Gemalto Sees Doubling of Operating Profit on Security Software

Gemalto NV (GTO) forecast a doubling of its operating profit by 2017 amid greater demand for its chips and software that make bank cards and mobile phones more secure.

Operating profit may reach 600 million euros ($788 million) that year, doubling from 2012, the Amsterdam-based company said in a statement yesterday. Revenue from the platforms and services unit will grow more than 20 percent annually to reach 1 billion euros by 2017, accounting for about half of Gemalto’s projected sales growth in the period, it said.

Under Chief Executive Officer Olivier Piou, Gemalto has shifted away from commoditized chips to sell more lucrative packages including security software. Its clients include mobile-phone carriers and banks, as well as companies ranging from Volkswagen AG’s Audi division to Facebook Inc.

Piou, who so far has bet on the need to improve the security of new technologies -- the likes of mobile payments and machine-to-machine transmissions -- predicts there are more opportunities for Gemalto in mobile money and mobile identification.

Piou returned Gemalto to profit in 2008, and last year net income rose 25 percent to 201 million euros. Joining France’s leading stock index, the CAC 40, in December, marked another milestone for the executive. A 55-year-old engineer, Piou has headed the company since the 2006 merger of Gemplus International SA and Axalto Holding NV.

Shares of Gemalto have gained 27 percent this year. The stock slipped 0.7 percent to 86.26 euros yesterday in Amsterdam trading.

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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