Latest Figures Confirm: Gemplus is Smart Industry Frontrunner; 30+ percent growth in revenues and profits, market growth in all sectors and growing market leadership in the wireless arena.

Business Editors

GEMENOS, France--(BUSINESS WIRE)--March 2, 2000

Gemplus today announced record revenues for the year ended December 31, 1999. The company's revenues reached US$817 million, a 31 per cent increase over 1998. Net income was up over 35 percent on fiscal 1998, to US$35 million, re-confirming Gemplus' leadership in the smart solutions industry.

"1999 was a dynamic year for Gemplus," said Dr. Marc Lassus, chairman of Gemplus. "It was a year of transition, during which the group prepared to enter the new millennium. The company moved ahead in every area and, as a result, was able to strengthen its position as the uncontested world leader in smart solutions."

"Opportunities within the booming wireless communications market helped the company's revenues to reach US$817 million," said chief financial officer Pat Jones. "Gross margin, as a percentage of revenue was 36 per cent, and reflected an improvement of 40 per cent over last year."

The strong growth in 1999 reflects record revenue levels in each of the company's key geographic regions. Europe, traditionally Gemplus' largest market, continued its success with 34 per cent growth. The Americas region grew by 12 per cent over 1998 while Asia rebounded from 1998's regional economic difficulties with a 49 per cent jump in revenues.

"Gemplus is no longer simply a technology supplier. Thanks to its expertise in open systems, Public Key Infrastructure (PKI) and multi-application architecture, it is a major player in the development of high value-added solutions and services," Dr. Lassus said. "Gemplus is focusing on products and application tools to enable computing security for e-commerce and Internet access."

Gemplus made a number of strategic investments in integrated solutions, contactless technology and put increased focus on wireless communication opportunities, banking activities (especially electronic payment) and Internet opportunities (especially Internet security). Gemplus recently completed an equity investment of more than $300 million from Texas Pacific Group, a large US investment group, and will use the new capital to dramatically expand its presence in the wireless communications, e-commerce, and Internet security markets.

1999 Highlights

-- World-wide employment increased 37 percent to some 5,947 people.

-- Gemplus's R&D groups, totalling 600 employees, were awarded 106 patents during the year, compared to 69 in 1998. Investments in R&D activities increased by 43% to US $72 million.

-- In North America, Gemplus worked closely with American Express to develop a special reader for its Blue Card program, the region's first official launch of a smart card program by a financial services company.

-- Also, in North America, Gemplus experienced significant growth in the area of smart cards for wireless communications, supplying SIM cards to the region's GSM operators for secure subscriber authentication and roaming. Mobile Internet, mobile commerce and mobile information services integrating the SIM card technology are key growth opportunities.

-- In Mexico, as part of a consortium with Talsud and Mexican entrepreneur Henry Davis, Gemplus won a call for tender to operate the Mexican National vehicle registration system, which will provide smart cards and readers to improve tax collection, fine revenues and update of information.

-- In Argentina, Gemplus introduced value-added services to the telecommunications and retail marketplace with CANTV's new multi-application prepaid payphone smart card, which can be used for buying beverages from vending machines as well as making phone calls.

-- Gemplus initiated and led several industry forums during 1999 including Radicchio, a collaboration with leading players EDS and Ericsson designed to shape the future of m-commerce through Public Key Technology.

-- Gemplus also led negotiations with other major smart technology players to create the SIMalliance, an industry wide initiative designed to bring Internet content access to the current generation of handsets, and was a primary voice in the WAP forum.

-- Additionally, 1999 saw the development of Gemplus' Pinocchio Project, a concept card with 32 times more memory than today's most memory rich SIM cards.

-- Working with Citibank, Gemplus delivered the first fully operational banking cards to use the JavaCard Open Operating System in bank cards with contact-less applications for access control to buildings as well as a contact application including VisaCash Purse and loyalty.

-- Gemplus' GemSAFE Enterprise became the first security solution to receive Microsoft "Certification for Windows 2000.

-- Gemplus announced its new GemShield product family, the industry's first Windows-powered Smart Card. Gemplus has deployed this technology with several key pilot programs in partnership with industry leaders such as Federal Data Corporation, BRED Banque Populaire, MeritaNordbanken and AMESA.

About Gemplus

Gemplus S.A. (www.gemplus.com) is the world's leading provider of plastic and smart card-based solutions (by units sold, source: Dataquest 1998). Gemplus sells magnetic stripe cards, memory and microprocessor-based smart cards, smart contactless cards, electronic tags and smart objects. The company designs and markets software, development tools and readers. Gemplus also provides consulting, training and personalisation services to deliver the industry's most comprehensive and flexible card-based solutions to its developers, distributors, partners, and customers.

With sales of over $US817 million in 1999, Gemplus employs almost 6,000 people in 16 manufacturing facilities, 7 R&D centres and 41 sales and marketing offices located in more than 30 countries around the world. Founded in 1988, Gemplus has successfully implemented portable and secure smart card-based solutions to simplify applications such as public and wireless communications, financial transactions, loyalty, transportation, education, healthcare, identity, physical access control, pay TV, electronic commerce, Internet security, logical access control and information technology.