Gemalto Reports Revenue for the First Quarter of 2007

Amsterdam (ots/PRNewswire) -

- Revenue(1) at EUR 362 million, down by 7%

- Price pressure easing in Mobile Communication

- Secure Transactions up by 7%

- ID & Security: 22% growth in Identity, lower patent licensing
revenue

- New contract wins in digital security

All revenue and average selling price variations in this press
release are by reference to the first quarter 2006 pro forma revenue and at
constant exchange rates unless otherwise mentioned.

Gemalto (Euronext NL0000400653 - GTO), a leader in digital
security, today announced its revenue for the quarter ended March 31,
2007.

EUR in millions Q1 2006 Q1 2007 Year-on-year change
pro forma1 at constant exchange
rates
Mobile Communication 229.9 194.0 (11)%
Secure Transactions 91.4 95.6 +7%
ID & Security 53.2 47.3 (9)%
Public Telephony 17.9 10.3 (39)%
Point of Sales Terminals 13.8 14.8 +12%
Total revenue 406.2 362.1 (7%)

All the figures presented in this press release are unaudited.
First quarter 2006 IFRS revenue figures are presented in Appendix 2.

Olivier Piou, Chief Executive Officer, commented: "Our revenue in
the first quarter was in line with our expectations. Execution of our
strategic plan, which combines programs to reduce costs with
initiatives to accelerate profitable growth, is making good progress:
it is expected to deliver additional benefits in the second half of
2007. Gemalto's digital security technology continues to gain market
acceptance. Going forward, we should also benefit from an improving
operating environment."

First quarter 2007 revenue analysis

Total revenue for the first quarter of 2007 was down by 7% at
constant exchange rates (and by 11% at historical exchange rates).
The decrease reflects mainly lower revenue in Mobile Communication
and Public Telephony. Secure Transactions posted solid growth on the
back of higher microprocessor card volumes delivered for payment and
pay-TV applications. In the ID & Security segment, strong momentum in
e-Identity solutions was offset by the lower patent licensing revenue
compared with a very strong first quarter of 2006.

Segment information

Mobile Communication

EUR in Q1 2006 Q1 2007 Year-on-year change Year-on-year change
millions at historical at constant exchange
Pro forma exchange rates rates
First quarter 229.9 194.0 (16%) (11%)
revenue

The revenue profile was in line with the usual pattern for a first
quarter. SIM card delivery volumes continued to increase, though at a
lower pace than in previous quarters, and were up by 9% compared with
the first quarter of 2006. Growth was driven by Asia and to a lesser
extent by EMEA(2), while deliveries were flat in the Americas.

Compared with the same period of last year, the average SIM card
selling price was down by 19% at constant exchange rates, with a
stronger percentage in total shipments of products sold in emerging
countries which use a higher proportion of low-end cards.
Nevertheless, the year-on-year average selling price decrease showed
continued improvement compared with -25% in the fourth quarter of
2006, -32% in the third quarter of 2006, and -34% in the first half
of 2006. This improvement reflects easing competitive pressure
overall and the implementation of a stricter pricing discipline since
the second half of 2006.

In the first quarter, Gemalto's digital security leadership
and high end application expertise were rewarded in the market:

- Gemalto provided a Belgian mobile operator with the world's
first secure SMS-based mobile payment service. This mobile payment
capability targets all kinds of practical services such as home
deliveries, taxi rides or baby-sitting, allowing subscribers to pay
with their mobile phone.

- Gemalto also implemented Turkcell's large-scale mobile signature
programme. Turkcell is Turkey's leading mobile operator with more
than 30 million subscribers. This solution will allow Turkcell
subscribers to securely access - from any online device - services
that require strong authentication, such as internet banking or
e-government applications, using their mobile phone to generate a
legally binding electronic signature.

