March 14, 2013 / 10:55 AM / 5 years ago

Smart card firm Gemalto sees further surge in sales

(Reuters) - French smart card maker Gemalto is forecasting double-digit sales growth this year, helped by strong demand for its services and products in the United States and Asia, after posting record sales in 2012.

Paris-listed Gemalto, which makes smart chips for mobile phones and bank payment cards, said sales last year were up 9 percent at 2.24 billion euros ($2.90 billion) driven by its mobile business which accounts for close to half its sales and its smaller Security unit, which makes embedded software for electronic documents such as passports.

Profit from operations rose 26 percent to 305 million euros ($395 million) but was affected by a 9.8 million-euro operating loss in the company’s patents unit due to the costs of a continuing U.S. legal battle with Google concerning Google’s Android mobile software.

The result beat Gemalto’s own forecast of 300 million euros, a target which had been brought forward to 2012 from 2013 and it raised the dividend payout to 0.34 euros a share from 0.31 euros last time.

Shares in Gemalto, now a constituent of the Paris market’s blue chip index, were up 0.8 percent at 72.74 euros by 06:05 a.m. EDT.

The company has been diversifying into fast-growing fields such as mobile payment technologies and the management of sensitive data, away from its once core business of making SIM cards for mobiles.

Its mobile unit, which is its most profitable business, has also benefited from the move to 4G mobile broadband networks where more complicated chip cards are required.

Meanwhile the secure transactions business has been helped by the worldwide move to EMV-standard chip technology for credit and debit payment cards as well as fast-growing contactless NFC technologies, which allow smartphone users to make contactless payments.

Last year, the U.S. represented 12 percent of the company’s sales, up from 8 percent in 2011, Chief Executive Olivier Piou told a conference call, while Asia will be another growth driver in 2013 for the company, whose headquarters are in Amsterdam.

“Gemalto is very international, we operate in almost every country of the world and are capable of grabbing growth where it happens,” Piou said, adding this helped offset a more mediocre performance in Western Europe affected by the economic crisis.

He said the company will present its next strategic plan during the second half of 2013.

Reporting by Alice Cannet in Paris and Himank Sharma in Bangalore; Editing by Chris Gallagher and Greg Mahlich

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