Gemalto issues H1 2017 results with $1.7B in revenue
Gemalto issued the results for H1 2017 in which the company’s total revenue was €1.39 billion (US$1.7 billion) and gross profit decreased from €84 million (US$100 billion) to €502 million (US$597.3 billion) compared to H1 2016.
The company’s operating expenses fell by €5 million (US$5.9 million) to €409 million (US$486.7 million) compared to the same period last year, while its profits from operations was €93 million (US$110.6 million).
Gemalto’s acquired Identity Management Business contributed €1.5 million (US$1.8 million) in operational profit since May 1.
The company’s Payment & Identity segment saw a H1 2017 revenue of €875 million (US$104.1 million).
Meanwhile, Gemalto’s Embedded software & Products segment reported sales of €532 million (US$633.5 million) and its Platforms & Services segment had sales of €343 million (US$408.3 million), a year-on-year drop of 8 percent and 6 percent, respectively.
The company’s Payment business fell by 19 percent to €414 million euros. Gemalto’s sales in Americas decreased by 37 percent year-on-year during H1 2017 compared with an increase of 33 percent last year, due to the ongoing return to normalized inventory levels of US EMV cards at Gemalto’s customers combined with a soft market environment in Latin America.
Gemalto is also regrouping its Mobile Financial Services offerings with its eBanking services to better align the digital banking and payment offers to comply with the European Payment Service Directive 2 (PSD2) initiative.
Gemalto said it expects Q2 2017 double-digit revenue decreases in Payment in Americas and the SIM business compared with Q2 2016, which should be offset by the expected revenue acceleration in Enterprise, Machine-to-Machine and Government Programs. This, in turn, will lead to stable year-on-year revenue for H2 2017.
The company estimates that its H2 2017 profit from operations will fall between €200 million (US$238.1 million) and €230 million (US$273.8 million), with full-year profit from operations expected to be between €293 million (US$348.8 million) and €323 million (US$384.5 million).
“In the second quarter, Gemalto’s year-on-year base of comparison in the US Payment business was at its most challenging level, reflecting the ongoing adjustments in US EMV demand,” said Philippe Vallée, CEO of Gemalto. “In addition, the removable SIM business deteriorated faster than we expected. As a result, the company’s first semester results were disappointing.
“Looking ahead, Gemalto expects to generate year-on-year stable revenue in the second semester supported by an acceleration in its Enterprise, Government Programs and Machine-to-Machine businesses, leading to the outlook announced in July. The priorities that I have set for the teams are to rapidly integrate the newly acquired Identity Management Business, successfully execute the first actions of the transition plan and focus our investments on offers that are key to our clients’ digital transformation.”
In July, Gemalto’s SVP of banking and payments, Paul Kobos, discussed how the company’s biometrics-based, self-serve credit card kiosks can help retailers authenticate customer identities when issuing store-branded credit cards.