Business News
Oberthur Technologies Q2 2008 Sales
Wednesday 23. July 2008 - Revenue up Sharply, + 20.2%, at EUR217.2m, Boosted by Strong Growth in SIM Card and Identity Sales and Integration of XPonCard on May 1st 2008
Today, Oberthur Technologies reported second quarter 2008 sales of EUR217.2m, up 20.2% year-on-year at current rates. Organic growth reached 12.3% at constant rates versus Q2 2007.
in M EUR 2008 2007 Var. Constant Var. Current
Rate Rate
First Quarter 184.3 169.4 13.1% 8.8%
Second Quarter
OT 217.2 180.7 25.6% 20.2%
OT (Excl.
XPonCard) 193.4 180.7 12.3% 7.0%
First Semester
OT 401.5 350.1 19.6% 14.7%
OT (Excl.
XPonCard) 377.7 350.1 12.7% 7.9%
Card:
During the second quarter, the Card Systems activity posted sharp growth in sales, up 30% to EUR186.7m, or 36% at constant rates. This performance was boosted by the integration of XponCard in Oberthur’s scope of consolidation on May 1st, 2008.
At constant perimeter, sales rose 13% at current rates and 20% at constant rates, to EUR162.9m. This performance reflects a combination of sustained demand in the SIM and ID markets and in all regions of the world. Thanks to strong organic growth, deliveries represented 149 million microprocessor cards, a 66% increase in volumes compared to Q2 2007.
– Mobile Communications segment:
Mobile sales came to EUR86m, a 45% increase at current rate.
Excluding XPonCard, Oberthur’s mobile sales were up 28% to EUR76m. In the SIM card sub-segment, volumes rose 76% on Q2 2007 and sales reached, EUR70m.
Price pressure remains moderate, enabling Card Systems to deliver good gross margin level. Trends in ASP primarily reflect the geographic mix: delivery volumes in Asia accounted for 42% of SIM cards sold versus 28% in Q2 2007.
All regions put in good performances:
– Europe Middle East Africa (EMEA) particularly benefited from a buoyant activity in the emerging regions.
– Growth in the Americas was contrasted. Sales continued to rise sharply in South America while the dollar exchange rate strongly penalized revenue in the USA.
– In Asia, volumes again rose appreciably (+ 170%) compared to Q2 2007. A significant trend is undoubtedly the stability of ASP compared to last year, excluding the impact of exchange rates.
The scratch card activity was stable compared to Q2 2007.
– Payment segment[1]:
With sales of EUR83.2m, payment business grew 15% at current rates. With the acquisition of XPonCard, Oberthur has become the leading player in the Scandinavian market.
Excluding XPonCard, the whole payment segment posted revenue of EUR70.9m, despite negative impact of UK pound and US dollar exchange rate. Volumes rose 33%, with 34 million microprocessor payment cards sold during the quarter.
Market conditions are stable in well-established EMV markets. EMV rollout is proceeding progressively in Spain, Brazil and South Africa. In the USA, the magnetic stripe card market is depressed by economic conditions in the banking sector and price pressure. Conversely, growth is confirmed (+50%) in contactless cards.
The personalization services segment posted growth of 7.4% with sustained demand in all regions of the world. Oberthur is strengthening its involvement in global projects with the major banks, where it can capitalize on its network of service bureaus.
– Identity & Security[2] segment:
This segment rebounded in the second quarter with strong organic growth of 30% and sales of EUR16.1m. This good performance can be ascribed to pay TV as well as Identity.
Fiduciary and Cash Protection:
In the fiduciary segment, industrial activity is still sustained and the order book remains at an excellent level for the whole year 2008. Nevertheless, sales reached EUR25.8m in Q2 2008, due to the timing of deliveries. Annual targets remain unchanged.
In the Cash Protection segment, Q2 2008 was negatively impacted by postponement of anticipated renewals in France and Export rollouts. Q2 sales came to EUR4.1m.
Overall, Fiduciary and Cash Protection sales came to EUR29.9m, down 19% year-on-year.
Economic results
As expected, the company maintained a good level of gross margin in Q2 2008. Combined with growth in sales, this should lead to an improvement of operating income compared to H1 2007.
Outlook
On July 1st, the company announced creation of an Identity Division centralizing all its activities in this field (Card + Fiduciary). The Identity Division would have posted sales of about EUR15M in Q2 2008, a 30% growth. Recent successes (e-passports in Taiwan & in the Philippines) will positively impact 2008 sales.
Card Systems anticipates unchanged good market conditions in Q3 2008 despite still very limited visibility for telecom. Integration of XPonCard is proceeding according to plan.
Fiduciary should maintain a good level of activity. In the Cash Protection segment, renewals in the French market should remain slow. Deployments of new products abroad should progressively continue.