GEMPLUS INTERNATIONAL S.A.
Table of Contents



FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934

For the month of April 2005

GEMPLUS INTERNATIONAL S.A.
(Exact name of registrant as specified in its charter)

GEMPLUS INTERNATIONAL S.A.
(Translation of registrant’s name in English)

46A, Avenue J.F. Kennedy
L-1855 Luxembourg
Grand Duchy of Luxembourg

(Address of Principal Executive Offices)

(Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.)

     
Form 20-F  þ   Form 40-F  o

(Indicate by check mark whether the registrant by
furnishing the information contained in this form
is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)

     
Yes  o   No  þ



(GEMPLUS LOGO)

 


TABLE OF CONTENTS

Gemplus reports strong first quarter 2005 results
Press Release – Financial statements
Consolidated Statements of Income
Consolidated Balance Sheets
Consolidated Statements of Cash Flows
SIGNATURE


Table of Contents

Gemplus reports strong first quarter 2005 results

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 income1 , at 7.2 million euros.

Luxembourg, April 25, 2005 — 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.

                         
                    Year-on-year  
In millions of euros   Q1 2005     Q1 2004     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 items2
    11.9       29.6       -60.0 %
 
                 
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

 


1   Net income attributable to equity holders of the Company.
2   Free cash flow excluding non recurring items is defined as net cash flow from operating activities less the purchase of property, plant and equipment and other investments related to the operating cycle (excluding acquisitions and financial investments).

(GEMPLUS LOGO)

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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 EMEA3 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 expenses4 decreased 5.7% year-on-year, to 54.4 million euros. This decrease was mostly driven by a temporary reduction in research and development expenses and no further goodwill amortization. The decrease was despite the cost of stock options and implementation of the Sarbanes-Oxley Act. Operating expenses represented 28.2% of sales during the first quarter, compared to 29.3% a year ago.

As a result, operating income more than doubled, to 7.5 million euros.

Consequently, attributable net income for the first quarter showed strong improvement to 7.2 million euros.

  Balance sheet and cash flow statement

First quarter 2005 highlights:

    Substantial free cash flow before non-recurring items of 11.9 million euros.
 
    Continuous strong cash position, at 395.1 million euros.

 


3   Europe, Middle East and Africa
4   Includes 1.7 million euros of goodwill amortization and restructuring expenses in the first quarter 2004, and the expensing of stock options from the first quarter 2005.

(GEMPLUS LOGO)

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The Group’s cash position remains strong and is up 6.7 million euros compared to December 31, 2004, despite restructuring outflows of 3.1 million euros.

Segment analysis

  Telecom

First quarter 2005 highlights:

    Good underlying performance in wireless: moderate revenue growth reflects extraordinary sales a year ago.
 
    Strong improvement in operating profit: +38.5%.
                                 
                            Adjusted5  
In millions of euros   Q1 2005     Q1 2004     % change     change (%)  
Wireless products & services net sales
    132.7       127.1       +4.3 %     +3.3 %
Wireless gross profit
    51.1       48.8       +4.9 %        
Wireless gross margin
    38.6 %     38.4 %     +0.2 ppt          
Prepaid phone cards & scratchcards net sales
    11.6       19.5       -40.5 %     N/A  
Prepaid phone cards & scratchcards gross profit
    1.2       0.9       +23.9 %        
Prepaid phone cards & scratchcards gross margin
    9.9 %     4.8 %     +5.1 ppts          
Telecom net sales
    144.3       146.6       -1.6 %     -2.4 %
Telecom gross profit
    52.3       49.7       +5.2 %        
Telecom gross margin
    36.3 %     33.9 %     +2.4 ppts          
Telecom operating expenses
    35.8       37.8       -5.2 %        
As a % of sales
    24.8 %     25.8 %     -1.0 ppt          
Telecom operating profit
    16.5       11.9       +38.5 %        
Operating margin
    11.4 %     8.1 %     +3.3 ppts          

Wireless revenue continues to show favorable momentum. Extraordinarily strong sales in the first quarter 2004, which were up 70.8% year-on-year, currency adjusted, led to a moderate increase in sales this quarter.

Wireless shipments grew 14% year-on-year, to 68.2 million units. Growth was driven by strong sales in EMEA and Latin America, compensating for lower sales in China.

Wireless product mix continued to improve:

    The share of high-end card shipments more than doubled year-on-year, accounting for 44.3% of the total in the first quarter 2005.
 
    In comparison with the fourth quarter 2004, the share of high-end cards decreased slightly, reflecting a usual shift in the regional mix for the first quarter. Nevertheless, the product mix improved sequentially in EMEA and South-East Asia.

