Chairman's statement

Against a difficult economic backdrop, Gemalto delivered strong results in 2009. This underscores the success of the Company’s strategy and is a tribute to the hard work and creativity of its management and employees.

A strong performance

Stock price at 31 Dec 2009

€30.50

2008: €17.90

This represents an increase in value of 70.4% in 2009, compared to the CACNext20 Index that increased by 19.8%, and to the SBF120 Index that increased by 24%.

I’m delighted to report that Gemalto performed well during 2009 despite a highly challenging environment. The fact that the business has expanded profitability against this dismal economic backdrop is a significant achievement.

Although the Company has delivered improved margins and impressive cost control, growth remains a major priority. We are targeting organic opportunities both through innovation and higher sales in our existing operations. Acquisitions will also enable us to expand quickly into new areas. In addition, we will continue to build on the expertise, experience and leadership of our world-class management team which recognizes that this kind of growth is essential to maintaining the Company’s momentum.

A sign of the quality in this team is the way it has intelligently navigated the challenges of the past year. Gemalto is a truly global player, and part of our strategy has been to take strong positions in markets that have been resilient during the tough economy. Equally important, we have a wide range of services to offer our customers – and that has helped ensure we could stay on course despite the difficult economic conditions.

Winning new business

During 2009 Gemalto won significant new business with some of the world’s largest and most influential companies, due in no small part to this ability to provide mission-critical technology across a range of digital security needs. Our people’s willingness to apply their technological leadership to help clients move forward in their own markets has been reflected by excellent scores in our independent customer survey.

Paying a dividend

As a sign of our confidence in the Company’s development, in 2009 we announced our intention to pay a dividend for the first time. Although we should see improvements in most economies around the world during 2010, it’s unlikely to be a rapid or predictable recovery. But the Company is the leading player in an increasingly important sector, and it is well-placed to grow aggressively around the world. These are all hallmarks of a successful business with strong and effective leadership.

Finally, let me re-emphasize that this positive progress in testing times has only been made possible by our customers, employees, managers and supportive shareholders – so my most sincere thanks go to them all.

Alex Mandl

Chairman