Oberthur Card Systems Reports 2006 Q1 Sales

April 27, 2006
Smart card company reports best Q1 sales yet

PARIS, April 26 /PRNewswire-FirstCall/ --

- Best Q1 Sales ever registered: EUR121.9 M, a 3.1% increase[1]

- Volumes of smart cards comparable to Q4: 56 M units vs 58 M units in Q4 2005

Oberthur Card Systems today reported first quarter 2006 revenue of EUR121.9 M, matching the record-breaking EUR118.1 M Q1 2005 sales and EUR121.1M Q2 2005 sales.

Sales MEUR 2006 2005 Variations 2006 / 2005 EUR at EUR at actual constant rates rates First Quarter 121.9 118.1 - 0.9 % +3.1%

In what is traditionally a slow period and in comparison with already record sales in the first quarter of 2005, the mobile and ID segments delivered growth with an unrivalled level of smart card shipments.

During the first three months of the year, Oberthur Card Systems has delivered 56 million microprocessor cards, a 29.4% increase year-on-year.

- In the Mobile segment, volumes reached a record level at 33.8 million units, showing a 70.7% growth compared to Q1 2005, essentially pushed by significant deliveries in North America, Middle-East and India, where the company has increased its market share substantially. Oberthur Card Systems has achieved a tremendous performance in emerging markets, which should migrate to high-end products in the near future.

As a consequence, the product mix has temporarily been modified due to the great increase of middle range card volumes. Oberthur Card Systems has once again confirmed its strong position in the high-end segment as more than 50% of SIM volumes are high-end cards, a 37% increase of high memory cards compared to Q1 2005. Stronger competition in the market combined with a modified product mix this quarter led to a 40% decrease in the average selling price. Sales in Mobile Communications continued to grow and amounted to EUR39.4M, a 2.7% increase at constant exchange rate compared to Q1 2005.

- Sales of payment cards amounted to EUR24.7 M, a 23.4% decrease at constant exchange rate compared to Q1 2005, with 16 million cards delivered vs. 19.6 million for the corresponding period last year. Oberthur Card Systems is satisfied with the sequential trend: the company delivered a remarkable and unusual performance this quarter as volumes remained stable. In addition to this, the average selling price showed a 3.6% increase compared to Q4 2005, due to an improved product mix in Europe and exchange effects in the United States. In the meantime, the contactless payment card segment continued to develop favourably in the first quarter with deliveries of several million units, driven by large-scale deployments in North America.

- Sales for Identity and Security segment reached EUR10.6 M, up 18.9% on a year-on-year basis. Volumes for the Identity and Security segment reached 5.9 million units, a 61.1% growth pushed by strong demand in the Pay TV sector and e-passport, Moroccan ID card deliveries. The ASP decrease was mainly attributable to the expected price pressure in the pay TV sector.

Sales in the Other Cards Segment - magnetic stripe cards, scratch cards and memory cards - amounted to EUR20.6 M, showing a 5.0% increase year-on-year. Magnetic stripe card volumes were stable in the United States while experiencing a strong growth in the MARS[2] region, mainly due to the acquisition of Africard (EUR1.4 M sales).

Sales of Services and Solutions - EUR26.4M - are up 14.0% compared to Q1 2005. This segment, consisting mainly of personalization services but also licensing fees for EUR2M, has been boosted by a dynamic North American market.


Oberthur Card Systems' sales should increase during the full year 2006 and growth should accelerate from the coming months:

- Mobile Communications should become a strong engine for growth in the months to come. Due to the consolidation of the industry and its even more sustained efforts in the segment, Oberthur Card Systems is in a good position to gain market share in this area. In parallel, capitalizing on recent innovations in products and applications - GIGAntIC, AngelIC, Mobile TV - the company should benefit substantially from the willingness of European operators to move forward the digital convergence planned for the second half of the year.