 


5   Adjusted for currency fluctuations, disposals & acquisitions

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    3G cards continued to make good progress, already representing close to 10% of total first quarter shipments.

Wireless average selling price (ASP) was down 9.2% year-on-year and 11.0% quarter-on-quarter, both currency adjusted. Substantial mix improvement did not fully offset strong price pressure, year-on-year.

Wireless gross margin was stable year-on-year, due to lower chip purchasing prices and good progress in manufacturing efficiency, offsetting price pressure.

Telecom gross margin improved 2.4 percentage points year-on-year, due to a more favorable business mix.

Operating expenses decreased 5.2% year-on-year. Correspondingly, operating profit rose 38.5% and the operating margin was up 3.3 percentage points, to 11.4%.

  Financial Services
 
First quarter 2005 highlights:

    The EMV6 deployment continues: roll-out and initiatives in new countries.
                         
In millions of euros   Q1 2005     Q1 2004     % change  
Net sales
    37.9       40.4       -6.0 %
Adjusted for currency fluctuations, disposals & acquisitions
                    -3.4 %
Gross profit
    5.8       9.1       -36.4 %
Gross margin as a % of sales
    15.3 %     22.7 %     -7.4 ppts  
Operating expenses
    10.4       11.9       -12.6 %
As a % of sales
    27.4 %     29.5 %     -2.1 ppts  
Operating profit
    -4.6       -2.8       NM  
Operating margin as a % of sales
    -12.1 %     -6.8 %     -5.3 ppts  

Despite significant EMV growth, revenue was down, due to lower sales in Pay-TV and Metering, and the cannibalization of other payment and conventional cards. Gemplus shipped 12.8 million units of payment microprocessor cards, up 20.0% year-on-year. Payment microprocessor card revenue rose 14.9% year-on-year.

Gross margin was influenced by one-time costs related to reorganization of European manufacturing operations as well as product mix.


6   EMV is a jointly defined set of specifications adopted by Europay, MasterCard and Visa for the migration of bank cards to smart card technology.

(GEMPLUS LOGO)

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  Identity and Security

First quarter 2005 highlights:

    Continued progress in Enterprise Security projects.
                         
In millions of euros   Q1 2005     Q1 2004     % change  
Net sales
    10.9       10.3       +5.8 %
Adjusted for currency fluctuations, disposals & acquisitions
                    +5.4 %
Gross profit
    3.8       2.4       +57.6 %
Gross margin as a % of sales
    34.6 %     23.2 %     +11.4 ppts  
Operating expenses
    8.2       8.0       +2.2 %
As a % of sales
    74.7 %     77.3 %     -2.6 ppts  
Operating profit
    -4.4       -5.6       NM  
Operating margin as a % of sales
    -40.1 %     -54.1 %     +14.0 ppts  

Revenue was up 5.8% year-on-year, with a strong increase in Enterprise Security projects. In addition, the customer base significantly broadened over the quarter a year ago which was heavily weighted with a single national ID project.

Gemplus’ strategy to focus on selling subsystems based on software components, value-added services and high-end cards led to a significant shift in the sales mix and a large improvement in gross margin.

Outlook

The Group continues to see strong momentum in its core markets. Notwithstanding the apparent slow start in the first quarter, Gemplus expects to increase revenue, excluding acquisitions, by around 10% in 2005, despite continuous selling price pressure.

The Company continues to focus on cost efficiency and is confident of being able to show a very strong improvement of operating income in 2005.

The Group also expects the Financial Services and ID & Security business units to become profitable in 2006.

With all of this, the Group is well on track to realize its mid-term objective of a 10% operating margin in 2007.

Change in accounting policies

Beginning this quarter, foreign exchange gains or losses arising from the Company’s business activities and qualified hedges under IAS 39 are no longer exclusively recorded in cost of sales. Instead, the gains or losses are allocated to the portion of the income statement relating to the underlying currency exposure.

(GEMPLUS LOGO)

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Starting January 1, 2005, the Company adopted IFRS 2 (issued 2004) “Share-based Payment” and IFRS 3 (issued 2004) “Business Combinations”. Please refer to Note 2.4 “Change in accounting policies” of our 2004 Annual Report for further details.

Business Highlights

  Telecom

Gemplus is supporting operators in overcoming the challenges they face in entering the mobile multimedia age by introducing at this year’s 3GSM World Congress a new extended storage capacity SIM card platform, GemXplore Generations. Since that time, a number of operators have shown great interest in the card, including the French operator, Bouygues Telecom.

