AMSTERDAM , The Netherlands , September 13 --
- Revenue Up 2% at Constant Exchange Rates (-1% at Current ExchangeRates)
- Operating Margin1 at 3.7%, Reflecting Fierce Competition in MobileCommunication
- Cash and Cash Equivalents at
- Continuing Challenging Industry Environment
- Synergies and Long-Term Objectives Confirmed
Gemalto (Euronext NL0000400653 - GTO), a leader in digital security,today announced its results for the half year ended June 30, 2006 .
Highlights of the adjusted pro forma income statement1 (all figures beloware at current exchange rates):
The above mentioned adjusted measures exclude business combinationaccounting entries, and one-off expenses incurred in connection with thecombination with Gemplus (Nasdaq: GEMP). Gemalto believes these measures arehelpful in understanding its past financial performance and its futureresults. Adjusted financial measures are not meant to be considered inisolation or as a substitute for comparable IFRS measures, and should be readonly in conjunction with the condensed consolidated interim financialstatements prepared in accordance with IFRS provided in appendix.
Olivier Piou, Chief Executive Officer, commented: "I would like to thankour shareholders for the outstanding success of the public exchange offer: itdemonstrates their endorsement of our vision to create a global leader indigital security.
The integration is progressing smoothly and Gemalto is fully focused oncapturing growth opportunities and on realizing the planned synergies thatwill both materialize progressively. Our work since execution of thecombination allows us to confirm the synergies and long term financialobjectives previously outlined.
Since the beginning of this year competitive pressure has been intense.We expect that our market environment will remain challenging in the comingmonths and we are adjusting to these demanding circumstances.
Yet, the simultaneous global spread of communications systems, mobilepersonal devices, and the internet, all requiring higher levels of security,plays well for fully realizing our digital security vision."
The Company's condensed consolidated interim financial statements(unaudited) are prepared in accordance with International Financial ReportingStandard (IFRS).
The pro forma income statement for the first half 2006 has been preparedassuming that the combination with Gemplus had taken place as of January 1,2005 , allowing the Group to present it in comparison with the first half of2005. The one-off, combination related items are therefore charged to thefirst half 2005 pro forma income statement, so that the first half 2006income statement only reflects the recurring intangible asset amortizationcharges resulting from the accounting treatment of the transaction, as wellas the additional stock compensation charge arising from it.