Axalto - Third Quarter 2005 Revenue: $227 Million.AMSTERDAM, Netherlands -- --Over 100 million microprocessor microprocessor, integrated circuit containing the arithmetic, logic, and control circuitry required to interpret and execute instructions from a computer program. cards delivered --Nine month revenue: $725 million Axalto (EURONEXT:AXL)(EURONEXT:NL0000400653) today reported third quarter 2005 revenue of $227 million, almost matching the record-breaking $228 million third quarter of 2004 revenue adjusted for Point of Sales terminals revenue deferrals. For the first nine months of 2005 Axalto posted revenue of $725 million, an 8.4% increase over the $669 million revenue recorded in the first nine months of 2004. Commenting on these results Olivier Piou, Axalto's Chief Executive Officer said: "Axalto delivered another strong performance, almost matching last year's highest-ever third quarter. The strength of our business in the Americas, the excellent start of financial contactless card deliveries, and commercial successes in the EMEA (Europe, Middle East, Africa) Refers to that region of the world. For example, one might see products packaged differently for the UK, EMEA and Asia Pacific markets. region fully compensated the predicted significant slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in Asia and delays in electronic passport passport Document issued by a national government identifying a traveler as a citizen with a right to protection while abroad and a right to return to the country of citizenship. It is normally a small booklet containing a description and photograph of the bearer. projects around the world. Axalto's balanced and distributed model, industrial flexibility and technological edge were again decisive to address the dynamic and rapidly changing market place. This quarter Axalto has demonstrated its agility and prepared its future well."
Third quarter Nine months
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Axalto 2005 2004 Percentage 2005 2004
------ --------- of the -------------
quarter's
Cards (US$ million) Total (US$ million)
Revenue
Mobile Communication 135.2 137.3 59% 430.7 377.1
Financial Cards 49.1 47.1 22% 148.2 144.5
Public Sector, Access
and Other 15.2 18.2 7% 58.6 61.5
Prepaid (memory) Phone
Cards 7.8 9.6 3% 29.4 31.0
------ --------- ---------- ------ ------
Total Cards 207.2 212.1 91% 666.9 614.1
====== ========= ========== ====== ======
POS Terminals revenue
deferrals 10.7 (1)
Point-of-sale Terminals 19.7 15.8 9% 58.2 54.9
====== ========= ========== ====== ======
Total Revenue 226.9 238.6 (2)
====== ========= ========== ====== ======
Total Revenue adjusted for
POS revenue deferrals 226.9 228.0 100% 725.1 669.0
----------------------------------- --------- ---------- ------ ------
(1) Included in the third quarter of 2004 revenue was $10.7 million of revenue in Point of Sales terminals related to first and second quarter of 2004 deliveries, whose recognition had to be deferred to the third quarter of that year in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). and IFRS IFRS International Financial Reporting Standard(s) IFRS Inter Frame Relay Service IFRS Indiana Facilities Registry System as described in Axalto previous quarterly reports. (2) Including the $10.7 million revenue deferred from the first and second quarter of 2004, and recognized in the third quarter of 2004. Further strong activity in the Cards segment Revenue in the Cards segment came to $207 million. Nine-month growth in revenue stands at +9% at $667 million. During the third quarter Axalto again delivered over 100 million microprocessor cards. The Americas region consolidated its status as the second-largest revenue contributor, accounting for 30% of Axalto Cards segment revenue this quarter. Microprocessor cards revenue continues at strong levels Mobile Communications The Mobile Communications product line revenue reached $135 million in the quarter. During the first nine months of the year, this product line has accounted for $431 million in revenue, a 14% increase on the figure of last year's comparable period. During the quarter, Axalto recorded a 17% increase in volumes of SIM cards SIM card abbr (= subscriber identity module card) → carte f SIM SIM card n (Tel) (= Subscriber Identity Module card) → SIM-Karte f sold, which topped 77 million units. Almost 2 out of every 5 cards sold during the three month period were high-end cards, a 50% increase on the comparable figure of a year ago. These progresses contributed to offsetting the SIM cards sales price reduction, which averaged 18% compared with the third quarter of 2004. Volumes continued to grow in EMEA and pricing pressure remained strong. For the first nine months of 2005, revenue growth in the EMEA region stands at +12%. As anticipated the decline in Mobile Communications revenue recorded in Asia, where activity contracted by 28% compared with the third quarter of 2004, was very significant, due to lower demand from the leading Chinese telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. operators engaged in a major reorganisation Noun 1. reorganisation - the imposition of a new organization; organizing differently (often involving extensive and drastic changes); "a committee was appointed to oversee the reorganization of the curriculum"; "top officials were forced out in the cabinet in preparation for the opening of their market to international competition following China's decision to join the World Trade Organization, and to the very high comparative base of the same period of 2004 when migration from pre-paid scratch cards scratch card n. See scratch ticket. scratch card scratch n → carte f à gratter (without a microprocessor) to entry-range microprocessor cards had been strongest in Southern Asia. Axalto considers that this present situation in Asia will develop favourably since competition between local and international mobile communications operators active in China will intensify in·ten·si·fy v. in·ten·si·fied, in·ten·si·fy·ing, in·ten·si·fies v.tr. 1. To make intense or more intense: and result in increasing requirements for the most advanced technology. With its strong presence in the region Axalto is best positioned to seize seize v. To exhibit symptoms of seizure activity, usually with convulsions. upsurges in demand. It was awarded in the recent days a major order for 17 million cards. The Americas once again posted excellent growth. Revenue was up by 52% compared with the third quarter 2004. It grew an impressive 77% over the first nine months of 2005. All growth drivers contributed to the progress. Sales volumes increased strongly, reflecting buoyant Buoyant The term used to describe a commodities market where the prices generally rise with ease when there are considerable signals of strength. Notes: These types of markets can be very volatile as the prices are rapid to rise and fall with investor sentiment. demand in the region as digital wireless communication systems penetration increases in highly populated pop·u·late tr.v. pop·u·lat·ed, pop·u·lat·ing, pop·u·lates 1. To supply with inhabitants, as by colonization; people. 