This platform, which offers gigabyte storage capacity, flexibility and performance, allows operators to reinforce brand, uniformity of service and subscriber convenience by encouraging new uses for the mobile phone, from Mobile TV, as presented with Nagra and Thales, to storing html web servers, as demonstrated with Orange World.

  Identity and Security

This quarter saw the involvement of Gemplus in one of the world’s first commercial e-passport deployments: Singapore’s new biometric passport. Gemplus’ contactless e-passport solution, GemBorder, which will be embedded in the passport, will contain biometric information about the passport holder such as fingerprint and facial details. The passport holder can be authenticated against the information on the chip at immigration checkpoints. Gemplus will also supply chip personalization solution and integration service bricks.

In addition, Gemplus delivered over 100,000 GemSCOSTA optical smart cards to the first phase of India’s vehicle registration and drivers’ license program. This program is expected to be the world’s largest of its kind, with a market potential of more than 100 million cards over the next five years.

Earnings calendar

Second quarter 2005 results are scheduled to be reported on July 27, 2005, before the opening of Euronext Paris.

Conference Call:

The company has scheduled a conference call for Monday, 25 April 2005 at 2:00 pm CET (1:00 pm GMT and 8:00 am New-York time). Callers may participate in the live conference call by dialing:

+44 (0) 207 784 1018 or +1 718 354 1171, access code 9245589.

The slide show will be available on the web site at 12:30 CET (11:30 GMT). The webcast will also be available on the IR section of www.gemplus.com.

(GEMPLUS LOGO)

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Replays of the conference call will be available approximately 5 hours after the conclusion of the conference call until May 9th, 2005 midnight by dialing:

+44 (0) 207 784 1024 or +1 718 354 11 12, access Code: 9245589.

About Gemplus

Gemplus International S.A. (Euronext: LU0121706294 — GEM and NASDAQ: GEMP) is the world’s leading player in the smart card industry in both revenue and total shipments (source: Gartner-Dataquest (2004), Frost & Sullivan, Datamonitor.). It has sold over 5 billion smart cards.

With security at its core, and 2400 patents produced by its innovative R&D team, Gemplus delivers a wide range of portable, personalized solutions in areas including Identity, Mobile Telecommunications, Public Telephony, Banking, Retail, Transport, Healthcare, WLAN, Pay-TV, e-government, and access control.

Gemplus’ revenue in 2004 was 865 million euros.

www.gemplus.com

For more information:

     
Press
Gemplus
Jane Strachey
Tel: +33 (0) 4 42 36 46 61
Mob: +33 (0) 6 79 46 35 93
Email: jane.strachey@gemplus.com
  Investor Relations
Gemplus
Celine Berthier
Tel: +41 (0) 22 544 5054
 
Email: celine.berthier@gemplus.com
 
   
Edelman
Stephen Benzikie
Tel: +44 (0) 207 344 1325
Mob: +44 (0) 774 003 8929
Email: stephen.benzikie@edelman.com
  Fineo
 
Tel: +33 (0) 1 56 33 32 31
 
Email: investors@gemplus.com

©2005 Gemplus. All rights reserved. Gemplus, the Gemplus logo, are trademarks and service marks of Gemplus S.A. and are registered in certain countries. All other trademarks and service marks, whether registered or not in specific countries, are the property of their respective owners.

Some of the statements contained in this release constitute forward-looking statements. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activities, performance, or achievements expressed or implied by such forward-looking statements. Actual events or results may differ materially. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we 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 release include, but are not limited to: trends in wireless communication and mobile commerce markets; our ability to develop new technology, and the effects of competing technologies developed and expected intense competition generally in our main markets; profitability of our expansion strategy; challenges to or loss of our intellectual property rights; our ability to establish and maintain strategic relationships in our major businesses; our ability to develop and take advantage of new software and services; and the effect of future acquisitions and investments on our share price. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of such forward-looking statements. The forward-looking statements contained in this release speak only as of this release. We are under no duty to update any of the forward-looking statements after this date to conform such statements to actual results or to reflect the occurrence of anticipated results.

