Gemplus reports first quarter 2002 financial results

· Results in line with expectations
· Restructuring on track to deliver more than expected
· Return to profitability expected by year end

Luxembourg - April 30, 2002 - Gemplus International S.A. (Paris Euronext: Euroclear 5768 and Nasdaq: GEMP) today reported results for fiscal year 2002 first quarter ended March 31, 2002.First quarter revenue was 176.5 million Euros; gross profit was 36.2 million Euros; operating expenses were 83.5 million Euros; and the net loss was 62.5 million Euros, including an exceptional 19.3 million Euros restructuring charge. Net loss per share was 0.10 Euro on a fully diluted basis. Adjusting for exceptional costs, net loss was 0.07 Euro per share.

Financial Statements for the first quarter 2002 (233K)

Commenting, the company said:

"These results are not attractive; but they are very much in line with our expectations. We're reporting against last year which was Gemplus' strongest ever first quarter and included the SkiData and Tag businesses which have subsequently been sold. We also signalled in February that the first quarter this year would suffer from the absence of 28 million Euros of financial services project work in the US, which was completed before Christmas. In addition, and also as expected, there is no benefit in the first quarter from the restructuring programme announced in February, and gross margin has continued to be held back by the need to complete running down our inventory of high cost chips bought at year end 2000 prices. From the current quarter onwards, both our gross and operating margin will progressively benefit from the restructuring and from the use of lower cost chips."

Gemplus' balance sheet remains strong with cash and cash equivalents of 450 million Euros. Net cash outflow, excluding exceptional costs, was limited - under 10 million Euros. This includes 12.2 million Euros of capital expenditure, reflecting the lower run-rate of capital expenditure indicated in February. Inventory levels were down by 12 million Euros, representing some 90 days' sales. Only around 20% of chip inventory was chips bought at year-end 2000 prices. Accounts receivable dropped by 42 million Euros, reflecting the lower revenue levels, and Day Sales Outstanding were 63 days, within the normal range of Day Sales Outstanding of between 60 and 65 days.

On a regional basis, 52% of revenues were generated in Europe, 23% in the Americas and 25% in Asia. On a market sector basis, 69% of revenues were generated from telecoms and 31% from financial services.

Restructuring

Good progress has been made with the restructuring programme announced in February. Gemplus is now confident of achieving at least the 100 million Euros annualised savings forecast and achieving the full annualised rate of savings by the end of calendar 2002 - some 3 months earlier than initially indicated. The impact within the current year should be around half the full annualised run rate. The great majority of the balance of the exceptional 65 million Euros restructuring charge is planned to be taken in the second quarter.

Commenting, Chief Executive Officer, Ron Mackintosh, said:

"These results are very much in line with our expectations. 2002 will be a year of two halves - significant losses in the first half, followed by a progressive build-up of profitability in the second half. We are confident we will return Gemplus to profitability by year end."

"The restructuring programme is more than meeting expectations, and we will see the benefits of this and of lower cost inventory starting to feed through from the second quarter onwards. The marketplace continues to be tough, but the indications from our own information and from independent surveys are that Gemplus is now at least holding, and perhaps increasing, its market share. Management focus is resolute both on improving Gemplus' operating efficiency and on working with our customers over time to improve the sales mix and accelerate adoption of more advanced smart cards, particularly Java based cards for mobile operators."

Video interview with Ron Mackintosh

Question 1:
Today your are announcing Gemplus' Q1 results. What are your main observations?
(90 seconds - 1.1Mb)

Question 2:
What are your objectives for Gemplus?
(120 seconds - 1.5Mb)

Question 3:
What progress are you making with the restructuring plan?
(120 seconds - 1.6Mb)

Questions 4:
What are the prospects for Gemplus for the future?
(55 seconds - 1Mb)

Conference Call

The company has scheduled a conference call for Tuesday 30 April, 2002 starting at 2.00pm Paris time.

Callers may participate in the live conference call by dialling:
Europe: +44 (0) 208 240 8243
North America: +1 (415) 217 0050

The live conference call will also be available on the Internet at www.companyboardroom.com.

Replays of the conference call will be available approximately 2 hours after the conclusion of the live conference call for 2 weeks at: +44 (0) 208 288 4459 (Access Code: 670012).

Enquiries :

Media
Gemplus:
Flavie Gil Tel.: +33 4 42 36 56 83
Email: flavie.gil@gemplus.com

Citigate Dewe Rogerson: Tel.: +44 (0) 207 638 9571
Anthony Carlisle Tel.: +44 (0) 797 361 1888
Email: anthony.carlisle@citigatedr.co.uk

Laure Lagrange Tel.: +44 (0) 207 282 2988
Mobile: +44 (0) 776 869 8731
Email: laure.lagrange@citigatedr.co.uk

Investor Relations
Gemplus:
Yves Guillaumot Tel.: +33 4 42 36 52 98
Email: yves.guillaumot@gemplus.com

Fineo:
Anne Guimard Tel.: +33 1 45 72 20 96
Email: guimard@fineo.com

About Gemplus

Some of the statements contained in this release constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry's actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activities, performance, or achievements expressed or implied by such forward-looking statements. Actual events or results may differ materially. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Factors that could cause actual results to differ materially from those estimated by the forward-looking statements contained in this release include, but are not limited to: trends in wireless communication and mobile commerce markets; our ability to develop new technology, and the effects of competing technologies developed and expected intense competition generally in our main markets; profitability of our expansion strategy; challenges to or loss of our intellectual property rights; our ability to establish and maintain strategic relationships in our major businesses; our ability to develop and take advantage of new software and services; and the effect of future acquisitions and investments on our share price. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. The forward-looking statements contained in this release speak only as of this release. We are under no duty to update any of the forward-looking statements after this date to conform such statements to actual results or to reflect the occurrence of anticipated results.

©2002 Gemplus International S.A. All rights reserved. Gemplus, the Gemplus logo, GemXpresso, and Your Passport to the Digital Age are trademarks and service marks of Gemplus S.A. and are registered in certain countries. All other trademarks and service marks, whether registered or not in specific countries, are the property of their respective owners.