Chairman's statement

Commendable progress towards ambitious goals

A global identity

Stock price at December 31, 2010

31.845

+4%

(2009: €30.50)

Gemalto delivered superior results in 2010, in line with our plans for both organic and non-organic growth. Given the economic backdrop, this was a commendable performance. Despite later signs of recovery, both Western Europe and North America were struggling last year. However, with Gemalto's global footprint, we were able to offset this sluggishness with strong results in Africa, Asia and South America.

Acting with authority

Gemalto can deliver in this way partly because its management team has the ability and ambition to exploit emerging opportunities – in new regions, markets and technologies. During 2010 the Board backed management in the acquisition of five companies. Thanks to some carefully considered and timely deals, we've broadened the base for serving our customers, by targeting companies which add specific technologies, routes to market or new growth areas such as M2M. These new capabilities are critical building blocks for the future.

Secure for the long term

Another key factor in strengthening the company is sound corporate governance. As a Board, we devote time ensuring that we're well informed about the latest legislation and best practice in this area. This translates into clear action plans for our Board responsibilities. In 2010 we published our first stand-alone sustainability report. This is important to a company like Gemalto, which helps its customers build and protect mission-critical infrastructure. In this environment, we are proud to have a long-term, long-lasting vision.

A positive performance

That we are making progress is clearly supported by our 2010 figures. Growing revenues, rising EBITDA, improving margins and strong cash generation all point to a business that's successful and well managed – though this positive performance hasn't yet been reflected in our share price. Nevertheless, our results allowed us to pay a dividend in 2010 – the first in our history. This demonstrates that Gemalto has the scale, the market positions and the confidence to generate reliable cash flows.

Ambitious goals

In the light of these outcomes, I am optimistic about the future. Our widening portfolio means we're in the right position to make the most of the growth that's re-emerging. Better still, we sit at the heart of some exciting sectors where demand for our solutions can only increase. Shareholders rightly expect the company to perform consistently and to hit the demanding milestones we have set for ourselves. I'm confident that they will see the inherent value of this business as we work towards those ambitious goals.

Alex Mandl
Chairman