- Gemalto is currently participating in about 20 mobile
contactless payment pilots throughout the world. The Company is
uniquely positioned to collaborate with consortiums of mobile
operators, banks and transport companies, offering SIM-based
contactless payment solutions. Combined with OTA(3) services,
Gemalto's solutions provide a flexible platform for a whole range of
easy-to-deploy applications, such as ticketing and mobile payment,
opening up a fresh revenue stream for the operators. Gemalto's offer
includes multi-application cards, OTA platforms for personalization
and life-cycle management, as well as a complete set of applications.

Secure Transactions (Financial Services and pay-TV)

EUR in Q1 2006 Q1 2007 Year-on-year change Year-on-year change
millions at historical at constant exchange
Pro forma exchange rates rates
First quarter 91.4 95.6 +5% +7%
revenue

Revenue growth reflects strong activity in pay-TV and continued
development in microprocessor payment solutions, including cards and
associated services.

Deliveries of microprocessor cards were up by 16%, driven by
on-going EMV(4) deployment, primarily in Europe and certain Latin
America countries.

Average selling prices decreased due to more intense competition
in certain high growth markets which are migrating to EMV and to a
greater share of modules in total deliveries on the back of rapid
development in North Asia.

The contactless payment market confirms its strong potential
with initial launches in North Asia and the United Kingdom, and new
deployments in the United States.

ID & Security

EUR in Q1 2006 Q1 2007 Year-on-year change Year-on-year change
millions at historical at constant exchange
Pro forma exchange rates rates
First quarter 53.2 47.3 (11%) (9%)
revenue

Revenue from Identity solutions grew 22% driven by e-passports, as
most projects in EMEA are now operational, as well as Government ID
and healthcare. Patent licensing revenue was as expected
significantly lower than the very high level recorded in the first
quarter of 2006. Deliveries of microprocessor products were down by
32%, due to significantly lower sales of low-end Transportation
cards.

During the quarter, Gemalto and Barclays Bank announced a
large-scale roll out of a two-factor authentication smart card
solution for online banking designed to prevent online fraud. The
contract includes the provision of authentication devices and a full
service encompassing design of custom card readers, fulfilment and
distribution to the final users.

In February 2007, Gemalto launched its Network Identity Manager
(NIM) solution, a self-contained and portable network security device
which plugs into a USB port, works with a standard browser, runs on
any PC and does not require any software installations or downloads.
This easy-to-use solution allows online consumers to take control of
their own network security by protecting themselves against identity
theft. Gemalto is targeting leading organizations with large online
communities who would issue NIM devices to their customers.

Public Telephony

EUR in Q1 2006 Q1 2007 Year-on-year change Year-on-year change
millions at historical at constant exchange
Pro forma exchange rates rates
First quarter 17.9 10.3 (42%) (39%)
revenue

The continuing sharp decline of the memory card market for Public
Telephony is attributable to the broader usage of mobile telephony
worldwide.

Point-of-Sale Terminals

EUR in Q1 2006 Q1 2007 Year-on-year change Year-on-year change
millions at historical at constant exchange
Pro forma exchange rates rates
First quarter 13.8 14.8 +8% +12%
revenue

First quarter revenue growth was supported by the successful
introduction of a new range of products developed on a common, highly
adaptable new technology platform.

Regional analysis

First quarter revenue by region

EUR in millions Q1 2006 Q1 2007 Year-on-year Year-on-year
Pro forma change at change at
historical constant
exchange rates exchange rates
EMEA 222.6 208.7 (6%) (5%)
North & South 97.4 75.9 (22%) (16%)
America
Asia 86.2 77.6 (10%) (2%)
Total revenue 406.2 362.1 (11%) (7%)

Regional analysis shows a shift in revenue contribution by region:
Europe, Middle-East and Africa (EMEA) accounted for 58% of first
quarter 2007 revenue compared with 55% a year ago, mainly due to a
stronger performance in Secure Transactions and to the appreciation
of the euro relative to the US dollar and currencies linked to it.
The Americas accounted for 21% of first quarter 2007 revenue compared
with 24% a year ago, reflecting lower revenue in Mobile Communication
revenue and Public Telephony, as well as a weaker US dollar.

