Gemalto announces 2017 earnings and expectations for growth

Gemalto has announced revenues of €3 billion (roughly US$3.7 billion) for 2017, with profit from operations (PFO) of €310 million ($382 million) in its latest earning report.

While the company’s revenue dipped by 5 percent from 2016, its second-half revenue was up by 1 percent year-over-year, and its outlook for fiscal 2018 includes double-digit revenue growth in its Identity, IoT & Cybersecurity segment, and stable PFO margin in its Smartcards & Issuance segment, resulting in mid to high single digit PFO growth overall.

“Gemalto’s second semester finished on a stronger note with solid contributions from Enterprise, Machine-to-Machine and Government Programs after a first semester impacted by very adverse conditions on our two historical markets,” said Gemalto CEO Philippe Vallée. “Moving forward, the strong demand in the Enterprise, Government and IoT markets is expected to continue, driven by the rising level of cyber incidents and data breaches, the need for increased security at country borders and the growing benefits of connected devices expanding across industries. The US EMV payment market normalization should come to an end in 2018 and the removable SIM market is expected to keep declining while next generation connectivity usage grows slowly.”

“In this context, Gemalto’s strategy is built on two pillars,” he continued. “The first one aims at strengthening our leadership in biometrics, civil identity and data protection. The second pillar builds on our leadership in digitalization while rightsizing our operations in the more mature businesses.”

Vallée also noted that combining the operations of Gemalto and Thales, as announced in December, would accelerate the implementation of Gemalto’s strategy.

Basic earnings per share fell 35 percent from €3.00 ($3.70) to €1.96 ($2.42) for the year.

The company’s Payment & Identity segment earned much higher revenue than its Mobile segment throughout the year, but particularly in Q4, when it grew by 2 percent at constant rates to €533 million ($657 million), while Mobile revenues fell 7 percent at constant rates to €293 million ($361 million).

Gemalto has announced a biometric payment card pilot in 2018 with the Bank of Cyprus.

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