Form 20-F þ | Form 40-F o |
Yes o | No þ |
1/16 |
Gemplus reports strong third quarter 2005 results: operating margin well on track to reach 2007 10% target | ||||||||
Press Release Financial statements | ||||||||
SIGNATURE |
| Substantial improvement in operating margin, to 8.6%. | ||
| Robust growth in all core businesses: net sales up 15.5% year-on-year (incl. Setec). | ||
| Strong increase in attributable net income, to 20.9 million euros. | ||
| Solid free cash flow of 28.2 million euros, excluding non-recurring items. |
In millions of euros | Q3 2005 | Q3 2004 | Year-on-year change | |||||||||
Net sales |
247.9 | 214.7 | +15.5 | % | ||||||||
Adjusted for currency fluctuations, disposals and acquisitions |
+7.5 | % | ||||||||||
Gross profit |
82.8 | 64.0 | +29.4 | % | ||||||||
Gross margin |
33.4 | % | 29.8 | % | +3.6 ppts | |||||||
Operating expenses |
61.5 | 64.1 | 4.1 | % | ||||||||
Operating income |
21.3 | 0.2 | NM | |||||||||
Operating margin |
8.6 | % | 0.1 | % | +8.7 ppts | |||||||
Attributable net income |
20.9 | 8.5 | NM | |||||||||
Free cash flow excluding non-recurring items1 |
28.2 | 12.2 | +131.6 | % | ||||||||
Cash and cash equivalents |
400.8 | 389.2 | +3.0 | % | ||||||||
Per share data (in euros) |
||||||||||||
Earnings per share (fully diluted) |
0.03 | 0.01 | NM | |||||||||
1 | Free cash flow excluding non recurring items 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). |
2/16 |
| Income statement |
| Robust growth led by the Americas and EMEA2: +15.5%. | ||
| Continuous progress in gross margin: 33.4%, up 3.6 percentage points year-on-year. | ||
| Substantial increase in operating margin, to 8.6%. | ||
| Strong increase in attributable net income, to 20.9 million euros. |
| Balance sheet and cash flow statement |
| Solid free cash flow of 28.2 million euros, excluding non-recurring items. | ||
| Strong cash position improved, to 400.8 million euros. |
2 | Europe, Middle-East, Africa | |
3 | After adjusting for currency fluctuations, acquisitions and disposals. | |
4 | Includes 10.6 million euros of goodwill amortization and restructuring expenses in the third quarter 2004, and the expensing of stock options from the first quarter 2005. |
3/16 |
| Telecom |
| Record sales in Wireless: shipments up 43% year-on-year, to 87.6 million units. | ||
| Rapid development of 3G in Europe. | ||
| Sustained Wireless gross margin above 40%. | ||
| Substantial improvement in operating margin: up 2.4 percentage points to 15.1%. |
Adjusted | ||||||||||||||||
In millions of euros | Q3 2005 | Q3 2004 | % change | growth3 (%) | ||||||||||||
Wireless products & services net sales |
154.0 | 131.1 | +17.5 | % | ||||||||||||
Wireless gross profit |
62.3 | 50.3 | +23.9 | % | ||||||||||||
Wireless gross margin |
40.4 | % | 38.3 | % | +2.1 ppts | |||||||||||
Prepaid phone cards & scratchcards net sales |
13.5 | 22.1 | 39.0 | % | ||||||||||||
Prepaid phone cards & scratchcards gross profit |
0.9 | 1.4 | 35.1 | % | ||||||||||||
Prepaid phone cards & scratchcards gross margin |
6.7 | % | 6.3 | % | +0.4 ppt | |||||||||||
Telecom net sales |
167.5 | 153.2 | +9.3 | % | +7.3 | % | ||||||||||
Telecom gross profit |
63.2 | 51.7 | +22.3 | % | ||||||||||||
Telecom gross margin |
37.7 | % | 33.7 | % | +4.0 ppts | |||||||||||
Telecom operating expenses |
37.9 | 32.3 | +17.6 | % | ||||||||||||