Outlook

In the first half of 2007, demand in Mobile Communication is
mainly driven by emerging countries and the revenue profile is
therefore expected to consist primarily of entry and mid-range
products. Furthermore, in the first half of 2007, Gemalto's operating
margin(5) will not benefit from the unusually high patent licensing
revenue and positive one-off items booked in the same period of 2006.
Cost synergies from the combination are materializing progressively
in line with the Company's expectations, but they will not be
sufficient to offset the adverse effect on the operating margin5 of
the strong price decline of last year.

In the second half of 2007, operating margin5 should reflect the
usual favorable seasonal pattern and the increasing contribution of
the first digital security solutions deployments. It will also
benefit from additional cost synergies from the combination.

Gemalto continues to anticipate sustained demand in all of its key
markets. It will continue to proactively make the necessary
adjustments to its cost base and remains determined to reach its
stated objective of an operating margin5 above 10% in 2009.

Reporting calendar

The annual general shareholders' meeting will be held in Amsterdam
on May 22, 2007.

Second quarter 2007 revenue will be reported on July 26, 2007,
before the opening of Euronext Paris.

First half 2007 earnings will be reported on September 13, 2007,
before the opening of Euronext Paris.

Conference call

The company has scheduled a conference call for today at 3:00 pm
CET (2:00 pm BST and 9:00 am New-York time). Callers may participate
in the live conference call by dialling:

+44-(0)207-138 0843 or +1-718-354-1152 or +33-1-70-99-42-82.

The slide show will be posted on the Company's web site at
noon CET (11:00 BST).

Replays of the conference call will be available approximately
3 hours after the conclusion of the conference call until May 9, 2007
midnight by dialling:

+44-(0)-207-806-1970 or +1-718-354-11-12 or +33-1-71-23-02-48
access code: 4322285#.

Corporate Communication
Rémi CALVET
M.: +33(0)-6-22-72-81-58
remi.calvet@gemalto.com
Corporate Media Relations
Emmanuelle SABY
M.: +33(0)-6-09-10-76-10
emmanuelle.saby@gemalto.com
Emlyn Korengold
TBWA
T. : +33-(0)6-08-21-93-74
emlyn.korengold@tbwa-corporate.com
Investors Relations
Stéphane BISSEUIL
T.: +33(0)-1-55-01-50-97
stephane.bisseuil@gemalto.com
FINEO
T.: +33(0)-1-56-33-32-31
gemalto@fineo.com

About Gemalto

Gemalto (Euronext NL 0000400653 GTO) is a leader in digital
security with pro forma 2006 annual revenues of EUR1.7 billion,
operations in about 100 countries and over 10,000 employees including
1,500 R&D engineers.

In a world where the digital revolution is increasingly
transforming our lives, Gemalto's solutions are designed to make
personal digital interactions more convenient, secure and enjoyable.

Gemalto provides end-to-end digital security solutions, from the
development of software applications through design and production of
secure personal devices such as smart cards, SIMs, e-passports, and
tokens to the management of deployment services for its customers.

More than a billion people worldwide use the company's
products and services for telecommunications, financial services,
e-government, identity management, multimedia content, digital rights
management, IT security, mass transit and many other applications.

Gemalto was formed in June 2006 by the combination of Axalto
and Gemplus.

For more information please visit www.gemalto.com

This communication does not constitute an offer to purchase or
exchange or the solicitation of an offer to sell or exchange any
securities of Gemalto.