- The Payment market, which has recently seen slightly lower levels of activity, should enter a new ramp-up phase with program launches in Europe and Asia. Building on its position as a personalization world leader with a strong position in Western Europe, Oberthur Card Systems continues to gain market share in this activity through new bureaus, partnerships and joint ventures throughout the world, most recently in Spain, Asia, Central America, Eastern Europe and the Middle East.

- In the "Identity & Security" segment, Oberthur Card Systems will continue to broaden its participation in an increasing number of projects across the five continents. In addition, the roll-out of major programs in North America and Europe should sustain growth this year.

In a still highly competitive and changing market, Oberthur Card Systems pursues its strategy for development, innovation and streamlining of industrial process to remain in the best position to leverage, in the mid-term, a favourable situation.

About Oberthur Card Systems

With sales of 500.8 million Euros in 2005, Oberthur Card Systems is one of the world's leading providers of card-based solutions, software and applications, including SIM and multi-application smart cards as well as services ranging from consulting to personalization.

Innovative products, security expertise and high quality services ensure Oberthur Card Systems' strong position in its main target markets:

- Payment & Services: accounting for 53% of 2005 revenue. Oberthur Card Systems is a world leader and the number one supplier of Visa and MasterCard payment cards

- Mobile Communications: accounting for 32% of 2005 revenue, mainly from open and interoperable solutions based on Java(TM) technology.

- Identity: Oberthur Card Systems holds a strong position in ID projects throughout the world

- Multimedia: Oberthur Card Systems enjoys a leading position in the Pay-TV market, with end-to-end expertise throughout the value chain - software development, manufacturing and personalization

- Transit: Oberthur Card Systems provides a microprocessor-based offer especially suited to the high-end market segments

Close to its customers, the company benefits from an industrial and commercial presence across all five continents. Listed on the Euronext Stock Exchange (ISIN: FR0000124133) since July 2000, Oberthur Card Systems is a subsidiary of the Francois-Charles Oberthur Group.

For more information, visit www.oberthurcs.com Oberthur Card Systems Image 7 Investors / Press Contact: Caroline Simon-Phelip Tel : +33-1-53-70-74-65 Stephanie Cau Mail: [email protected] Tel: +33-1-47-85-56-57 Mail: [email protected] Tiphaine Hecketsweiler Tel : +33-1-53-70-74-59 Mail: [email protected] Exhibit Breakdown of sales in MEUR by card type and geographical region (according to IFRS norms) MEUR Q1 2006 Q1 2005 Variations Variations 2006 / 2005 2006 / 2005 at constant at actual rates rates Microprocessor 74.8 77.1 -6.1% -3.0% cards Payment 24.7 31.7 -23.4% -21.8% Mobile 39.4 36.6 2.7% 7.7% Communications Identity & 10.6 8.9 18.9% 19.7% Security Other Cards 20.6 18.8 5.0% 9.6% Services & 26.4 22.2 14.0% 19.1% Solutions Total 121.9 118.1 -0.9% 3.1% MEUR Q1 2006 Q1 2005 Variations 2006 / 2005 at actual rates European Union 59.3 65.7 -9.7% MARS 19.7 22.5 -12.4% US Region 36.6 22.9 +59.2% Asia / Pacific 6.3 6.9 -10.2% Total 121.9 118.1 +3.1%

NB: To better serve its customers, Oberthur Card Systems has changed its regional organization: SEMEA -LA Region and Northern Europe Region perimeters have been modified to become European Union Region and MARS (Middle East, Africa, Russia, and South America) Region.

[1] At current exchange rates

[2] Middle East, Africa, Russia, South America

SOURCE Oberthur Card Systems

CONTACT: Oberthur Card Systems, Investors / Press Contact: Stephanie Cau, Mail: [email protected]; Image 7, Caroline Simon-Phelip, Tel : +33-1-53-70-74-65, Mail: [email protected], Tel: +33-1-47-85-56-57, Tiphaine Hecketsweiler, Tel : +33-1-53-70-74-59, Mail: [email protected]