Gemalto raises 2017 profit target after 10% growth in 2014

Gemalto raised its target for 2017 operating profit after reporting a strong finish to 2014 and completing its acquisition of SafeNet. The company now expects profit from operations of over EUR 660 million in 2017, compared to an earlier target of EUR 600 million. In 2014, the figure rose 10 percent to EUR 383 million, and the margin was up by 1 percent point to 15.5 percent, both a record for the company. The acquisition of SafeNet was completed in early January 2015, and the company reported pro forma revenue of EUR 292 million and operating profit of EUR 44 million for SafeNet in 2014. 

Gemalto alone reported revenue of EUR 2.465 billion for 2014, up 3 percent on a reported basis and 5 percent more at constant exchange rates. Growth came mainly from EMV payment cards, IoT modules, and mobile payment and subscriber management services, while government sales were lower. Sim sales returned to growth in the fourth quarter, but were lower over the full year due to weaker demand in Latin America and eastern Europe. 

Gemalto's net profit fell to EUR 221 million from EUR 258 million in 2013, mainly due to the costs of a new incentive programme. On an adjusted basis, diluted EPS fell to EUR 3.55 from EUR 3.57, amid higher financing costs and taxes. Free cash flow was still up 11 percent to EUR 169 million, including EUR 20 million cash for restructuring, and the company increased its dividend 11 percent to EUR 0.42 per share.