During the second quarter 2003, Oberthur Card Systems continued to generate the positive sales growth that has been characteristic of its performance since the end of 2002. After an excellent first quarter, the company once again delivered over 28 million microprocessor cards this quarter. In addition, its services activities increased by 6.6 percent on a sequential basis.
The value of both the US dollar and the British pound continued to decrease versus the euro, lowering sales by 3 million euros when compared with first quarter currency rates. Finally, the average selling price of microprocessor cards has decreased by 5.6 percent as a result of a change in the sales mix.
In this context, second quarter 2003 sales reached 97.1 million euros, showing a 6.4 percent decrease versus the first quarter of the year.
Despite the companyÃs withdrawal from some activities, sales for the first half 2003, before parity impact, increased by 1.5 percent on a year-on-year basis. Allowing for the foreign currency effect, the companyÃs sales for the first half reached 200.9 million euros, a 7.6 percent decline versus the first half of 2002.
Microprocessor card sales Ã 118.3 million euros – are stable on a year-on-year basis, resulting from both a 24.2 percent volume increase and a 19.6 percent average selling price decrease. Before parity impact, microprocessor card sales increased by 7.2 percent on a year-on-year basis.
With 22.2 million cards delivered since the beginning of the year, up 24.9 percent versus the first half of 2002, sales of payment cards benefited fully from the UKIS migration program currently moving at fast pace in the United Kingdom; the average selling price, however, has declined since most of the cards sold in this region are mono-application cards;
The strong increase of SIM cards deliveries – 28.5 million cards vs. 18.3 million in the first half of 2002 – results mostly from the success of the mid-range SIMtonIC offering in emerging markets. The change in the mix, with higher sales in emerging markets, explains the overall average selling price decline.
Sales of cards for the Identity & Security segment Ã encompassing a bulk of non-recurring activities Ã amounted to 18 million euros for the first half, i.e. a 22.9 percent decrease versus the strong first half 2002. At that time, the company benefited from a large Pay TV card renewal program.
Sales of Other Cards Ã banking magnetic stripe cards, loyalty cards, scratch cards and memory cards Ã totalled 38.5 million euros, showing a 21.8 percent decrease on a year-on-year basis. This anticipated decrease in sales comes equally from the companyÃs voluntary withdrawal from memory card activities as well as from the decrease in the value of the dollar versus the euro. This evolution hides stability in the magnetic stripe cards business. Activity in this area was maintained at a similar level to the previous year Ã 144 millions cards shipped Ã despite increased migration towards microprocessor cards.
Sales of Services & Solutions Ã mainly banking personalization services Ã were recorded at 44.1 million euros in the first half, down 11.6 percent versus the previous year. This decline stemmed from the voluntary withdrawal from low contribution activities in the US as well as the decrease in the value of the dollar. On a comparable basis, sales in this area increased by 1.7 percent on a year-on-year basis.
During the second quarter of 2003, the company won significant deals, including a contract to supply high-end SIM cards – SIMphonIC 3G 32 bits 128k – in the third quarter, an order of GSM cards to Turkish operator Aycell during the summer, and the signing of a three-year contract with the RATP (Parisian public transportation) for the supply and personalization of dual interface (contact / contactless) high-end cards.
In addition, Oberthur concluded partnerships with local players such as Face Technologies to address Southern African markets and Delta Singular to participate in the Greek migration program towards EMV banking standards, among other opportunities.
In order to improve the coverage of emerging markets, the company has also reinforced the manufacturing and personalization capacities of its Shenzhen (China) site.
Finally, restructuring actions undertaken during the year 2002 and pursued in 2003 should lead the company to the improvement of its first half EBIT by more than 15 million euros compared with the first half of 2002.
For more details on Oberthur’s second quarter results visit CardData (www.carddata.com).