As a % of sales |
22.6 | % | 21.0 | % | +1.6 ppt | |||||||||||
Telecom operating income |
25.3 | 19.4 | +30.2 | % | ||||||||||||
Operating margin |
15.1 | % | 12.7 | % | +2.4 ppt | |||||||||||
| Currency adjusted revenue increased 17.6% year-on-year. | ||
| Shipments rose 43% year-on-year to 87.6 million units, reflecting strong sales notably in the Americas and EMEA. | ||
| Product mix continued to improve: the share of high-end card shipments rose significantly year-on-year, accounting for 47% of the total in the third quarter 2005, compared with 30% a year ago. | ||
| Average selling price (ASP) was down 19.4% year-on-year and 2.4% quarter-on-quarter, both currency adjusted. |
4/16 |
| Financial Services |
| Accelerated EMV5 deployment in Continental Europe. | ||
| Positive operating income. |
Adjusted3 | ||||||||||||||||
In millions of euros | Q3 2005 | Q3 2004 | % change | change (%) | ||||||||||||
Net sales |
58.9 | 53.0 | +11.1 | % | +1.2 | % | ||||||||||
Gross profit |
13.7 | 10.1 | +36.2 | % | ||||||||||||
Gross margin as a % of sales |
23.3 | % | 19.0 | % | +4.3 | ppts | ||||||||||
Operating expenses |
13.1 | 24.9 | 47.4 | % | ||||||||||||
As a % of sales |
22.2 | % | 46.9 | % | 24.7 | ppts | ||||||||||
Operating income |
0.6 | 14.8 | NM | |||||||||||||
Operating margin as a % of sales |
1.1 | % | 27.9 | % | NM | |||||||||||
| Identity and Security |
| Revenue more than doubled year-on-year, reflecting the consolidation of Setec. | ||
| Strong organic revenue growth3: +51.2% | ||
| First shipments of e-passport datapages to be issued in Norway and Sweden, the first two countries in the world to issue mandatory e-passports nationwide. |
5 | EMV is a jointly defined set of specifications adopted by Europay, MasterCard and Visa for the migration of bank cards to smart card technology. |
5/16 |
Adjusted3 | ||||||||||||||||
In millions of euros | Q3 2005 | Q3 2004 | % change | change (%) | ||||||||||||
Net sales |
21.5 | 8.5 | +154.5 | % | +51.2 | % | ||||||||||
Gross profit |
5.9 | 2.2 | +162.5 | % | ||||||||||||
Gross margin as a % of sales |
27.4 | % | 26.6 | % | +0.8 | ppt | ||||||||||
Operating expenses |
10.5 | 7.0 | +50.1 | % | ||||||||||||
As a % of sales |
48.8 | % | 83.0 | % | 34.2 | ppts | ||||||||||
Operating income |
4.6 | 4.8 | NM | |||||||||||||
Operating margin as a % of sales |
21.3 | % | 56.2 | % | +34.9 | ppts | ||||||||||
| Net sales up 8.8%, robust growth in all core business. | ||
| Gross margin up 2.2 percentage points, to 33.2%. | ||
| Operating income grew fivefold, to 51 million euros. | ||
| Strong increase in attributable net income, to 50 million euros |
Adjusted3 | ||||||||||||||||
In millions of euros | YTD 2005 | YTD 2004 | % change | change (%) | ||||||||||||
Net sales |
677.2 | 622.5 | +8.8 | % | +5.6 | % | ||||||||||
of which Telecom |
474.9 | 453.9 | +4.6 | % | +4.0 | % | ||||||||||
of which Financial Services |
147.1 | 138.0 | +6.5 | % | +4.7 | % | ||||||||||
of which ID & Security |
55.2 | 30.6 | +80.4 | % | +41.6 | % | ||||||||||
Gross profit |
224.7 | 193.2 | +16.3 | % | NA | |||||||||||
Gross margin |
33.2 | % | 31.0 | % | +2.2 | ppts | NA | |||||||||
Operating expenses |
173.5 | 183.0 | 5.2 | % | NA | |||||||||||
As a % of sales |
25.6 | % | 29.4 | % | 3.8 | ppts | NA | |||||||||
Operating income |
