By InvestAdvocate
Lagos (INVESTADVOCATE)-Gemalto, the world leader in digital security on Friday said its revenue for the first quarter (Q1) 2018 appreciated 8.0 percent to €650 million at constant exchange rate compared to €651 million posted in the Q1 of 2017, according to an emailed statement from AETOSWire.
The world’s digital security company said the €650 million total revenue declared in the review period if excluding the €35 million contribution from the Identity Management Business, Gemalto’s revenue grew 3.0 percent at constant exchange rates. “The Company’s return to top line growth is supported by strong revenue increase in the Identity, IoT& Cybersecurity segment,” the statement affirmed.
The company reported a double digit cyber revenue growth in Identity, IoT and Cybersecurity segment of 24 percent to €293 million in Q1 2018 from €256 million recorded in the corresponding period of 2017. “The backlog in this segment continued to increase driven by solid wins across the businesses,” Gemalto said.
Revenue in Smartcards and Issuance segment declined 2.0 percent to €357 million from €396 million posted the same period of last year.
Philippe Vallée, Chief Executive Officer, commented: “Gemalto grew well this quarter driven by a solid increase in the Identity, IoT& Cybersecurity segment that more than offset the anticipated revenue decrease in the Smartcards & Issuance segment.
According to Vallée, during the quarter, commercial synergies with the newly acquired Identity Management business began to kick in and resulted in milestone wins in Governments. Gemalto also announced the launch of two ground-breaking laser-personalised innovations designed to significantly increase the security of passports and IDs.
Vallée said the Cybersecurity business grew well in Europe in anticipation of General Data Protection Regulation (GDPR) implementation and more broadly as organisations increase their focus on data privacy and data security. “The IoT business posted an outstanding performance, as large deployments for connected health devices, smart payment and connected cars continue to reflect the growing adoption of IoT technology in industrial applications” he added.
The CEO disclosed that in parallel, Gemalto pursued its focus on profit margin in the Smartcards & Issuance segment adjusting its cost-base and business priorities to the market dynamics.
“These evolutions, in line with our expectations, are a first step resulting from the strategic choices we have made for the Company. They provide us with a solid foundation to deliver on our 2018 objectives.
On March 27, Thales launched its offer for all Gemalto shares, an offer unanimously supported by Gemalto’s Board of Directors,” Vallée said.
Gemalto revealed in the first quarter, the Governments business posted very strong revenue growth compared with the same period of last year. The positive evolution was due to the contribution of the Identity Management Business and initial deliveries of its core solutions to Gemalto’s historical customers. In addition, a significant project using biometric technology was won in the banking sector.
“The increase in passport revenue was solid this quarter, driven by major customers in Europe and Asia while taking into account softer deliveries in the Middle East. Gemalto also announced the launch of two new laser-personalised innovations designed to further increase the security of official identity documents such as national ID cards and passports,” the company noted.
The Cybersecurity business delivered a solid performance this quarter. This was driven by a growing number of deployments of encryption and key management software in Europe in anticipation of the May 2018 EU’s GDPR and more broadly as data privacy and data security continue to be a key focus for organisation.
Gemalto said the payment business stabilised this quarter. “Sales in Americas decreased by 5.0 percent compared with 34 percent in the first quarter of 2017, as the US EMV market continued to gradually normalise. Additionally, the CIS and Middle East regions posted strong performances on the back of large payment card deployments,” the company noted.
The world’s digital security company added that the SIM business remained under pressure. “SIM revenue declined this quarter as low profit-margin opportunities in South Asia were dismissed, in line with the stable profit margin objective set for this business. As part of the transition plan, Gemalto also decided this quarter to exit a specific low-end removable SIM market, cutting its dedicated resources and products for that market,” it added.
According to Gemalto, the Digital business recorded slightly lower revenue year-on-year as growth in mobile services were more than offset by a decrease in payment services. “Connectivity solutions deployments increased in key sectors of the IoT market while the need for On Demand Connectivity (ODC) services is now gradually spreading to all regions and mobile network operators. In particular, Gemalto announced a partnership with Korea Telecom to provide its ODC solution and embedded SIM (eSIM) to automobile manufacturers enabling in-vehicle connected services. The revenue reduction in payment services partly resulted from the discontinuation of a business as part of the transition plan,” the statement affirmed.
