ג'מלטו תוצאות כספיות לשנת 2015

Gemalto full year 2015 results

 

-- Full year revenue of [Eur]3.1 billion, up +16%, and profit from operations up +10%, at [Eur]423 million

-- Revenue in Payment & Identity at [Eur]1.8 billion, represents 58% of the total sales

-- Platforms & Services revenue reaches [Eur]898 million, up +70%

-- Free cash flow generation accelerated over the year, with [Eur]233 million in the second semester

 

 

 

To better assess past and future performance, the income statement is presented on an adjusted basis and variations in revenue figures above and in this document are 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. Reconciliation with the IFRS income statement is presented in Appendix 1. 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. All figures in this press release are unaudited.

 

AMSTERDAM, The Netherlands, March 4, 2016 (GLOBE NEWSWIRE):

 

Gemalto (Euronext NL0000400653 - GTO), the world leader in digital security today announces its results for the full year 2015.

 

Key figures of the adjusted income statement

Year-on-year variations

at historical   at constant

 

([Eur] in millions)     Full year 2015                 Full year 2014                 exchange rates  exchange rates

----------------------------------------------------------------------------------------------------------

Revenue                      3,122                         2,465                           +27%            +16%

Gross profit                 1,216                           952                           +28%

Operating expenses           (793)                         (569)                           +39%

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Profit from operations       423                             383                           +10%

  1. Profit margin                13.5%                         15.5%

 

Olivier Piou, Chief Executive Officer, commented: "2015 illustrates the structural transformation and successful diversification of the Company. Payment is now clearly the largest business of the Company; the Enterprise portfolio is aligned following SafeNet integration; Government Programs is back to rapid growth with a solid win rate; adjustments are supporting the SIM activity evolution; and the Machine-to-Machine business continues to expand rapidly. In a challenging 2015 Mobile environment, Gemalto demonstrated the resilience of its business model with another double digit expansion in profit from operations and strong cash generation. Entering the second part of our multi-year development plan we will focus in 2016 on expanding our gross margin, progressively optimizing our main segments' performance en route to our 2017 objectives."

 

 

              Basis of preparation of financial information

 

 

Segment information

 

The Mobile segment reports on businesses associated with mobile cellular technologies including Machine-to-Machine, mobile secure elements (SIM, embedded secure element) and mobile Platforms & Services. The Payment & Identity segment reports on businesses associated with secure personal interactions including Payment, Government Programs and Enterprise. The SafeNet acquisition is part of the Enterprise business.

 

In addition to this segment information the Company also reports revenues of Mobile and Payment & Identity by type of activity: Embedded software & Products (E&P) and Platforms & Services (P&S).

 

Historical exchange rates and constant currency figures

 

The Company sells its products and services in a very large number of countries and is commonly remunerated in other currencies than the Euro. Fluctuations in these other currencies exchange rates against the Euro have in particular a translation impact on the reported Euro value of the Company revenues. Comparisons at constant exchange rates aim at eliminating the effect of currencies translation movements on the analysis of the Group revenue by translating prior-year revenues at the same average exchange rate as applied in the current year. Revenue variations are at constant exchange rates and include the impact of currencies variation hedging program, except where otherwise noted. All other figures in this press release are at historical exchange rates, except where otherwise noted.

 

Pro forma figures

 

Following the acquisition of SafeNet and for a better understanding of the year-on-year evolution of the business, the Company presents the 2014 Gemalto segment and activity pro forma figures as if SafeNet had been consolidated for the full year 2014 period and year-on-year variations between these 2014 pro forma figures and 2015 figures as if SafeNet had been consolidated starting from January 1, 2015. The difference between 2015 actual figures and 2015 pro forma figures corresponds to the SafeNet contribution from January 1st, 2015 to January 7th, 2015, the actual transaction closing date. SafeNet's pro forma figures used in this document were translated into Euro using monthly currency conversion rates. Variations of pro forma revenue figures are at constant exchange rates and exclude the impact of our hedging program on currencies variation for 2014 and 2015.

 

Overall pro forma growth includes the 2015 organic growth coming from SafeNet activities. This metric aims at giving a fair view of the operational performance of the Company, including the ensuing synergies generated by the acquisition.

 

Adjusted income statement and profit from operations (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 make operating decisions over the period 2010 to 2017 is the profit from operations (PFO).

 

PFO is a non-GAAP measure defined as IFRS operating profit adjusted for (i) the amortization and depreciation of intangibles resulting from acquisitions, (ii) restructuring and acquisition-related expenses, (iii) all equity-based compensation charges and associated costs; and (iv) fair value adjustments upon business acquisitions. These items are further explained as follows:

 

*T

  -- 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.

