Gemalto Reports Revenue for the Second Quarter of 2007

Regulatory News:

-- Revenue(1) for the second quarter at EUR 398 million

-- SIM card average selling price up 7% sequentially(2)

-- New contract wins in digital security

-- Active streamlining of the cost structure

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All revenue and average selling price variations in this press release
are by reference to the second quarter and first half 2006 pro forma
revenue and are stated at constant exchange rates unless otherwise
mentioned.
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Gemalto (Euronext NL0000400653 - GTO), the leader in digital
security, today announced its revenue for the quarter ended June 30,
2007.

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EUR in millions Year-on-year Year-on-year
change at change at
Q2 2007 constant H1 2007 constant
exchange exchange
rates(1) rates(1)
----------------------------------------------------------------------
Mobile Communication 223.7 (10%) 417.8 (11%)
----------------------------------------------------------------------
Secure Transactions 97.2 0% 192.8 +4%
----------------------------------------------------------------------
ID & Security 50.8 (1%) 98.1 (5%)
----------------------------------------------------------------------
Public Telephony 11.6 (18%) 22.0 (29%)
----------------------------------------------------------------------
Point of Sales
Terminals 14.3 +34% 29.2 +22%
----------------------------------------------------------------------
Total revenue 397.8 (6%) 759.9 (6%)
----------------------------------------------------------------------
*T

All the figures presented in this press release are unaudited.
Second quarter and first half 2006 IFRS revenue figures are presented
in Appendix 2.

Commenting on the revenue for the second quarter 2007, Olivier
Piou, Chief Executive Officer, said: "The performance of our mobile
communication activity was in line with our expectations, reflecting
our strict pricing discipline. Also there are encouraging signs that
demand for higher-end products and services is picking-up. One year
after establishing Gemalto and articulating our digital security
vision, we are winning meaningful contracts in all our segments. In
particular, we were honored to be awarded in June the large AOK
e-healthcare tender in Germany. Our contactless payment solution also
met with increasing success in Asia. In parallel, further measures
were implemented to adapt our cost structure to the market
environment. We remain confident that our operating performance in the
second half of the year will reflect the benefits of our strategy
which combines cost reduction programs with initiatives for profitable
growth."

Second quarter 2007 revenue analysis

Total revenue for the second quarter of 2007 was 398 million
euros, down by 6% at constant exchange rates (and by 10% at historical
exchange rates). The decrease reflects mainly lower revenue in Mobile
Communication and Public Telephony.

Segment information

Mobile Communication

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EUR in millions Year-on-year H1 2007 Year-on-year
change at Pro forma change at
Q2 2007 constant constant
exchange exchange
rates rates
----------------------------------------------------------------------
Revenue 223.7 (10%) 417.8 (11%)
----------------------------------------------------------------------
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Demand across all regions remained strong while the market
continued to be very competitive in entry range SIM cards. Gemalto
maintained the strict pricing discipline implemented since the third
quarter of 2006. As a result:

-- The SIM card average selling price evolution showed marked
improvement: in the second quarter, it was up by 7%
quarter-on-quarter(3), leading to a 10% year-on-year erosion.

-- SIM card delivery volumes were down 1% compared with the
second quarter of 2006. Growth in Europe and in the Americas
which use a higher proportion of high-end cards was offset by
lower deliveries to emerging markets, the consequence of
Gemalto's selective pricing approach to tenders.

Software and services reported strong revenue growth in the second
quarter. Several significant customer successes were announced during
the quarter which highlights Gemalto's digital security leadership and
high end application expertise:

-- Advanced Info Service Plc, Thailand's largest mobile operator,
successfully completed a comprehensive Over-The-Air update
campaign for nearly 8 million subscribers in less than 40
days, providing major benefits to the operator, notably strong
customer satisfaction and cost savings.

-- Orange in Senegal and Mali selected Gemalto's Over-The-Air
managed services to update all SIM-based devices in the field.
Orange used Gemalto's services in its rebranding campaign, to
raise awareness among its subscribers of its new commercial
brands and inform them in a direct and efficient way.

-- North African operator Meditel selected Gemalto's phonebook
backup solution which offers subscribers to easily manage and
save their contacts on demand, directly from their handsets or
through the operator's website. This service has proven to
offer strong "anti-churn ability" as it allows the operator's
customers to restore their personal data upon replacing a lost
or stolen mobile phone.

Secure Transactions

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EUR in millions Year-on-year H1 2007 Year-on-year
change at Pro forma change at
Q2 2007 constant constant
exchange exchange
rates rates
----------------------------------------------------------------------
Revenue 97.2 0% 192.8 +4%
----------------------------------------------------------------------
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Deliveries of microprocessor cards and modules were up by 10%,
driven by on-going EMV(4) deployment and card renewal programs,
primarily in Europe. Revenue derived from related personalization
services also increased. However, price pressure in certain EMV
markets offset those gains.

The revenue of the quarter benefited from strong activity in
pay-TV and the first large scale contactless payment solution
deployments in Asia.

During the quarter, Gemalto announced the introduction of smart
card technology with biometric authentication to simplify access to
financial services for the under-banked population in India. Gemalto
was also selected as exclusive EMV migration launch partner to provide
Citibank Taiwan with an EMV turnkey solution.

ID & Security

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EUR in millions Year-on-year H1 2007 Year-on-year
change at Pro forma change at
Q2 2007 constant constant
exchange exchange
rates rates
----------------------------------------------------------------------
Revenue 50.8 (1%) 98.1 (5%)
----------------------------------------------------------------------
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Revenue from Identity solutions was stable with strong growth in
electronic passports and Identity solutions driven by 29 national
projects being deployed.

