Fiscal 2004: Group achieves its highest revenue ever–earnings improve by 40 per cent–net profit 36 per cent higher–profitable growth expected for 2005

Munich, May 13, 2005–Fiscal 2004 was another successful year for Giesecke & Devrient (G&D). The Munich-based international technology group increased its sales by 10.5 per cent, to €1.16 billion. This was the highest revenue ever achieved by the G&D Group. Earnings rose by 40 per cent, reaching €69.7 million. Net profit was €38.4 million, equivalent to an increase of 36 per cent over the previous year’s €28.2 million. G&D generated around 85 per cent of its sales abroad. The organization expects profitable growth in the current year.

“These excellent results are the visible expression of the success achieved in our strategic growth markets and of the organization’s improved earning performance. They result from on-going implementation of our internationalization strategy over the last few years, and the efficiency programs carried out throughout the Group. Today, G&D generates around 85 per cent of its overall sales outside Germany”, commented Dr. Karsten Ottenberg, the new Chairman of the Management Board and CEO of Giesecke & Devrient, presenting the figures for fiscal 2004. Ottenberg has headed the organization since April 2005.

Card segment registers gratifying sales increase
The increase in sales in 2004 was sustained chiefly by the Card segment. While sales in the Banknote and Paper / Currency Processing and Services segment, at €588 million, remained stable at the previous year’s level, the Card segment achieved a gain of 24 per cent, to €568 million. “For our cards business, this is a clear reversal of the previous trend”, explained Dr. Peter Zattler, the organization’s CFO.

Solutions competence strengthened

Included in the balance-sheet for the first time was secunet AG, which showed a strong improvement in both revenue and earnings in fiscal 2004 and thus achieved its most successful year so far. G&D took a majority stake in secunet AG in the 2nd quarter of 2004, following which the company was merged into the G&D subsidiary Secartis AG. “The acquisition of secunet has enabled G&D to further strengthen its position as a global technology group, and to establish an excellent basis for expansion of its market potential. Secunet rounds off our competence as solutions provider in the field of smart card technology and network security”, Ottenberg stressed.

It was also due to its competence as solutions provider that G&D was awarded the contract for the Austrian e-card project in 2004. The e-card project encompasses supply of a total of 11 million chip-based social insurance cards for all of Austria’s citizens, plus operation of an electronic card system. “With the introduction of the e-card, Austria is spearheading the use of smart card technology for health service modernization world-wide”, Ottenberg continued.

Cost efficiency and innovation–keys to profitable growth

Despite poor economic forecasts and increasingly difficult competitive conditions, such as excess capacities in banknote printing or the continuing price decline in the card sector, G&D is optimistic about prospects for the coming months. “We are expecting profitable growth for 2005. To achieve this goal, we will need to continuously re-appraise our business processes and re-engineer them for greater efficiency and flexibility. In the face of increasingly fierce competition, cost savings alone are not enough to ensure future-proof performance. The key to profitable growth is innovation”, Ottenberg observed. Only continuous innovation will permit the organization to keep pace with rapid technological change and secure and expand its existing market position, he pointed out.

The vision: “Global market leader in safeguarding values”

On this basis, the company’s objective is to make more intensive use of its core competences and so open up new business opportunities. It is also essential to exploit internal synergies, for instance in the field of research and development, more systematically. At the same time, G&D will be aiming to further increase its customer orientation. “Global market leadership in safeguarding values can only be achieved jointly with our customers. If we collaborate with our customers at an early stage on defining how values can be shaped and safeguarded in future, and what benefit they bring to individuals, institutions and society, G&D can also deliver substantial added value for its own value creation process”, Ottenberg commented.

About Giesecke & Devrient:

Giesecke & Devrient (G&D), based in Munich, Germany, is an international technology group operating subsidiaries and joint ventures throughout the world. Founded in Leipzig in 1852, G&D began as a printer of securities, and later specialized in banknote production. The company has been developing solutions and complete systems for automatic currency processing since 1970. Today, G&D is also a technology leader in smart cards, and a solutions provider in a wide range of fields, including telecommunications, electronic payments, identification, health, transportation, and IT security (PKI). In fiscal 2004, the Group employed some 7,300 people and generated a revenue of €1.16 billion. For more information, visit our Web site at http://www.gi-de.com.