Annual Report 2014

Trust. Every day

Every day, people all over the world use our products, platforms and services. They're benefiting from digital security technologies we've made safe and reliable. Solutions we help our clients to offer. That's our business: working behind the scenes, enabling secure, convenient digital services to be delivered to billions of individuals. And, ultimately, it's about providing trust. Every day.

CEO's message

Financial highlights

"Digital security markets are developing as Gemalto anticipated, confirming that our strategies are well founded."

Alex Mandl, Chairman
€m

Profit from ongoing operations

+17% CAGR
€m

Revenue

+7% CAGR

Proposed dividend

+11% CAGR

Our 2014 success stories

"As always, our success is built on trust. Our customers trust us to facilitate their relationships with end-users, and to safeguard their reputations and their data. Their satisfaction remained very high - and these stories show why." Olivier Piou, CEO

Enabling shoppers to 'wave and pay' in Japan

Japan has the world’s largest contactless infrastructure. Its consumers are used to making payments with a wave of their phone, and they’re hungry for more services – from mobile payments to loyalty programs, and e-Ticketing to access control. So Gemalto is the natural mobile near- field communication (NFC) partner for the country’s number one mobile operator, NTT DOCOMO. Our end-to-end solution, selected in 2014, offers its 63 million subscribers the highest levels of convenience and security.

Making home banking easy in Panama

Panama's largest bank, Banconal, turned to Gemalto in 2014 to help it offer multi-channel mobile banking and e-Banking to all its customers. Our Ezio mobile app turns their phones and tablets into strong authentication devices. And to identify themselves securely and sign transactions online, they simply use our Ezio Slim Optical Token. When the card-sized device is held close to a PC screen, its optical sensors register details transmitted through an on-screen barcode.

Improving health in Africa

In sub-Saharan Africa, mobile phone technology can be life-changing. Or even life-saving. We’re using it, for example, to reach over 15 million pregnant women and mothers of young children, to improve their health and nutrition. As part of the mobile industry’s pan-African m-Health initiative, our SmartMessage interactive messaging system links patients with health professionals to deliver free, targeted advice on basic phones. The program was launched in seven countries in 2014 and plans to add another four in 2015.

Keeping corporate networks private in the US

Red Hat is the world’s leading provider of open-source software solutions. But its virtual private network (VPN) needs to be completely private, since its 7,000 employees use it to access sensitive company information – even remotely. To protect this access more strongly, Red Hat selected our Protiva token technology in 2014 to provide multi-factor authentication. And in keeping with ITS open-standard ethos, our interoperable solution promises easy integration with its present and future IT systems.

Mobilizing ID in Norway

How do you encourage people to use a service? Make it more convenient. Almost a million Norwegians use the country’s BankID system to access banking services and sign transactions online. In 2014 Bank-ID adopted our Valimo mobile ID solution to make these services available on the go, across all mobile networks and phone types. Result: with the introduction of a mobile option, transactions per user have doubled.

Waving and paying in Spain

CaixaBank, Spain’s innovative financial services provider, has launched contactless payment that’s also cardless and phoneless. The EMV- standard technology is built into our Optelio Contactless MiniTag, slipped neatly into a durable, water-resistant wristband. Available in a range of colors, the bands have a particularly strong appeal for younger customers. They’re ideal for outdoor lifestyles and music festivals or sports events – allowing fast, convenient payment with no need to carry a purse or wallet.

Our purpose

Our purpose is to create trust in the digital world

Trust is vital to a digital world witnessing an ever-increasing value in dematerialized exchanges. The roots of trust lie in ensuring their integrity and confidentiality. It can be enabled by using cryptography to secure network assets and a reliable identification process to access them.

Business model

Our business model generates value across the trust chain

The trust chain comprises two essential, interlocking elements at the edge and core of digital security. These are the focus of our two main activities: Embedded software & Products, and Platforms & Services.

Key segments

Our solutions address fundamental needs in the digital security market.

These needs underpin our performance across all segments and activities.

Mobile

  • Mobile Communication
  • Machine-to-machine

Payment & Identity

  • Electronic Payment
  • E-government
  • Enterprise Security

Embedded Software & Products (E&P)

Revenue 2014
€1,031m
Growth
0%
Revenue 2014
€915m
Growth
+8%
2013-2017 Revenue CAGR

PLATFORMS & SERVICES (P&S)

Revenue 2014
€259m
Growth
7%
Revenue 2014
€243m
Growth
+14%
2013-2017 Revenue CAGR

Our 2017 targets

We are making tangible progress towards our 2017 targets

Our financial performance is showing constant improvement due to three main factors:

Strong Pillars of Revenue Growth

  • Ten opportunities spread in Mobile and Payment & Identity, across geographic regions, and evenly split between E&P and P&S.
  • Large, addressable, under-penetrated markets with rapidly growing and recurring demand.

Revenue Mix

  • More platforms usage and users
  • Richer embedded software
  • Lower proportion of hardware

Scale Effect

  • Replication of projects and higher utilization of infrastructure
  • Wider distribution of products
  • Better absorption of G&A

Global operations

We are a truly international company with clients from over 180 countries. They are served by our employees of 116 nationalities operating from a worldwide network of research and software development (R&D) centers, sales offices, personalization and data centers and production facilities. And we systematically share our expertise through a series of client-focused forums addressing the opportunities in growth markets on different continents.

Our success is founded on our dedication to satisfying our customers, our attention to developing our people, and on two unique assets: our technological expertise and our market neutrality.

Technological Expertise

Our technology to secure digital identities and access services has proven to be an unmatched combination of security, scalability and cost efficiency.

Market Neutrality

We operate behind the scenes so that our clients can preserve a direct and trusted relationship with their customers.

  • Customer Satisfaction

    We work in partnership with our clients to shape our development. in 2014, in our annual customer survey, 84% of them said they were satisfied or very satisfied with gemalto - a world-class rating.

  • Employee Engagement

    Our annual employee survey shows a remarkably high level of commitment to gemalto, with 82% saying they were satisfied with the company in 2014.

  • R&D Leadership

    We get award-winning results with our proactive innovation program and business incubation structure. in 2014 we filed patents for 114 new inventions.

  • Established Reputation

    Trust is one of our main assets and fundamental to the way we do business. ever since gemalto was created we have been progressively enhancing the service we deliver to our clients - and so developing the company's brand recognition and reputation.

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Annual Report 2014

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