51.1 | 10.2 | +400.8 | % | ||||||||||||
Operating margin |
7.6 | % | 1.6 | % | +6.0 | ppts | NA | |||||||||
Attributable net income |
49.9 | 7.1 | NM | |||||||||||||
6/16 |
| Financial Services |
6 | Dynamic Data Authentication: to reduce the risk of card fraud, EMV standard defined dynamic offline authentication mechanisms based on asymetric cryptography. DDA smart card authentication system generates a unique signature on every transaction, making it very difficult to copy. |
7/16 |
Press Gemplus Jane Strachey Tel: +33 (0) 4 42 36 46 61 Mob: +33 (0) 6 76 49 35 93 Email: jane.strachey@gemplus.com |
Investor Relations Gemplus Céline Berthier Tel: +41 (0) 22 544 5054 Email: celine.berthier@gemplus.com |
|
Edelman Frédéric Boullard Tel: +33 (0) 1 56 69 73 95 Email: frederic.boullard@edelman.com |
Fineo
Tel: +33 (0) 1 56 33 32 31 Email: investors@gemplus.com |
8/16 |
9/16 |
10/16 |
(in thousands of euros, except shares and per share amounts) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Net sales |
247,912 | 214,665 | 677,172 | 622,492 | ||||||||||||
Cost of sales |
(165,153 | ) | (150,702 | ) | (452,492 | ) | (429,255 | ) | ||||||||
Gross Profit |
82,759 | 63,963 | 224,680 | 193,237 | ||||||||||||
Research and development expenses |
(14,984 | ) | (15,253 | ) | (44,387 | ) | (47,699 | ) | ||||||||
Selling and marketing expenses |
(29,850 | ) | (23,982 | ) | (84,236 | ) | (74,364 | ) | ||||||||
General and administrative expenses |
(17,548 | ) | (14,313 | ) | (46,001 | ) | (46,597 | ) | ||||||||
Restructuring expenses |
606 | (8,638 | ) | 1,522 | (8,611 | ) | ||||||||||
Other operating income (expense), net |
279 | (1 | ) | (439 | ) | | ||||||||||
Goodwill amortization and impairment |
| (1,926 | ) | | (5,748 | ) | ||||||||||
Operating income |
21,262 | (150 | ) | 51,139 | 10,218 | |||||||||||
Financial income (expense), net |
1,894 | 1,482 | 5,370 | 4,289 | ||||||||||||
Share of profit (loss) of associates |
(360 | ) | (1,067 | ) | (1,193 | ) | (5,023 | ) | ||||||||
Other non-operating income (expense), net |
(27 | ) | (1,844 | ) | 71 | (4,599 | ) | |||||||||
Income before taxes |
22,769 | (1,579 | ) | 55,387 | 4,885 | |||||||||||
Income tax expense |
(1,457 | ) | (6,551 | ) | (4,403 | ) | (10,277 | ) | ||||||||
NET INCOME |
21,312 | (8,130 | ) | 50,984 | (5,392 | ) | ||||||||||
Attributable to: |
||||||||||||||||
Equity holders of the Company |
20,873 | (8,535 | ) | 49,876 | (7,132 | ) | ||||||||||
Minority interest |
439 | 405 | 1,108 | 1,740 | ||||||||||||
Net income per share attributable to equity
holders of the Company (in euros) |
||||||||||||||||
Basic |
0.03 | (0.01 | ) | 0.08 | (0.01 | ) | ||||||||||
Diluted |
0.03 | (0.01 | ) | 0.08 | (0.01 | ) | ||||||||||
Shares used in net income per share
calculation: |
||||||||||||||||
Basic |
627,085,562 | 606,882,853 | 615,046,595 | 606,584,841 | ||||||||||||
Diluted |
645,019,286 | 606,882,853 | 630,519,467 | 606,584,841 | ||||||||||||
11/16 |
(in thousands of euros) | ||||||||
September 30, | December 31, | |||||||
2005 | 2004 | |||||||
(unaudited) | ||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
400,826 | 388,430 | ||||||
Trade accounts receivable, net |
174,686 | 148,512 | ||||||
Inventory, net |
120,637 | 115,610 | ||||||
Derivative financial instruments |
5,393 | 33,387 | ||||||
Other current receivables |
78,708 | 66,160 | ||||||
