Austin, TX, January 18, 2005–Subsequent to the decision by the U.S. Government Printing Office (GPO) to issue additional awards to the four next highest-rated bidders from its initial evaluation process for a contract to provide technology for the U.S. electronic passport, Olivier Piou, CEO of Axalto, made the following comments:

“Axalto supports the Government Printing Office’s decision as it represents the best way to ensure that U.S. citizens will benefit without delay from the increase in security that the electronic passport will provide. Since our contract award in early October 2004, we have fully complied with all GPO delivery and testing requirements.

“We are confident in the excellence of our products and our continued ability to best satisfy the GPO’s stringent demands.”

About Axalto

Axalto (Euronext: NL0000400653 AXL) is the world’s leading provider of microprocessor cards (Gartner Dataquest 2004)–the key to digital networks–and a major supplier of point-of-sale terminals. Its 4500 employees come from 70 nationalities and serve customers in more than 100 countries, with worldwide sales reaching 3 billion smart cards to date. The company has 25 years’ experience in smart card innovation and leads its industry in security technology and open systems.

Axalto continuously creates new generations of products for use in a variety of applications in the telecommunications, finance, retail, transport, entertainment, healthcare, personal identification, information technology and public sector markets. Microprocessor cards provide convenience, security and privacy to public and private services operators, their customers and end users.

Backgrounder

The United States of America Government Printing Office (GPO) has awarded the company a contract to provide technology for the electronic passport. The GPO will use this technology to manufacture the U.S. passport booklet provided to U.S. citizens.

Axalto will deliver immediately initial quantities of passport electronic covers, inlays, related readers and software for test and qualification in the GPO passport manufacturing environment. The GPO expects to ramp up production to quantities above 1 million electronic passports in 2005. By 2006, all new passports are expected to have the electronic capability incorporated. The GPO currently produces more than 7 million passports each year.

The electronic passport technology from Axalto includes the company’s highly secure operating software with biometric capabilities running in a large capacity contactless microprocessor chip that is embedded in a module that is highly resistant to damage. These inlays are integrated in the passport booklet cover. The Axalto electronic passport technology was developed based on the company’s proven smart card security technology and designed to provide superior durability and performance over the passport’s 10-year life span.