Our strategy: extending the boundaries

Having delivered on our Combination ambitions, we announced our 2010-2013 Development Plan in November 2009.

Our mission remains unchanged

To provide trust and convenience to the wireless, digital world.

Our objective

Through revenue growth and margin expansion, our objective is to expand our profit from operations(*) by more than 50% to €300 million in 2013:

Profit from operations

2009 profit from operations: €183m. 2013 profit from operations target: €300m
(*)
Profit from operations is a non-GAAP measure defined as IFRS operating income adjusted for amortization and depreciation of intangibles resulting from acquisitions, all share-based compensation charges, and restructuring and acquisition-related costs.
In 2009, profit from operations differs from the adjusted EBIT by keeping out the equity-based compensation charges (€12m).

Our strategy

We will achieve our objective by leveraging our core assets to address a larger total market, through five key strategic priorities for profitable growth:

Strategic priorities Commentary
We will actively replicate successful models across geographies.
  • Our core markets are far from being saturated.
  • We have brought to market solutions with global appeal.
We will capture more value with remote services.
  • Gemalto UICC and over-the-air and post- issuance capabilities play an important role in operators’ mobile services strategy.
We will speed up commercialization of innovations.
  • We will continue to invest in and commercialize new technologies.
  • We will gain access to, and rapidly assimilate, external technologies.
We will leverage our unique position to serve customers with converging needs.
  • Our technology plays a role in industry convergence.
We will leverage our efficient base and expand through bolt-on acquisitions.
  • We have established an efficient base with strong cash generation.
  • We will complement our base plan with disciplined bolt-on acquisitions.

Our plan

Our plan is about extending the boundaries to enable us to operate in a significantly larger total market.

2009

6.7bn people
2.7bn mobile users
1.7bn Internet users

Source: UN,
iWS, Gemalto

Mobile broadband is driving data usage...
Secure access is crucial for cloud computing...
Less than 1/5th of the world's passports are electronic...
Mobile contactless is only in its infancy...

2015

7.3bn people
3.8bn mobile users
2.6bn Internet users
15bn connected machines

2010-2013 Revenue CAGR

Double digit growth in software and services, Double digit growth in Security, High single digit growth in Secure Transactions, Mid single digital growth in Mobile communication
  • We expect each business segment to grow over the period, with a double-digit revenue increase in Security.
  • We also expect a double-digit revenue increase in software and services.
  • Growth will be generated by:
    • Developments in wireless offers with new devices and remote services
    • Steady worldwide expansion of payment cards
    • Global spread of new government projects and authentication solutions.
  • Further margin improvements will be driven by Secure Transactions and Security.
  • We plan to continue to generate strong levels of operating cash flows, which we will re-invest to fuel organic growth and fund bolt-on acquisitions. They will also enable us to enhance return to shareholders via a combination of share buy-back and the newly initiated dividend distribution.
  • We plan to continue to tightly manage capital employed, with further ambitions to increase our Return on Capital Employed (ROCE).

Gemalto Investment Conference 2009 presentation, slide 14, sets out the key assumptions and potential growth accelerators underpinning our plan. For full details on the Development Plan please refer to: www.gemalto.com/investors