Total current assets |
780,250 | 752,099 | ||||||
Non-current assets: |
||||||||
Property, plant and equipment, net |
158,863 | 148,916 | ||||||
Customer contracts and technology, net |
19,491 | | ||||||
Goodwill, net |
90,002 | 28,197 | ||||||
Deferred development costs, net |
22,755 | 19,222 | ||||||
Other intangible assets, net |
6,261 | 8,965 | ||||||
Deferred tax assets |
7,053 | 6,264 | ||||||
Investments in associates |
16,553 | 12,864 | ||||||
Available-for-sale financial assets, net |
2,554 | 4,752 | ||||||
Other non-current receivables, net |
47,781 | 43,900 | ||||||
Total non-current assets |
371,313 | 273,080 | ||||||
TOTAL ASSETS |
1,151,563 | 1,025,179 | ||||||
LIABILITIES |
||||||||
Current liabilities: |
||||||||
Accounts payable |
114,970 | 94,025 | ||||||
Derivative financial instruments |
3,795 | | ||||||
Salaries, wages and related items |
54,752 | 55,199 | ||||||
Current portion of provisions and other liabilities |
77,087 | 50,217 | ||||||
Current income tax liabilities |
30,454 | 25,708 | ||||||
Current obligations under finance leases |
5,688 | 6,005 | ||||||
Total current liabilities |
286,746 | 231,154 | ||||||
Non-current liabilities: |
||||||||
Non-current obligations under finance leases |
29,252 | 33,663 | ||||||
Non-current portion of provisions |
25,225 | 25,696 | ||||||
Other non-current liabilities |
17,219 | 13,353 | ||||||
Total non-current liabilities |
71,696 | 72,712 | ||||||
Shareholders equity: |
||||||||
Ordinary shares |
133,092 | 128,643 | ||||||
Additional paid-in capital |
1,062,616 | 1,031,558 | ||||||
Retained earnings |
(406,965 | ) | (459,560 | ) | ||||
Other comprehensive income |
(6,055 | ) | 11,956 | |||||
Less, cost of treasury shares |
(1,985 | ) | (1,985 | ) | ||||
Equity attributable to equity holders of the Company |
780,703 | 710,612 | ||||||
Minority interest |
12,418 | 10,701 | ||||||
Total shareholders equity |
793,121 | 721,313 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY |
1,151,563 | 1,025,179 | ||||||
12/16 |
(in thousands of euros) | ||||||||
Nine months ended | ||||||||
September 30, | ||||||||
2005 | 2004 | |||||||
(unaudited) | ||||||||
Cash flow from operating activities: |
||||||||
Net income (loss) |
50,984 | (5,392 | ) | |||||
Adjustments to reconcile net income (loss) to net cash from operating activities: |
||||||||
Depreciation, amortization and impairment |
30,035 | 43,905 | ||||||
Changes in non-current portion of provisions and other liabilities, excluding restructuring |
(292 | ) | (723 | ) | ||||
Deferred income taxes |
(1,559 | ) | 5,426 | |||||
(Gain) / loss on sale and disposal of assets |
(3,648 | ) | 827 | |||||
Share of (profit) loss of associates |
877 | 5,023 | ||||||
Other, net |
(2,018 | ) | (3,102 | ) | ||||
Changes in operating assets and liabilities: |
||||||||
Trade accounts receivable and related current liabilities |
(2,626 | ) | (3,123 | ) | ||||
Trade accounts payable and related current assets |
8,619 | 23,491 | ||||||
Inventories |
9,390 | (38,599 | ) | |||||
Value-added and income taxes |
145 | 19,147 | ||||||
Salaries, wages and other |
(9,335 | ) | 6,325 | |||||
Restricted cash |
23,277 | (21,952 | ) | |||||
Restructuring reserve payable |
(12,206 | ) | (14,010 | ) | ||||
Net cash (used for) from operating activities |
91,643 | 17,243 | ||||||