 

  -- 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).

 

 

  -- Equity-based compensation charges are defined as (i) the discount granted to employees acquiring Gemalto shares under Gemalto Employee Stock Purchase plans; (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.

 

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

 

These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable IFRS measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with IFRS.

 

In the adjusted income statement, Operating Expenses are defined as the sum of Research and Engineering expenses, Sales and Marketing expenses, General and Administrative expenses, and Other income (expense) net.

 

EBITDA is defined as PFO plus depreciation and amortization expenses, excluding the above amortization and depreciation of intangibles resulting from acquisitions.

 

 

Adjusted financial information

 

 

The consolidated financial statements are prepared in accordance with 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.

 

([Eur] in millions)           Full year 2015      Full year 2014

----------------------------------------------------------------------------------------------------

Year-on-year variation at

Extract of the

adjusted income statement            As a % of           As a % of     historical        constant

revenue             revenue    exchange rates   exchange rates

----------------------------------------------------------------------------------------------------

  1. Revenue                     3,121.6             2,465.2                   +27%             +16%
  2. Gross profit                1,215.9    39.0%     952.2     38.6%        +0.3 ppt
  3. Operating expenses          (793.3)   (25.4%)   (569.5)   (23.1%)      (2.3 ppt)
  4. EBITDA                       546.9     17.5%     478.6     19.4%          +14%

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  1. Profit from operations       422.6     13.5%     382.7     15.5%         +10.4%

----------------------------------------------------------------------------------------------------

  1. Net profit                   303.5      9.7%     315.3     12.8%          (4%)

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([Eur])

  1. Basic Earnings per share     3.45                3.64                     (5%)
  2. Diluted Earnings per share   3.41                3.55                     (4%)

 

Total revenue for 2015 came in at [Eur]3,122 million. Strong growth in Payment, Government Programs and Machine-to-Machine, coupled with the addition of SafeNet drove the revenue expansion of +27% at historical exchange rates and +16% at constant exchange rates.

 

Full year 2015         SafeNet  Pro forma   Hedge     Currencies            Revenue growth

(in percentage points)          addition   growth    effect  variation effect  at historical exchange rates

Contributions to total .

year-on-year revenue variation    +12%       +6%      (2%)          +9%                    +27%

 

The total Company's year-on-year revenue growth was +6% pro forma. SafeNet's combination added 12 percentage points to the 2014 reported sales. The substantial strengthening of the US dollar versus Euro compared to 2014 and the now larger part of the Company's US dollar denominated revenue generated a 9 percentage point difference between revenue growth at historical and at constant exchange rates. This difference was partly reduced by the currency variation protection hedging program that induced a (2) percentage point reduction on the reported sales.

 

Embedded software & Products (E&P) revenue grew by +3%. Payment cards represented the largest part of the E&P expansion. High demand for connectivity and security modules for the Internet of Things (IoT) and strong deliveries in Government Programs also notably contributed to the E&P revenue increase. E&P activity in the Mobile segment reduced due to lower year-on-year SIM sales following the closure of the major US wireless carriers' payment venture, and to a lesser extent to lower demand in Latin America and Asia in the second semester.

 

In Platforms & Services (P&S), sales were up by +70%, due to further revenue expansion in payment issuance services, to growth in eGovernment services and to SafeNet's contribution to the Enterprise business. These increases largely exceeded the reduced Mobile Financial Services revenue coming from the United States.

 

Globally, 2015 revenue growth illustrated the structural transformation and successful diversification of the Company. Gemalto posted a +6% pro forma revenue growth though sales of SIM and Mobile related services declined by an unusual (15%) year-on-year during the period.

 

Gross profit was up by [Eur]264 million, to [Eur]1,216 million, representing a gross margin of 39%, up +0.3 percentage point year-on-year. The increase in gross profit in the Payment and Government Programs businesses more than offset the lower contribution from the Mobile segment.

 

Operating expenses were up by 2.3 percentage point of revenue to 25.4%, at ([Eur]793) million. The increase came primarily from the addition of SafeNet, running at a higher percentage of operating expenses than Gemalto's historical business, and from currency translation effects, which outweighed the absence of variable pay-out to management and employees related to profit from operations.

 

As a result, 2015 profit from operations came in at [Eur]423 million, representing 13.5% profit margin and up [Eur]40 million, +10.4% year-on-year.