This communication contains certain statements that are neither
reported financial results nor other historical information and other
statements concerning Gemalto. These statements include financial
projections and estimates and their underlying assumptions,
statements regarding plans, objectives and expectations with respect
to future operations, events, products and services and future
performance. Forward-looking statements are generally identified by
the words "expects", "anticipates", "believes", "intends",
"estimates" and similar expressions. These and other information and
statements contained in this communication constitute forward-looking
statements for purposes of applicable securities laws. Although
management of the company believes that the expectations reflected in
the forward-looking statements are reasonable, investors and security
holders are cautioned that forward-looking information and statements
are subject to various risks and uncertainties, many of which are
difficult to predict and generally beyond the control of the
companies, that could cause actual results and developments to differ
materially from those expressed in, or implied or projected by, the
forward-looking information and statements, and the companies cannot
guarantee future results, levels of activity, performance or
achievements. Factors that could cause actual results to differ
materially from those estimated by the forward-looking statements
contained in this communication include, but are not limited to: the
ability of the company's to integrate according to expectations; the
ability of the company to achieve the expected synergies from the
combination; trends in wireless communication and mobile commerce
markets; the company's ability to develop new technology and the
effects of competing technologies developed and expected intense
competition generally in the companies' main markets; profitability
of expansion strategy; challenges to or loss of intellectual property
rights; ability to establish and maintain strategic relationships in
their major businesses; ability to develop and take advantage of new
software and services; the effect of the combination and any future
acquisitions and investments on the companies' share prices; changes
in global, political, economic, business, competitive, market and
regulatory forces; and those discussed by the companies in filings,
submissions or furnishings to the SEC, including under the headings
"Cautionary Statement Concerning Forward-Looking Statements" and
"Risk Factors". Moreover, neither the companies nor any other person
assumes responsibility for the accuracy and completeness of such
forward-looking statements. The forward-looking statements contained
in this communication speak only as of the date of this communication
and the companies are under no duty, and do not undertake, to update
any of the forward-looking statements after this date to conform such
statements to actual results, to reflect the occurrence of
anticipated results or otherwise except as otherwise required by
applicable law or regulations.

Appendix 1

Deliveries of secure personal devices

In millions of units Q1 06 Q1 07 % growth
Pro forma
SIM cards 197.1 215.3 +9%
Secure transactions 45.5 52.9 +16%
ID & Security 9.5 6.4 -32%
Total 252.1 274.6 +9%

Appendix 2

IFRS FINANCIAL INFORMATION

Note: the combination between Gemalto and Gemplus was effective on
June 2, 2006, and Gemplus activity was fully consolidated with that
of Gemalto as from that date.

First quarter revenue by segment

EUR in millions Q1 06 Q1 07
Mobile Communication 93.8 194.0
Secure Transactions 36.0 95.6
ID & Security 26.6 47.3
Public Telephony 5.7 10.3
Point of Sales Terminals 13.8 14.8
Total revenue 175.9 362.1

---------------------------------

(1) First quarter 2006 revenue and volume of deliveries reported
in this press release were prepared on a pro forma basis, and reflect
the combined activity of Gemalto and Gemplus over the corresponding
period.

(2) Europe, Middle East, Africa

(3) Over-The-Air

(4) EMV is a jointly defined set of specifications adopted by
Europay, MasterCard and Visa for the migration of bank cards to smart
card technology.

(5) Prepared on an Adjusted basis (Adjusted pro forma basis for
2006), excluding one-off expenses incurred in connection with the
combination with Gemplus, reorganization charges and charges
resulting from the accounting treatment of the transaction, and
assuming that the combination had taken place as of January 1, 2005.

ots Originaltext: Gemalto
Im Internet recherchierbar: http://www.presseportal.de

Contact:
Corporate Communication: Remi CALVET, M.: +33(0)-6-22-72-81-58,
remi.calvet@gemalto.com. Corporate Media Relations: Emmanuelle SABY,
M.: +33(0)-6-09-10-76-10, emmanuelle.saby@gemalto.com. Emlyn
Korengold: TBWA, T. : +33-(0)6-08-21-93-74,
emlyn.korengold@tbwa-corporate.com. Investors Relations: Stephane
BISSEUIL, T.: +33(0)-1-55-01-50-97, stephane.bisseuil@gemalto.com.
FINEO, T.: +33(0)-1-56-33-32-31, gemalto@fineo.com