Cash flows from investing activities: |
||||||||
Sale /
(purchase) of activities net of cash (disposed) / acquired |
(63,401 | ) | | |||||
Other investments |
(1,463 | ) | (3,615 | ) | ||||
Purchase of property, plant and equipment |
(17,754 | ) | (15,239 | ) | ||||
Purchase of other assets |
(1,125 | ) | (1,042 | ) | ||||
Proceeds from sale of non-current assets |
4,803 | |||||||
Change in non-trade accounts payable and other |
3,299 | 2,872 | ||||||
Net cash used for investing activities |
(75,641 | ) | (17,024 | ) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from exercise of share options |
1,817 | 1,288 | ||||||
Payments on long-term borrowings |
(176 | ) | (6 | ) | ||||
Proceeds from sales-leaseback operations |
| 957 | ||||||
Principal payments on obligations under finance leases |
(4,441 | ) | (4,331 | ) | ||||
Increase (decrease) in bank overdrafts |
(551 | ) | 377 | |||||
Dividends paid by subsidiaries to minority shareholders |
(1,307 | ) | (1,214 | ) | ||||
Changes in
non-trade accounts payables on financing activities |
347 | | ||||||
Net cash
(used for) from financing activities |
(4,311 | ) | (2,929 | ) | ||||
Effect of exchange rate changes on cash |
705 | 1,211 | ||||||
Net increase (decrease) in cash and cash equivalents |
11,691 | (2,709 | ) | |||||
Cash and cash equivalents, beginning of the period |
388,430 | 390,684 | ||||||
Cash and cash equivalents, end of the period |
400,826 | 389,186 | ||||||
13/16 |
Three months ended | (in millions of euros) | |||||||||||||||||||
September | September | Adjusted | ||||||||||||||||||
Net sales | 30, 2005 | 30, 2004 | % change | change (%) (*) | ||||||||||||||||
Telecommunications |
167.5 | 153.2 | 9 | % | 7 | % | ||||||||||||||
Financial Services |
58.9 | 53.0 | 11 | % | 1 | % | ||||||||||||||
Identity and Security |
21.5 | 8.5 | 155 | % | 51 | % | ||||||||||||||
Total |
247.9 | 214.7 | 15 | % | 8 | % | ||||||||||||||
(in millions of euros) | ||||||||||||||||||||
September | (% of net | September | (% of net | |||||||||||||||||
Gross profit | 30, 2005 | sales) | 30, 2004 | sales) | % change | |||||||||||||||
Telecommunications |
63.2 | 38 | % | 51.7 | 34 | % | 22 | % | ||||||||||||
Financial Services |
13.7 | 23 | % | 10.1 | 19 | % | 36 | % | ||||||||||||
Identity and Security |
5.9 | 27 | % | 2.2 | 27 | % | 162 | % | ||||||||||||
Total |
82.8 | 33 | % | 64.0 | 30 | % | 29 | % | ||||||||||||
(in millions of euros) | ||||||||||||||||||||
September | (% of net | September | (% of net | |||||||||||||||||
Operating expenses | 30, 2005 | sales) | 30, 2004 | sales) | % change | |||||||||||||||
Telecommunications |
(37.9 | ) | 23 | % | (32.2 | ) | 21 | % | 18 | % | ||||||||||
Financial Services |
(13.1 | ) | 22 | % | (24.9 | ) | 47 | % | 47 | % | ||||||||||
Identity and Security |
(10.5 | ) | 49 | % | (7.0 | ) | 83 | % | 50 | % | ||||||||||
Total |
(61.5 | ) | 25 | % | (64.1 | ) | 30 | % | 4 | % | ||||||||||
(in millions of euros) | ||||||||||||||||||||
Change in | ||||||||||||||||||||
September | September | Operating | ||||||||||||||||||
Operating income (loss) | 30, 2005 | 30, 2004 | income (loss) | |||||||||||||||||
Telecommunications |
25.3 | 19.4 | 5.8 | |||||||||||||||||
Financial Services |
0.6 | (14.8 | ) | 15.4 | ||||||||||||||||
Identity and Security |
(4.6 | ) | (4.8 | ) | 0.2 | |||||||||||||||
Total |
