Giesecke & Devrient Boosts Profitability and Invests in Innovation

Giesecke & Devrient Boosts Profitability and Invests in Innovation

Sales grow five percent to almost EUR 1.3 billion in the 2006 financial year
Income rises 15.5 percent
Return on sales reaches 7.2 percent
R&D expenditure increases 12 percent

Munich, May 22, 2007–Giesecke & Devrient (G&D) has significantly boosted profitability with a new corporate strategy and has developed outstanding growth prospects following its successful reorganization. In fiscal 2006, the Munich-based technology group with nearly 8,300 worldwide employees generated close to EUR 1.3 billion in revenues. This represents a five percent increase over the prior year. Earnings (EBIT) rose 15.5 percent to EUR 93 million, while the return on sales reached 7.2 percent. Net income for the year amounted to EUR 81 million. The group also honed its innovative edge during the year by stepping up research and development investment by almost 12 percent to EUR 76 million.

“Our excellent performance shows that we remained on the right track in 2006 with our sustainable growth strategy. We succeeded in growing profitably and organically and in developing more room to maneuver as an independent, family-owned company,” explained Dr. Karsten Ottenberg, Chairman of the Management Board and CEO of Giesecke & Devrient at the company’s annual report press conference in Munich. “Not only did we improve our efficiency, but we also became more innovative, allowing us to leverage our strengths in world markets and capitalize on new business opportunities.”

Giesecke & Devrient also got off to a successful start in the current financial year. “We expect to see sales grow up to ten percent and income to rise even more in 2007,” said the CEO of Giesecke & Devrient, adding that the company planned to invest even more in innovation. “We will increase research and development expenses another 30 percent this year to almost EUR 100 million,” announced Ottenberg in Munich.

Fast-growing Banknote business unit

Giesecke & Devrient is now organized in four different units: the Banknote, Cards and Services, and Government Solutions business units and the New Business division. The Banknote business unit contributed significantly to the good performance in fiscal 2006. Sales were up 13 percent to EUR 696 million. This business unit accounted for 54 percent of consolidated sales. Cards and Services, the next largest business unit, withstood the relentless pressure on margins to ratchet up sales by 3.8 percent to EUR 484 million. Government Solutions, the third business unit specializing in security documents, passports and ID cards, generated EUR 113 million in sales in 2006. The New Business division, which systematically develops new business endeavors, carried out several promising projects in its first year of existence. In 2006, for example, it and Nokia established Venyon, a multinational company in which G&D holds a 57 percent stake.

Successful international operations

Foreign customers accounted for 83 percent of sales in the 2006 financial year, especially in Asia, where growth was strongest. In particular, Giesecke & Devrient leveraged opportunities that arose as a result of China’s and India’s dynamic economic growth.

The family-owned company had close to 8,300 worldwide employees at the close of 2006. Around 3,360 were based in Germany. During the 2007 financial year, the company plans to add 100 new jobs in Munich in operations and research and development.

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 2006, the Group employed close to 8,300 people and generated revenue of almost EUR 1.3 billion.
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Giesecke & Devrient GmbH
Vera Schuh, Press Manager
Prinzregentenstrasse 159, D-81607 Munich
Phone: +49 89 41 19-2985, Fax: -2020