Media Release: Gemplus International S.AAAP MEDIANET GEMPLUS INTERNATIONAL SMEDIA RELEASE PR18712.

(From MediaNet Press Release Wire)

LUXEMBOURG, April 25 /PRNewswire--AsiaNet/ -- First Quarter 2005 Highlights: - Net sales down 2.1% year-on-year, impacted by extraordinarily strong sales in the quarter a year ago. - Further improvement in gross margin to 32.1%: up 1.1 percentage points. - Operating income more than doubled, to 7.5 million euros. - Strong progress in attributable net income(1), at 7.2 million euros. Gemplus International S.A. (Euronext: LU0121706294 - GEM and Nasdaq: GEMP), the world's leading provider of smart card solutions, today reported results for the first quarter ended March 31, 2005. In millions of euros Q1 2005 Q1 2004 Year-on-year change Net sales 193.1 197.3 -2.1% Adjusted for currency fluctuations, disposals and acquisitions -2.6% Gross profit 61.9 61.2 +1.1% Gross margin 32.1% 31.0% +1.1 ppt Operating expenses 54.4 57.7 -5.7% Operating income 7.5 3.5 +111.8% Operating margin 3.9% 1.8% +2.1 ppts Attributable net income 7.2 0.3 NM Free cash flow excluding non-recurring 11.9 29.6 -60.0% items(2) Cash and cash equivalents 395.1 384.6 +2.7% Per share data (in euros) Earnings per share (fully diluted) 0.01 0.00 NM Note: The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS). Commenting on the performance for the first quarter 2005, Alex Mandl, President and Chief Executive Officer, said: "This was another quarter of good progress for Gemplus, highlighted by substantial improvement in net income. The slight decrease in sales, reflecting good underlying performance, is caused by the extraordinarily strong sales we had in the quarter a year ago, and does not, in any way, change the positive view we have for the outlook of the year. Demonstrating our commitment to drive innovation for the benefit of our customers, we introduced this quarter GemXplore Generations, which is a quantum leap over current SIM technology." First quarter 2005 financial review - Income statement First quarter 2005 highlights: - Net sales down 2.1% year-on-year, impacted by extraordinarily strong sales in the quarter a year ago. - Gross margin up 1.1 percentage points, reflecting a favorable business mix. - Operating income more than doubled, to 7.5 million euros. - Strong progress in attributable net income, at 7.2 million euros. Extremely strong sales in the first quarter 2004, which were up 38.8% year-on-year, currency adjusted, led to a slight comparative decrease in sales. Nevertheless, all core businesses saw favorable revenue momentum in the first quarter 2005. This was however mitigated by declines in our mature and peripheral activities. On a geographical basis, currency adjusted revenue in the Americas rose 2.6% and in EMEA(3) by 1.0%, year-on-year, both driven by Wireless. Asia revenue was down 13.6%, currency adjusted, mainly due to China. Gross margin was up 1.1 percentage points year-on-year, to 32.1%, driven by improvement in product mix, lower chip purchasing prices and volume growth offsetting selling price pressure. The Group also benefited from the results of earlier restructuring and further improvements in the manufacturing cost structure. Operating expenses(4) decreased 5.7% year-on-year, to 54.4 million euros. This decrease …