21.3 | (0.2 | ) | 21.4 | ||||||||||||||||
(*) | Adjusted for currency fluctuations, disposals & acquisitions |
Three months ended | (in millions of euros) | |||||||||||||||||||
September | September | Adjusted | ||||||||||||||||||
Net sales | 30, 2005 | 30, 2004 | % change | change (%) (*) | ||||||||||||||||
Europe, Middle East and Africa |
133.3 | 115.0 | 16 | % | 2 | % | ||||||||||||||
Asia |
39.2 | 44.5 | 12 | % | 14 | % | ||||||||||||||
Americas |
75.4 | 55.2 | 37 | % | 37 | % | ||||||||||||||
Total |
247.9 | 214.7 | 15 | % | 8 | % | ||||||||||||||
(*) | Adjusted for currency fluctuations, disposals & acquisitions |
14/16 |
Nine months ended | (in millions of euros) | |||||||||||||||||||
September | September | Adjusted | ||||||||||||||||||
Net sales | 30, 2005 | 30, 2004 | % change | change (%) (*) | ||||||||||||||||
Telecommunications |
474.9 | 453.9 | 5 | % | 4 | % | ||||||||||||||
Financial Services |
147.1 | 138.0 | 7 | % | 5 | % | ||||||||||||||
Identity and Security |
55.2 | 30.6 | 80 | % | 42 | % | ||||||||||||||
Total |
677.2 | 622.5 | 9 | % | 6 | % | ||||||||||||||
(in millions of euros) | ||||||||||||||||||||
September | (% of net | September | (% of net | |||||||||||||||||
Gross profit | 30, 2005 | sales) | 30, 2004 | sales) | % change | |||||||||||||||
Telecommunications |
176.9 | 37 | % | 156.5 | 34 | % | 13 | % | ||||||||||||
Financial Services |
29.7 | 20 | % | 28.0 | 20 | % | 6 | % | ||||||||||||
Identity and Security |
18.1 | 33 | % | 8.7 | 29 | % | 107 | % | ||||||||||||
Total |
224.7 | 33 | % | 193.2 | 31 | % | 16 | % | ||||||||||||
(in millions of euros) | ||||||||||||||||||||
September | (% of net | September | (% of net | |||||||||||||||||
Operating expenses | 30, 2005 | sales) | 30, 2004 | sales) | % change | |||||||||||||||
Telecommunications |
(114.1 | ) | 24 | % | (109.9 | ) | 24 | % | 4 | % | ||||||||||
Financial Services |
(30.7 | ) | 21 | % | (50.3 | ) | 36 | % | 39 | % | ||||||||||
Identity and Security |
(28.7 | ) | 52 | % | (22.8 | ) | 75 | % | 26 | % | ||||||||||
Total |
(173.5 | ) | 26 | % | (183.0 | ) | 29 | % | 5 | % | ||||||||||
(in millions of euros) | ||||||||||||||||||||
Change in | ||||||||||||||||||||
September | September | Operating | ||||||||||||||||||
Operating income (loss) | 30, 2005 | 30, 2004 | income (loss) | |||||||||||||||||
Telecommunications |
62.8 | 46.5 | 16.3 | |||||||||||||||||
Financial Services |
(1.1 | ) | (22.2 | ) | 21.1 | |||||||||||||||
Identity and Security |
(10.6 | ) | (14.1 | ) | 3.5 | |||||||||||||||
Total |
51.1 | 10.2 | 40.9 | |||||||||||||||||
(*) | Adjusted for currency fluctuations, disposals & acquisitions |
Nine months ended | (in millions of euros) | |||||||||||||||||||
September | September | Adjusted | ||||||||||||||||||
Net sales | 30, 2005 | 30, 2004 | % change | change (%) (*) | ||||||||||||||||
Europe, Middle East and Africa |
353.6 | 320.9 | 10 | % | 3 | % | ||||||||||||||
Asia |
127.2 | 147.8 | 14 | % | 14 | % | ||||||||||||||
Americas |
196.4 | 153.8 | 28 | % | 31 | % | ||||||||||||||
Total |
677.2 | 622.5 | 9 | % | 6 | % | ||||||||||||||
(*) | Adjusted for currency fluctuations, disposals & acquisitions |
15/16 |
GEMPLUS INTERNATIONAL S.A. |
||||
Date: 26 October, 2005 |
||||
By: | /s/ Frans SPAARGAREN | |||
Name: | Frans SPAARGAREN | |||
Title: | Chief Financial Officer | |||
16/16 |