceeds received from the instruments exercised (EURO57,973,170) were used to buy-back shares at the average share price of the full year 2013 (787,081 shares at EURO73.66).

                                 12 month period ending December 31, 2012                                
                                 Adjusted                    Adjusted                      IFRS          
                                 Items not                  
                                  related to                
                                  operations    Adjustments 
  EURO in thousands                                                                                      
  Revenue                        2,235,936      9,564        2,245,500                     2,245,500     
  Cost of sales                  (1,373,670)    (7,419)      (1,381,089)    (6,510)        (1,387,599)   
  Gross profit                   862,266        2,145        864,411        (6,510)        857,901       
  Operating expenses                                                                                     
  Research and engineering       (133,926)      (3,711)      (137,637)      (3,502)        (141,139)     
  Sales and marketing            (299,759)      (2,548)      (302,307)      (14,144)       (316,451)     
  General and administrative     (132,998)      (266)        (133,264)      (14,466)       (147,730)     
  Gain on sale of a subsidiary                  5,584        5,584                         5,584         
  Other income (expense), net    9,455          35           9,490                         9,490         
  Profit from operations         305,038        1,239        306,277                                     
  Share-based compensation                                                                               
   charges and associated costs                                             (38,622)                     
  Restructuring and                                                                                      
   acquisition-related expenses                                             (7,911)        (7,911)       
  Amortization and depreciation                                                                          
   of intangibles resulting                                                                              
   from acquisitions                                                        (20,985)       (20,985)      
  Operating profit                                                          (67,518)       238,759       
  Financial income (expense),                                                                            
   net                           (11,494)       61           (11,433)                      (11,433)      
  Share of profit of associates  2,009          (208)        1,801                         1,801         
  Profit before income tax       295,553        1,092        296,645        (67,518)       229,127       
  Income tax (expense) credit    (34,902)       (103)        (35,005)       6,799          (28,206)      
  Net profit                     260,651        989          261,640        (60,719)       200,921       
  Attributable to:                                                                                       
  Owners of the Company          260,365        1,270        261,635        (60,594)       201,041       
  Non-controlling interests      286            (281)        5              (125)          (120)         
  Earnings per share                                                                                     
  Basic earnings per share       3.13           -            3.14           -              2.41          
  Diluted earnings per share     2.99           -            3.00           -              2.31          

                               Appendix 3

              Consolidated statement of financial position

  EURO in thousands                                                                  
                          Year ended December 31,         2013          2012         
  Non-current assets                                                                 
                          Property, plant and equipment,                             
                           net                            237,320       237,444      
                          Goodwill, net                   850,600       852,240      
                          Intangible assets, net          202,581       198,660      
                          Investments in associates       49,035        25,697       
                          Deferred income tax assets      101,289       108,027      
                          Available-for-sale financial                               
                           assets, net                    -             -            
                          Other non-current assets        47,360        48,883       
                          Derivative financial                                       
                           instruments                    11,044        14,290       
                          Total non-current assets        1,499,229     1,485,241    
  Current assets                                                                     
                          Inventories, net                204,393       185,535      
                          Trade and other receivables,                               
                           net                            737,824       652,752      
                          Derivative financial                                       
                           instruments                    21,363        19,340       
                          Cash and cash equivalents       456,370       358,610      
                          Total current assets            1,419,950     1,216,237    
                          Assets held for sale            -             13,210       
                          Total assets                    2,919,179     2,714,688    

                          Share capital                   88,016        88,016       
                          Share premium                   1,206,914     1,207,195    
                          Treasury shares                 (87,962)      (151,753)    
                          Fair value and other reserves   99,396        123,388      
                          Cumulative translation                                     
                           adjustments                    (41,489)      81           
                          Retained earnings               883,525       654,795      
                          Capital and reserves                                       
                           attributable to the owners of                             
                           the Company                    2,148,400     1,921,722    
                          Non-controlling interests       5,053         10,590       
                          Total equity                    2,153,453     1,932,312    
  Non-current liabilities                                                            
                          Borrowings                      3,098         3,674        
                          Deferred income tax                                        
                           liabilities                    25,474        31,994       
                          Employee benefit obligations    82,972        80,039       
                          Provisions and other                                       
                           liabilities                    43,708        84,439       
                          Derivative financial                                       
                           instruments                    791           277          
                          Total non-current liabilities   156,043       200,423      