(GEMPLUS LOGO)

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Gemplus International SA

 

 

Gemplus International SA

Press Release — Financial statements

For the quarterly period ended March 31, 2005

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Gemplus International SA


Consolidated Statements of Income

                 
    (in thousands of euros,
except shares and per share amounts)
 
    Three months ended  
    March 31,  
    2005     2004  
    (unaudited)  
Net sales
    193,102       197,289  
Cost of sales
    (131,210 )     (136,041 )
 
               
Gross Profit
    61,892       61,248  
 
               
Research and development expenses
    (12,981 )     (16,105 )
Selling and marketing expenses
    (25,707 )     (24,230 )
General and administrative expenses
    (16,101 )     (15,662 )
Restructuring expenses
    438       188  
Other operating income (expense), net
    (52 )      
Goodwill amortization and impairment
          (1,903 )
 
               
Operating income
    7,489       3,536  
 
               
Financial income (expense), net
    1,795       1,333  
Share of profit (loss) of associates
    (824 )     (2,767 )
Other non-operating income (expense), net
    362       286  
 
               
Income before taxes
    8,822       2,388  
 
               
Income tax expense
    (1,704 )     (1,475 )
 
           
NET INCOME
    7,118       913  
 
           
 
               
Attributable to:
               
Equity holders of the Company
    7,242       330  
Minority interest
    (124 )     583  
 
               
Net income per share attributable to equity holders of the Company (in euros)
               
Basic
    0.01       0.00  
Diluted
    0.01       0.00  
 
               
Shares used in net income per share calculation:
               
Basic
    607,039,538       606,009,196  
Diluted
    622,407,315       622,552,102  

Due to the adoption of IAS 1 (revised 2003) Presentation of Financial Statements, the Company has modified its Consolidated Balance Sheet and its Consolidated Statement of Income. Please refer to Note 2.23 “Comparatives” of our 2004 Annual Report for further details.

(GEMPLUS LOGO)

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Gemplus International SA


Consolidated Balance Sheets

                 
    (in thousands of euros)  
    March 31,     December 31,  
    2005     2004  
    (unaudited)          
ASSETS
               
Current assets:
               
Cash and cash equivalents
    395,098       388,430  
Trade accounts receivable, net
    141,647       148,512  
Inventory, net
    108,297       115,610  
Derivative financial instruments
    8,701       33,387  
Other current receivables
    65,841       66,160  
Total current assets
    719,584       752,099  
 
               
Non-current assets:
               
Property, plant and equipment, net
    145,393       148,916  
Goodwill, net
    28,837       28,197  
Deferred development costs, net
    19,931       19,222  
Other intangible assets, net
    7,767       8,965  
Deferred tax assets
    6,424       6,264  
Investments in associates
    12,168       12,864  
Available-for-sale financial assets, net
    4,873       4,752  
Other non-current receivables, net
    46,356       43,900  
Total non-current assets
    271,749       273,080  
 
           
TOTAL ASSETS
    991,333       1,025,179  
 
           
 
               
LIABILITIES
               
Current liabilities:
               
Accounts payable
    79,029       94,025  
Salaries, wages and related items
    42,134       55,199  
Current portion of provisions and other liabilities
    52,077       50,217  
Current income tax liabilities
    28,907       25,708  
Current obligations under finance leases
    5,970       6,005  
Total current liabilities
    208,117       231,154  
 
               
Non-current liabilities:
               
Non-current obligations under finance leases
    30,460       33,663  
Non-current portion of provisions
    22,979       25,696  
Other non-current liabilities
    12,649       13,353  
Total non-current liabilities
    66,088       72,712  
 
               
Shareholders’ equity:
               
Ordinary shares
    128,643       128,643  
Additional paid-in capital
    1,031,558       1,031,558  
Employees stock options
    5,019        
Retained earnings
    (456,532 )     (459,560 )
Other comprehensive income
    (570 )     11,956  
Less, cost of treasury shares
    (1,985 )     (1,985 )
 
               
Equity attributable to equity holders of the Company
    706,133       710,612  
 
               
Minority interest
    10,995       10,701  
 
               
Total shareholders’ equity
    717,128       721,313  
 
           
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
    991,333       1,025,179  
 
           

Due to the adoption of IAS 1 (revised 2003) Presentation of Financial Statements, the Company has modified its Consolidated Balance Sheet and its Consolidated Statement of Income. Please refer to Note 2.23 “Comparatives” of our 2004 Annual Report for further details.

(GEMPLUS LOGO)

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Gemplus International SA


Consolidated Statements of Cash Flows

                 
    (in thousands of euros)  
    Three months ended  
    March 31,  
    2005     2004  
    (unaudited)  
Cash flows from operating activities:
               
 
               
Net income
    7,118       913  
Adjustments to reconcile net income to net cash from operating activities:
               
Depreciation, amortization and impairment
    9,326       15,182  
Changes in non-current portion of provisions and other liabilities, excluding restructuring
    (446 )     (571 )
Deferred income taxes
    (339 )     419  
(Gain) / loss on sale and disposal of assets
    132       510  
Share of (profit) loss of associates
    824       2,717  
Other, net
    (937 )     (2,389 )
Changes in operating assets and liabilities:
               