 

Gemalto's financial income was ([Eur]38) million compared to ([Eur]12) million for 2014. Interest expense and amortized costs on the public bond, private placements and credit lines facilities amounted to ([Eur]13) million and foreign exchange transactions and other financial items amounted to ([Eur]24) million.

 

Share of profit in associates was [Eur]2 million for the full year 2015. As a result, adjusted profit before income tax came in at [Eur]387 million compared to [Eur]370 million the previous year, an increase of +5%.

 

Adjusted income tax expense increased to ([Eur]83) million, compared to ([Eur]54) million the previous year, as Gemalto tax rate is progressively converging toward its expected normative effective tax rate level.

 

Overall, the 2015 adjusted net profit for the Company was [Eur]303 million, lower by [Eur]12 million when compared to 2014.

 

Adjusted basic earnings per share came in at [Eur]3.45, and adjusted diluted earnings per share at [Eur]3.41, compared to 2014 adjusted basic earnings per share of [Eur]3.64 and adjusted diluted earnings per share of [Eur]3.55.

 

*T

IFRS results

 

Fair value adjustments, mainly the non-cash amortization of the IFRS revaluation of SafeNet's pre-acquisition inventories and deferred revenue at their realizable value, accounted for ([Eur]71) million for the full year 2015. It was ([Eur]67) million for the first semester 2015, ([Eur]4) million for the second semester, and null in 2014. Amortization and depreciation of intangibles resulting from acquisitions, another non-cash element, came in at ([Eur]61) million versus ([Eur]27) million in 2014, also mainly due to the SafeNet acquisition. Restructuring and acquisition-related expenses increased to ([Eur]49) million versus ([Eur]30) million year-on-year, due to the acquisitions and to the restructuring of the Mobile Platforms & Services business and data centers. The equity-based compensation charge was reduced by ([Eur]17) million year-on-year, to ([Eur]39) million, as the Company long-term incentive plans are aligned with the multi-year development plan objectives and conditional on a set of cumulative progress indicators over the period.

 

The IFRS income tax rate came in at 18% for the year, up 4 percentage points versus 2014.

 

As a result, Gemalto recorded an IFRS operating profit (EBIT) of [Eur]203 million for 2015 compared to [Eur]270 million in 2014 and an IFRS net profit of [Eur]137 million for 2015 versus [Eur]221 million in 2014. IFRS basic earnings per share and diluted earnings per share came in at [Eur]1.56 and [Eur]1.54 respectively in 2015, compared to [Eur]2.55 and [Eur]2.49 respectively in 2014.

 

 

  Statement of financial position and cash position variation schedule

 

 

For the full year 2015, Gemalto operating activities generated a cash flow before changes in working capital of [Eur]443 million, up +12%, compared to the [Eur]394 million generated in 2014. Change in working capital had a [Eur]65 million positive impact on the cash flow in 2015 compared to an ([Eur]81) million negative impact in 2014. Net trade receivables and payables improved year-on-year mainly from better cash collection, advance payments received as well as customer payments which had been delayed from 2014 to 2015.

 

The hedging currency protection program generated a cash outflow of ([Eur]124) million in 2015 which will be recovered within the next three years. Capital expenditure and acquisition of intangibles amounted to ([Eur]185) million, i.e. 5.9% of revenue. Property, Plant, and Equipment assets accounted for ([Eur]98) million of investment in 2015, compared to ([Eur]81) million in 2014, to support the fast growing businesses, particularly in the United States. Acquisition and Capitalization of development expenses represented ([Eur]88) million, with capitalization of development expenses representing 1.7% of revenue in 2015 compared to 1.5% in 2014.

 

Excluding the ([Eur]124) million prepaid derivative for hedging currency protection payment, free cash flow from operations increased by +74% at [Eur]293 million in 2015 compared to [Eur]169 million in 2014. When including this prepaid derivative payment, free cash flow from operations was [Eur]233 million in the second semester, leading to [Eur]170 million for the full year of 2015.

 

Cash outflow related to acquisitions, net of cash acquired, was ([Eur]897) million in 2015 versus ([Eur]84) million in 2014, mostly due to the acquisitions of SafeNet and Trub.

 

On May 24, 2015, Gemalto paid a cash dividend of [Eur]0.42 per share in respect of the fiscal year 2014, up +11% on the dividend paid in 2014. This distribution used [Eur]37 million in cash.