  Current liabilities                                                                
                          Borrowings                      3,812         6,564        
                          Trade and other payables        558,065       539,401      
                          Current income tax liabilities  32,472        23,218       
                          Provisions and other                                       
                           liabilities                    10,649        6,990        
                          Derivative financial                                       
                           instruments                    4,685         4,803        
                          Total current liabilities       609,683       580,976      
                          Liabilities associated with                                
                           assets held for sale           -             977          
                          Total liabilities               765,726       782,376      
                          Total equity and liabilities    2,919,179     2,714,688    

                               Appendix 4

                    Cash position variation schedule

                                                Full year  Full year 
  EURO in millions                               2013       2012     

  Cash & cash equivalent, beginning of period   363        330       

  Cash generated by operating activities,                            
   before changes in working capital            332        311       
  Cash provided (used) by working capital                            
   decrease (increase)                          (76)       (18)      

  Cash used in restructuring actions            (2)        (8)       

  Cash generated by operating activities        255        285       

  Capital expenditure and acquisitions of                            
   intangibles                                  (103)      (125)     

  Free cash flow                                152        160       

  Interest received, net                        1          2         

  Cash used by acquisitions                     (30)       (73)      

  Other cash provided by investing activities   13         5         

  Currency translation adjustments              (9)        (4)       

  Cash generated (used) by operating and                             
   investing activities                         127        89        

  Cash used by the share buy-back program       (23)       (45)      

  Dividend paid to Gemalto shareholders         (29)       (26)      

  Other cash provided by financing activities   19         14        

  Cash and cash equivalent, end of period       456        363       

  Current and non-current borrowings including                       
   finance lease and bank overdrafts, end of                         
   period                                       (7)        (10)      

  Net cash, end of period                       449        353       

                               Appendix 5

                          Platforms & Services

                                               Year-on-y  ear       
                                               ear         variatio 
  Revenue from ongoing                          variatio  ns at     
   operations in                               ns at       historic 
  Platforms & Services                          constant  al        
   activities                                   exchange   exchange 
  (EURO in millions)       2013      2012       rates      rates    
  Mobile                   247       210       +21%       +18%      
  Payment & Identity       215       181       +21%       +18%      
  Total                    462       392       +21%       +18%      

                               Appendix 6

               Revenue from ongoing operations, by region

                                                  Year-on-y  ear       
                                                  ear         variatio 
                                                   variatio  n at      
                                                  n at        historic 
                                                   constant  al        
                         Full year    Full year    exchange   exchange 
  EURO in millions        2013         2012        rates      rates    
  EMEA                   1,156        1,126       +4%        +3%       
  North & South America  753          678         +16%       +11%      
  Asia                   475          432         +20%       +10%      
  Total revenue          2,384        2,236       +11%       +7%       

                                                  Year-on-y  ear       
                                                  ear         variatio 
                                                   variatio  n at      
                                                  n at        historic 
                                                   constant  al        
                         Second half  Second       exchange   exchange 
  EURO in millions        2013         half 2012   rates      rates    
  EMEA                   599          610         +0%        (2%)      
  North & South America  408          366         +20%       +11%      
  Asia                   248          244         +15%       +2%       
  Total revenue          1,255        1,220       +9%        +3%       

                               Appendix 7

        Average exchange rates between the Euro and the US dollar

  EUR/USD             2013       2012      
  First quarter       1.33       1.32      
  Second quarter      1.29       1.30      
  First half          1.31       1.31      
  Third quarter       1.32       1.24      
  Fourth quarter      1.36       1.29      
  Second half         1.34       1.26      
  Full year           1.33       1.29

[1] “Mobile” includes the Mobile Communication and Machine-to-Machine segments
[2] “Payment & Identity” includes the Secure Transactions and Security segments

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