Revenue from Ongoing operations at €2 billion, up by 9% at constant rate
Profit from Ongoing operations at €239 million, increases by 15%
New products and services drive strong profit expansion in Mobile Communication
Secure Transactions and Security outperform their profit margin objectives
(BUSINESS WIRE)-- Regulatory News:
The income statement is presented on an adjusted basis (see page 2 “Basis of preparation of financial information”). 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. The reconciliation with the IFRS income statement is presented in Appendix 2. The balance sheet is prepared in accordance with IFRS, and the cash position variation schedule is derived from the IFRS cash flow statement.
Gemalto (Euronext NL0000400653 - GTO), the world leader in digital security today announces its results for the full year 2011.
Key figures of the adjusted income statement
Year-on-year variations
€in millions
Full year 2011
Full year 2010
at historical exchange rates
at constant exchange rates
Ongoing operations
Revenue
2000
1862
+7%
+9%
Gross profit
747
676
+11%
Operating expenses
(509)
(468)
+10%
Profit from operations
239
207
+15%
Profit margin
11.9%
11.1%
+0.8 ppt
Other operations
Revenue
15
44
Profit from operations
17
8
All operations
Total revenue
2015
1906
+6%
+8%
Total profit from operations
256
216
+19%
Olivier Piou, Chief Executive Officer, commented: “In 2011, halfway through our strategic plan, we clearly outperformed our objectives. Secure Transactions and Security have become double-digit profit margin businesses, with strong growth and scale effects. Mobile Communication is back to revenue and profit expansion, benefitting from our investments in software and services. Consequently, the combined profit from operations of our four main segments1grew by 28% in 2011. These results provide a strong base for the second part of our plan. We will continue along our strategy of transformation and expansion in the growing market of digital security, and have confidence in reaching our €300 million profit from operations target in 2013.”
1The four main segments are the Mobile Communication, Machine-to-Machine, Secure Transactions, and Security business segments. They represented almost all the Company revenue in 2011 and in 2010.
Basis of preparation of financial information
In this press release, the information for the full year of both 2011 and 2010 is presented for Ongoing operations and under the 2011 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). To better assess its past and future performance, the Company also prepares an adjusted income statement where the key metric used to evaluate the business and take operating decisions over the period 2010 to 2013 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 stock options and 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.
The 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 also provides an adjusted income statement for “Ongoing operations” for both 2011 and 2010 reporting periods.
Ongoing operations: The adjusted income statement for “Ongoing operations” not only excludes, as per the IFRS income statement, the contribution from discontinued operation to the income statement, but also the contributions from assets classified as held for sale and from other items not related to Ongoing operations.
Assets held for sale: The assets of one of the Company joint ventures (the “JV”) active in China in Secure Transactions and Security, and for which shareholding restructuring agreement has been completed with the partner.
Discontinued operation: The disposal of the Company business in point of sale (“POS”) terminals to Verifone was effective on December 31, 2010. As per IFRS, the contribution of this activity to the IFRS income statement is reclassified for 2010 and 2011 reporting periods and its net contribution is presented on the line item “Profit (loss) from discontinued operation (net of income tax)”. Consequently, in the adjusted income statement, the contribution of POS and the impact of the transaction are not included in the profit from operations.
The Appendix 1 bridges the adjusted income statement, with the discontinued operation, assets held for sales and adjusted income statement for Ongoing operations.
Basis of presentation of the segment information starting 2011
Starting January 1, 2011, the segment information accounts for the following changes:
the patent licensing activity, previously reported as part of the segment Security, is reported separately, in a new segment “Patents”.
the public telephony activity, which is reaching end of life as it is now almost fully substituted by mobile telephony, previously reported in the segment Others, is included in the segment Mobile Communication.
In this press release the financial information for 2010 is presented pro-forma on the above basis of presentation.
To view the full report and tables please click here.
Contacts
Investor Relations
Gabriel Rangoni, +33(0) 6 1426 6956
gabriel.rangoni@gemalto.com
Corporate Communication
Isabelle Marand, +33(0) 6 1489 1817
isabelle.marand@gemalto.com
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