 

Gemalto's share buy-back program had no impact on the cash position in 2015 and the independently managed liquidity program generated a ([Eur]3) million cash outflow. As at December 31, 2015, the Company held 903,717 of its own shares in treasury, representing 1.0% of its issued and paid-up share capital. The total number of shares issued increased by +991,865 in 2015 to 89,007,709 as announced in first semester and, net of the 903,717 shares held in treasury, 88,103,992 shares were outstanding as at December 31, 2015. The average acquisition price of the shares repurchased on the market by the Company held in treasury as at December 31, 2015 was [Eur]40.20.

 

Net proceeds from financing activities generated a [Eur]117 million cash inflow, mainly coming from private placement loan issuances, credit line drawdown, financing of US operations and proceeds received by the Company from the exercise of stock options by employees.

 

Gemalto's cash and cash equivalents as at December 31, 2015 was [Eur]405 million. It was [Eur]1,057 million at the end of 2014. The current and non-current borrowings excluding bank overdrafts were [Eur]740 million.

 

As a result in particular of the ([Eur]897) million cash outflow from acquisitions, partly offset by the operating cash generation acceleration, the Company's financial position moved to a net debt position of [Eur]335 million as at December 31, 2015 from a [Eur]493 million net cash position at the end of 2014.

 

Segment information

 

Revenue              Payment &                Total        Patents &

([Eur] in millions)   Identity  Mobile  two main segments   Others    Total

---------------------------------------------------------------------------

Fourth quarter          510      338           847             6       854

At constant rates       +44%     (15%)         +13%          +383%     +13%

At historical rates     +53%     (9%)          +20%          +383%     +21%

---------------------------------------------------------------------------

Full Year              1,818     1,279        3,097           25      3,122

At constant rates       +45%     (10%)         +16%           +43%     +16%

At historical rates     +57%     (1%)          +27%           +43%     +27%

---------------------------------------------------------------------------

 

During the fourth quarter, revenue expanded by +13% at constant exchange rates and +21% at historical exchange rates. In Mobile, similar trends as the previous quarter were observed, with lower (15%) revenue mostly due to lower SIM and related services sales in the United States. In the fourth quarter, growth in Payment & Identity was +44% at constant exchange rates and +53% at historical exchange rates, with lower year-on-year sales of payment cards in China.

 

*T

Embedded                                               

software &  Platforms &  Total two main  Patents &

Full year 2015                                                Products    Services      activities     Others    Total

----------------------------------------------------------------------------------------------------------

Revenue                                                         2,199        898           3,097         25      3,122

Year-on-Year revenue growth                                     +3%         +70%           +16%          +43%     +16%

As a percentage of total revenue                                70%          29%           99%           1%       100%

As a percentage of total revenue growth at constant

exchange rates                                                 14%          84%           98%           2%       100%

 

Activities within Embedded software & Products and Platforms & Services both contributed to the revenue growth of Gemalto in 2015, up by +3% and +70% respectively (and up +1% and +11% respectively on a pro forma basis). Growth in Embedded software & Products came mostly from Payment, Machine-to-Machine and Government Programs. Platforms & Services increase in revenue was driven by higher Payment issuance services, especially in the United States, expansion in Government Programs and the contribution of SafeNet to the Enterprise business, which largely offset the lower Mobile Financial Services revenue generated in 2015. Platforms & Services contributed 84% of the total Company revenue growth in 2015.

 

  Profit from operations                                              Total              Payment &       

  ([Eur] in millions)                                      (including Patents & Others)   Identity  Mobile

  --------------------------------------------------------------------------------------------------------

  Second semester                                                       263                 161      101 

  As a percentage of the full year profit from operations               62%                 68%      59% 

  Year-on-year variation                                                =                   +81%     (41%)

  --------------------------------------------------------------------------------------------------------

  Full year                                                             423                 239      172 

  Year-on-year variation                                               +10%                 +68%     (27%)

 

Full year profit from operations increased by +10.4% year-on-year. The lower profit from operations contribution of the Mobile segment was more than offset by the Payment & Identity segment performance, up +68% compared to 2014. Profit from operations increased in all Payment & Identity businesses, stemming from EMV migration in the United States for Payment, the initial SafeNet synergies in Enterprise and strong deliveries in Government Programs.

 

Payment & Identity

 

                                 Full year 2015                Full year 2014             Year-on-year variation   

  ------------------------------------------------------------------------------------------------------------------

                                             As a % of                     As a % of   at historical   at constant 

                          [Eur] in millions   revenue   [Eur] in millions   revenue   exchange rates  exchange rates

  ------------------------------------------------------------------------------------------------------------------

  1.   Revenue                      1,818.4                       1,158.3                       +57%            +45%    
  2.   Gross profit                  698.3          38.4%          386.2          33.3%       +5.1 ppt                  
  3.   Operating expenses           (459.6)        (25.3%)        (244.2)        (21.1%)      (4.2 ppt)                 
  4.   Profit from operations        238.7          13.1%          142.0          12.3%         +68%                    

 

 

Payment & Identity's full year revenue came in at [Eur]1,818 million, increasing by +45% at constant exchange rates compared to 2014 and up +16% pro forma SafeNet. The segment's Embedded software & Products sales were up by +18% at [Eur]1,168 million and its Platforms & Services sales more than doubled to [Eur]650 million.

