Gemalto Weighs Ventures as Company Set to Hit 2013 Target Early

Gemalto NV (GTO), the smart-chip maker that will reach its 2013 target early thanks to mobile payments, may enter new businesses and countries as it drafts a strategic plan to be unveiled in the second half of next year.

Chief Executive Officer Olivier Piou, who has run the Amsterdam-based company since it was created in 2006 through the merger of Gemplus and Axalto, said he is in the early stages of evaluating possible partnerships and acquisitions.

“We’ve identified business opportunities adjacent to what we do today,” Piou said. “We’re working on picking a few and deciding how we’ll invest in them.”

Under Piou, Gemalto has been shifting revenue from older commoditized smart chips to new security technology, predicting that the company will benefit from an increase in contactless mobile payment and machine-to-machine transmissions. It has boosted sales and margins from selling security packages based on chips and software to carriers and banks, as well as targeting new clients such as social networks.

The company’s third-quarter revenue got a lift as Apple Inc. (AAPL)’s iPhone 5 went on sale in September, along with other mobiles made for faster 4G wireless technology, prompting the need for new SIM cards. Gemalto’s sales grew 18 percent to 575 million euros ($748 million). The company confirmed it would reach its target for profit from operations of 300 million euros this year, instead of 2013.

Shares of Gemalto, which has a market value of 6.1 billion euros, jumped as much as 6.1 percent today in Paris trading. The stock, which has gained 85 percent so far this year and is the fourth-best performer on the SBF 120 index (SBF120), was up 3.8 percent at 69.45 euros as of 12:55 p.m.

“A few years ago we made a bet on new technologies, like mobile payments,” Piou said. “It has paid off and the positive trend from that will continue into 2013, and probably even until 2015. Now we want to take our time to discuss and evaluate new opportunities.”

To contact the reporter on this story: Marie Mawad in Paris at mmawad1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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