Trade accounts receivable and related current liabilities
    14,084       14,128  
Trade accounts payable and related current assets
    (15,735 )     5,560  
Inventories
    8,946       (10,129 )
Value-added and income taxes
    1,354       8,231  
Salaries, wages and other
    (8,124 )     1,069  
Restricted cash
          (21,952 )
Restructuring reserve payable
    (3,611 )     (13,218 )
 
           
 
               
Net cash (used for) from operating activities
    12,592       470  
 
           
 
               
Cash flows from investing activities:
               
Sale / (Purchase) of activities net of cash disposed / acquired Other investments
          (1,692 )
Purchase of property, plant and equipment
    (4,439 )     (3,963 )
Purchase of other assets
    (197 )     (536 )
Proceeds from sale of property
           
Change in non-trade accounts payable and other
    846       (1,086 )
 
           
 
               
Net cash used for investing activities
    (3,790 )     (7,277 )
 
           
 
               
Cash flows from financing activities:
               
Proceeds from exercise of share options
          1,287  
Proceeds from sales-leaseback operations
          957  
Principal payments on obligations under finance leases
    (1,472 )     (1,458 )
Increase (decrease) in bank overdrafts
    (1,555 )     (98 )
Changes in non-trade accounts payables on financing activities
    779        
 
           
 
               
Net cash (used for) from financing activities
    (2,248 )     688  
 
           
 
               
Effect of exchange rate changes on cash
    114       6  
Net increase (decrease) in cash and cash equivalents
    6,554       (6,119 )
Cash and cash equivalents, beginning of the period
    388,430       390,684  
 
           
 
               
Cash and cash equivalents, end of the period
    395,098       384,571  
 
           

(GEMPLUS LOGO)

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Gemplus International SA


1)   Accounting principles:

The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS).

2)   Segment information

First Quarter 2005 compared with First Quarter 2004

2.1)   Operating Segments
                                         
    (in millions of euros)  
                                    % change  
    March 31,             March 31,             currency  
Net sales   2005             2004     % change     adjusted  
Telecommunications
    144.3                     146.6       -2 %     -2 %
Financial Services
    37.9               40.4       -6 %     -3 %
Identity and Security
    10.9               10.3       6 %     5 %
 
                               
Total
    193.1               197.3       -2 %     -3 %
 
                               
 
    (in millions of euros)  
    March 31,     (% of net     March 31,     (% of net        
Gross profit   2005     sales)     2004     sales)     % change  
Telecommunications
    52.3       36.3 %     49.7       33.9 %     5 %
Financial Services
    5.8       15.3 %     9.1       22.7 %     -36 %
Identity and Security
    3.8       34.6 %     2.4       23.2 %     58 %
 
                             
Total
    61.9       32.1 %     61.2       31.0 %     1 %
 
                             
 
    (in millions of euros)  
    March 31,     (% of net     March 31,     (% of net        
Operating expenses   2005     sales)     2004     sales)     % change  
Telecommunications
    (35.8 )     24.8 %     (37.8 )     25.8 %     -5 %
Financial Services
    (10.4 )     27.4 %     (11.9 )     29.5 %     -13 %
Identity and Security
    (8.2 )     74.7 %     (8.0 )     77.3 %     2 %
 
                             
Total
    (54.4 )     28.2 %     (57.7 )     29.2 %     -6 %
 
                             
 
    (in millions of euros)  
                                    Change in  
    March 31,             March 31,             Operating  
Operating income (loss)   2005           2004           income (loss)  
Telecommunications
    16.5                     11.9                     4.6  
Financial Services
    (4.6 )             (2.8 )             (1.8 )
Identity and Security
    (4.4 )             (5.6 )             1.2  
 
                                 
Total
    7.5               3.5               4.0  
 
                                 

2.2)   Geographical Segments
                                         
    (in millions of euros)  
                                    % change  
    March 31,             March 31,             currency  
Net sales   2005             2004     % change     adjusted  
Europe, Middle East and Africa
    99.3                     96.4       3 %     1 %
Asia
    46.4               53.1       -13 %     -14 %
Americas
    47.4               47.8       -1 %     3 %
 
                               
Total
    193.1               197.3       -2 %     -3 %
 
                               

(GEMPLUS LOGO)

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Gemplus International SA


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

         
  GEMPLUS INTERNATIONAL S.A.   
Date: 25 April, 2005


   
  By:   /s/ Frans SPAARGAREN    
    Name:   Frans SPAARGAREN   
    Title:   Chief Financial Officer   
 

(GEMPLUS LOGO)

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