 

The Payment business grew by +23% in 2015 versus 2014. The Americas posted the largest growth, with revenue almost doubling compared to previous year on strong sales of EMV payment cards and rapid expansion of issuance services in the United States. Payment Embedded software & Products sales grew by +19% and Payment Platforms & Services revenue expanded by +40% compared to 2014 at constant exchange rates.

 

Revenue from the Enterprise business came in at [Eur]425 million in 2015 with expansion coming from the addition of SafeNet and from the sustained market demand for cybersecurity, software protection and software monetization solutions. The alignment of authentication portfolios between the Identity Access Management business and SafeNet is on track. The trend in revenue mix in authentication and data protection continues to move towards a higher proportion of software and services, and to gross profit increasing faster than revenue. On a pro forma basis this evolution had led to a gross margin increase of +2 percentage points in Enterprise compared to 2014.

 

Revenue from the Government Programs business came in at [Eur]391 million, up +24% at constant exchange rates compared to 2014. Sales expansion came from delivery commencements of previously won projects while at the same time project backlog continued to expand, and from the [Eur]45 million contribution of Trub AG, a Swiss provider of identification solutions acquired in the second quarter of 2015. Government Programs Embedded software & Products revenue was up +19% and Government Programs Platforms & Services sales were up +44% in 2015 compared to 2014.

 

The steep business ramp-up in the United States led to an unusually high dedication of resources, yet the Payment & Identity segment gross margin as a whole improved to 38%, up +5.1 percentage points compared to 2014, due to the strong Platforms & Services expansion in the segment.

 

Operating expenses grew to ([Eur]460) million in 2015, in large part due to the acquisitions additions, and to a lesser extent to the currency translation effects as well as the shift of internal resources to the segment in order to effectively capture the rapid growth of its different businesses.

 

As a result profit from operations in Payment & Identity came in at [Eur]239 million, up +68% from the [Eur]142 million recorded in 2014, leading to a 13.1% profit margin from operations, up +0.9 percentage points.

 

Mobile

 

Full year 2015                Full year 2014             Year-on-year variation

--------------------------------------------------------------------------------------------------------

As a % of                     As a % of   at historical   at constant

[Eur] in millions   revenue   [Eur] in millions   revenue   exchange rates  exchange rates

---------------------------------------------------------------------------------------------------------

  1. Revenue                      1,278.5                       1,289.6                       (1%)            (10%)
  2. Gross profit                  494.5          38.7%          550.2          42.7%       (4.0 ppt)
  3.   Operating expenses           (322.2)        (25.2%)        (313.3)        (24.3%)      (0.9 ppt)                 
  4.   Profit from operations        172.4          13.5%          236.9          18.4%         (27%)                   

 

 

The Mobile segment recorded annual revenue of [Eur]1,279 million, (1%) lower year-on-year at historical exchange rates and (10%) at constant exchange rates.

 

Embedded software & Products revenue for the segment came in at [Eur]1,030 million, stable at historical exchange rates and (10%) lower compared to 2014 at constant exchange rates. The SIM business reduced by (17%) in 2015 compared to 2014, with a (23%) year-on-year reduction in the fourth quarter, mainly due to the United States operators' mobile payment venture closing as earlier announced, coupled with lower demand in Latin America and Asia. Revenue derived from SIM products now represents less than one quarter of total company revenues. The Machine-to-Machine business on the other hand continued to grow rapidly, by +18% year-on-year, due to the expanding global demand of connected devices and embedded secure elements for the Internet of Things (IoT).

 

Platforms & Services revenue for the segment came in at [Eur]248 million, lower by (8%) as Mobile Financial Services revenue decreased year-on-year due to lower mobile payment business in the United States, as announced earlier. On a global perspective, in 2015 Gemalto Mobile Financial Services achieved several key milestones to interconnect different technologies, devices and actors. In particular, Gemalto announced its partnership with Samsung to accelerate the deployment of Samsung Pay in Europe. Gemalto's Trusted Service Hub offers payment issuers a one stop connection for lifecycle management of pa