Revenue was lower in e-healthcare compared with the second quarter
of 2006 when a large project was deployed in Latin America. Moreover,
revenues from recently won large projects were only in their ramp-up
phase during the second quarter of 2007.

Security Solutions revenue was down 7% on lower deliveries of
microprocessor devices in the Americas.

Patent licensing activity was strong and generated revenue of 14.1
million euros in the first half of 2007. It was lower however compared
with the unusually high 24.0 million euros reported in the first half
of 2006.

During the quarter, the health insurance company AOK (Allgemeine
Ortskrankenkasse) awarded Gemalto with a large contract to supply and
personalize 35 million electronic healthcards for German citizens. The
Company also delivered the first electronic driver licenses in Mexico
from the 900,000 unit order received earlier in the quarter.

Public Telephony

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EUR in millions Year-on-year H1 2007 Year-on-year
change at Pro forma change at
Q2 2007 constant constant
exchange exchange
rates rates
----------------------------------------------------------------------
Revenue 11.6 (18%) 22.0 (29%)
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The continuing decline of the memory card market for Public
Telephony is attributable to the broader usage of mobile telephony
worldwide.

Point-of-Sale Terminals

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EUR in millions Year-on-year H1 2007 Year-on-year
change at Pro forma change at
Q2 2007 constant constant
exchange exchange
rates rates
----------------------------------------------------------------------
Revenue 14.3 +34% 29.2 +22%
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Second 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

Second quarter revenue by region

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EUR in millions Q2 2006 Year-on-year Year-on-year
Pro forma change at change at
Q2 2007 historical constant
exchange exchange
rates rates
----------------------------------------------------------------------
EMEA 226.6 219.3 (3%) (2%)
----------------------------------------------------------------------
North & South America 114.6 91.4 (20%) (14%)
----------------------------------------------------------------------
Asia 98.8 87.1 (12%) (7%)
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Total revenue 440.1 397.8 (10%) (6%)
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Regional analysis shows a shift in revenue contribution by region:
Europe, Middle-East and Africa (EMEA) accounted for 55% of second
quarter 2007 revenue compared with 51% a year ago, mainly due to a
stronger performance in Identity & Security and to the appreciation of
the euro relative to the US dollar and currencies linked to it.

Outlook

In the first half of 2007, demand in Mobile Communication was
mainly driven by emerging countries and Gemalto's revenue profile
therefore consists 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 margin(5) of the strong
price decline of last year.

In the second half of 2007, operating margin(5) should reflect the
usual favorable seasonal pattern and the increasing contribution of
the first digital security solutions deployments. The Company will
also benefit from additional cost synergies from the combination.

Gemalto continues to anticipate sustained demand in all of its key
markets. The Company will continue to proactively make the necessary
adjustments to its cost base and remains determined to reach its
stated objective of an operating margin(5) above 10% in 2009.

Reporting calendar

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

Conference call

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The Company has scheduled a conference call for today at 3:00 pm CET
(2:00 pm BST and 9:00 am EST). Callers may participate in the live
conference call by dialing:

+44 (0) 207 806 1966 or +1 718 354 1390 or +33 1 70 99 42 98.

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

Replays of the conference call will be available approximately 3 hours
after the conclusion of the conference call until August 1, 2007
midnight by dialing:

+44 (0) 207 806 1970 or +1 718 354 11 12 or +33 1 71 23 02 48
access code: 3109604#.
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About Gemalto

Gemalto (Euronext NL 0000400653 GTO) is the leader in digital
security with pro forma 2006 annual revenues of EUR 1.7 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

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In millions of units Q2 06 Q2 07 % growth H1 06 H1 07 % growth
Pro forma
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SIM cards 233 230 (1%) 430 445 +4%
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Secure transactions 52 58 +11% 97 111 +13%
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ID & Security 8 8 +1% 18 15 (17%)
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Total 293 296 +1% 545 570 +5%
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Appendix 2

PRO FORMA FINANCIAL INFORMATION

Second quarter revenue by business segment

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In millions of euros Q2 06 % change at % change at
Pro forma Q2 07 historical constant
exchange exchange
rates rates
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Mobile Communication 260.8 223.7 (14%) (10%)
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Secure transactions 99.9 97.2 (3%) 0%
----------------------------------------------------------------------
ID & Security 53.4 50.8 (5%) (1%)
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Public Telephony 15.0 11.6 (22%) (18%)
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Point of Sales
Terminals 11.0 14.3 +30% +34%
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Total revenue 440.1 397.8 (10%) (6%)
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First half revenue by business segment

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In millions of euros H1 06 % change at % change at
Pro forma H1 07 historical constant
exchange exchange
rates rates
----------------------------------------------------------------------
Mobile Communication 490.7 417.8 (15%) (11%)
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Secure transactions 191.3 192.8 +1% +4%
----------------------------------------------------------------------
ID & Security 106.6 98.1 (8%) (5%)
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Public Telephony 32.9 22.0 (33%) (29%)
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Point of Sales
Terminals 24.8 29.2 +18% +22%
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Total revenue 846.3 759.9 (10%) (6%)
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Appendix 3

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.

Second quarter and first half revenue by segment

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EUR in millions Q2 06 Q2 07 H1 06 H1 07
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Mobile Communication 170.0 223.7 263.8 417.8
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Secure Transactions 69.7 97.2 105.7 192.8
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ID & Security 33.9 50.8 60.5 98.1
----------------------------------------------------------------------
Public Telephony 7.2 11.6 12.9 22.0
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Point of Sales
Terminals 11.0 14.3 24.8 29.2
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Total revenue 291.8 397.8 467.7 759.9
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(1) Second quarter and first half 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) At constant exchange rates

(3) At constant exchange rates

(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.