Gemalto NV — FY2008 Earnings Presentation
20 slides from Gemalto NV's earnings presentation, Mar 19, 2009
Slide 1: Full Year 2008 Earnings
Full Year 2008 Earnings Olivier Piou, CEO Jacques Tierny, CFO March 19, 2009 www.gemalto.com
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements 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, st
Slide 3: Overview
Overview Olivier Piou, CEO Financial Results Moving Forward 3
Slide 4: Full year 2008 results highlights
Full year 2008 results highlights Operating income doubled to € 169 million Profit improvements in all main segments Merger objective of 10% EBIT margin achieved Resilience through a diversified portfolio Strong operating cash flows of € 191 million Net cash position of € 344 million E
Slide 5: Market developments
Market developments 2008 was marked by a notable increase in operators’ interest in developing mobile services leveraging the SIM card as a key relationship tool with end-users. We have the world’s most widespread installed base and we continue to work with our customers to develop and deploy a grow
Slide 6: Showcasing our solutions for mobile services
Showcasing our solutions for mobile services User-Centric Applications SIMessenger Mobile Banking Personal Data Protection Operational Services Roaming Optimization Device Management MNO Portal Management Advanced Innovations Traffic Optimization NFC Mobile Contactless Mobile2PC Co
Slide 7: Financial Results
Overview Financial Results Jacques Tierny, CFO Moving Forward 7
Slide 8: Adjusted and IFRS results reconciliation
Adjusted and IFRS results reconciliation Gemalto presents income statements on an Adjusted basis for a better appreciation of its operating performance over the period, as IFRS 3 “Business Combinations” has several significant impacts on financial statements. Less: Reorganization Amortization Adjust
Slide 9: Timing of one-off costs and related cash outflows
Timing of one-off costs and related cash outflows (estimates; updated December 31, 2008) Estimates H2 '06 H1 '07 H2 '07 H1 '08 H2 '08 H1 '09 H2 '09 € 0m € (6m) € (5m) € (6m) € (10m) € (11.7m) € (15m) € (16m) € (15m) € (16.5m) € (20m) € (20m) € (24m) € (30m) € (29m) € (30m) € (40m) One‐off costs reco
Slide 10: Financial results reflect operational improvements
Financial results reflect operational improvements Extracts from Gemalto FY 2008 Adjusted Income Statement Revenue € 1,680m + 6%* Gross Profit Gross Margin € 597m +490bp 35.5% + 19% EBIT EBIT margin € 169m +500bp 10.1% x2 Earnings Per Share € 1.80 + 84% * at constant exchange rates and by reference
Slide 11: Solid performances from the main segments
Solid performances from the main segments Mobile Communication Secure Transactions Security Revenue Revenue Revenue +6% * € 948m +11% * € 443m +14% * € 216m Gross Profit Gross Margin Gross Profit Gross Margin Gross Profit Gross Margin +14% € 395m +430 bp 42% +57% € 118m +840 bp 27% +12% € 66m -9 bp
Slide 12: All three main segments are contributing to the increase in operating income
All three main segments are contributing to the increase in operating income Fall-through from strong gross margin improvements Operating expenses stable as percentage of revenue Effective delivery of merger synergies Operating income bridge between FY2007 and FY2008 €169m EBIT € million 180 +
Slide 13: Consistently generating cash
Consistently generating cash € in millions 2007 2008 Net cash as of Dec. 31, 2007 314 Current and non-current borrowings as of Dec. 31, 2007 24 Cash and cash equivalent as of Dec. 31, 2007 337 Cash generated by operating activities 130 191 (before cash outflows related to restructuring actions) Cash
Slide 14: Update on currency
Update on currency Breakdown of Currency Exposure The positive effect of the US Dollar 2008 Revenue appreciation vs. the Euro is offset by the negative effect of the other EUR USD 39% 37% currencies weakening vs. the Euro Others At Q1 ’09 exchange rates: 24% Q1 ’08 revenue would change by +2.5% 20
Slide 15: Value creation through disciplined earnings expansion
Value creation through disciplined earnings expansion Secure Mobile Security Transactions Communication Solid progress Successful turnaround Profit expansion and towards break-even margin improvement Strong earnings expansion EBIT +102% EPS +84% 15.5% ROCE 3 Rigorous capital discipline over WACC 4 o
Slide 16: Moving Forward
Overview Financial Results Moving Forward Olivier Piou, CEO 16
Slide 17: Outlook
Outlook Our business has strong fundamentals and prospects. The current economic environment does not put into question the mid and long-term objectives of Gemalto, even if it limits short-term visibility. We will continue our mission to provide trust and convenience to the wireless and digital worl
Slide 18: On track to grow revenue and expand earnings
On track to grow revenue and expand earnings Security is set to join as a profit engine Main drivers & short-term challenges: Ï Sustained SIM mix migrations and mobile Operating Margin services deployments + Strong margin, Ï 3G deployment in China steady growth Mobile Ï Adoption of contactless payme
Slide 19: Strongly positioned with clear priorities
Strongly positioned with clear priorities Balanced Business Portfolio Our 2009 Priorities Diversified and uncorrelated business Maintain our commercial and operational segments drive and best practices Complementary business activities of Maintain rigorous and low-risk financial products, so
Slide 20: World Leader in Digital Security
World Leader in Digital Security Markets in Strong Development Unique Technology Portfolio Blue Chip Customers Large Free Float and Robust Financials A Business Model with Strong Leverage on Growth 20