2. countries, and further successes in new markets. The product mix continued to improve, supported by the excellent match of our product and service offering with rapidly evolving customers needs: high end products made up 65% of volumes sold against 40% a year ago. Financial Cards Axalto's revenue in this product line nearly reached $50 million this quarter. Nine-month revenue stands at $148.2 million. During the period, Axalto delivered over 20 million microprocessor cards. This performance results from the EMV EMV Elektromagnetische Verträglichkeit (German: Electromagnetic Compatibility) EMV EuroPay, MasterCard, Visa (Smart debit cards) EMV Europay, Mastercard and Visa EMV Eftermiddagsverksamhet migration in Europe, Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Asia as well as from initial large-scale Paypass contactless cards deployments in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. . This new payment technology is being rapidly adopted throughout the United-States and Axalto's competitive positioning at the forefront of this emerging and high-growth market is now established. Axalto expects that its first success publicly announced with Keybank will be followed by further similar contract wins with tier-one financial institutions. Public Sector, Access and Other Revenue in this product line for the quarter was $15.2 million. Nine-month revenue stands at $58.6 million. During the quarter, Axalto signed a new licence for its patent portfolio, with LG Electronics, of Korea. The product line's global revenue variation was due to lower deliveries in the pay TV business as described in the previous quarter and last year's strong comparative base when initial deliveries of new large orders - in particular to the US Department of Defense and to the Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. Department of Health - began. This product line activity remains subject to large projects timelines This article or section contains self-references. For other uses of "Timeline", see Timeline (disambiguation). The following is an index of timelines found on Wikipedia. and decision cycles, and has not yet started to benefit from the global ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale of national identity programs aimed at deploying electronic passports The following is a list of passports: By country and territory
Axalto remains perfectly positioned to take advantage of the long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. positive market dynamics of this activity and to leverage its potential. Prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. Phone Cards (memory cards, without a microprocessor)Revenue in this long-mentioned non-strategic product line continued to decrease, and represents now only 3% of Axalto's total revenue in the quarter. Point-of-sale Terminals segment Point-Of Sales Terminals segment activity grew by 24% this quarter, driven by strong gains in Asia and Africa. Including the $10.7 million accounting effect of deferred revenue related to first and second quarter 2004 deliveries which had to be recognized in the third quarter of 2004 in accordance with US GAAP and IFRS, revenue recorded in the point-of-sale terminals segment contracted by 26% during the quarter. Over the first nine-month period of 2005, i.e. on a comparable basis, revenue Point-Of Sales Terminals segment increased by 6% over the first nine-month period of 2004. Geographical break-down of revenue
Europe,
Middle
East,
Axalto Africa Asia Americas
------------------------------------- ---------- ---------- ----------
Revenue Revenue Revenue
Third quarter 2005 ($ million) ($ million) ($ million)
------------------------------------- ---------- ---------- ----------
Cards 99.8 44.5 62.9
Point-of-sale Terminals 14.3 4.3 1.1
------------------------------------- ---------- ---------- ----------
Total 114.2 48.8 64.0
------------------------------------- ---------- ---------- ----------
% Region 50% 22% 28%
------------------------------------- ---------- ---------- ----------
Unless stated otherwise, all comparisons in this document are shown on a historical exchange rate basis. About Axalto Axalto (EURONEXT:AXL)(EURONEXT:NL0000400653) is the world's leading provider (Gartner 2005, Frost & Sullivan 2004) of microprocessor cards - the key to digital networks - and a major supplier of point-of-sale terminals. Its 4,500 employees, from over 60 nationalities, serve customers in more than 100 countries, with worldwide sales reaching over 3 billion smart cards Example of widely used contactless smart cards are Hong Kong's Octopus card, Paris' Calypso/Navigo card and Lisbon' LisboaViva card, which predate the ISO/IEC 14443 standard. The following tables list smart cards used for public transportation and other electronic purse applications. to date. The company has 25 years' experience in smart card innovation and leads its industry in security technology and open systems. Axalto creates new generations of products for use in a variety of applications in the telecommunications, finance, retail, transport, entertainment, healthcare, personal identification, information technology and public sector markets. Microprocessor cards provide convenience, security and privacy to public and private services operators, their customers and end users. For more information, please visit www.axalto.com |
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