Thales Details High Expectations for Gemalto-infused Business Unit in Investor Note

Biometrics News

Biometrics News: Thales Details High Expectations for Gemalto-infused Business Unit in Investor note

With its acquisition of Gemalto earlier this year, Thales has established a new “Digital Identity and Security” (DIS) business unit, and has laid out some lofty expectations for the division in a note to investors.

According to Thales, the DIS unit comprises Gemalto as well as “a number of digital businesses previously assigned to the ‘Defence & Security’ operating segment.” This group has been organized into a new, specialized business unit designed to leverage synergies between the various actors, and Thales says that in the span of just the six months since Gemalto’s integration into Thales, “several hundred specific customer opportunities have been identified”.

This is expected to lead to significant revenues, with Thales anticipating average organic sales growth in the range of four to six percent between 2020 and 2023. The DIS unit’s EBIT margin, meanwhile, is expected to be somewhere in the range of 12.5 to 13.5 percent by 2023.

“Our new ‘DIS’ global business unit is already the world leader in the fast-growing digital identity and security markets, addressing key challenges in the digital transformation of our customers’ intelligent systems,” asserted Thales Chairman and CEO Patrice Caine in the company’s note. Caine also gestured to Thales’ strong position more broadly, noting that the company is accelerating R&D investments, and asserting that its “results for both 2018 and the first half of 2019 were ahead of the dynamics needed to deliver on our 2021 targets.”

Thales first made its acquisition offer to Gemalto in March of last year, and went on to overcome numerous regulatory hurdles stemming from the enormous projected size of the merger as a global provider of digital security technologies. Having attained the needed clearances from government regulators around the world, Thales completed the acquisition earlier this year, with management already predicting a significant EBIT increase in a fiscal update in June.

Now, Thales’ new DIS unit will leverage its unique organizational expertise to focus on the key areas of digital identity and biometrics; secure IoT connectivity; and data encryption and protection. Delving into some more detailed business opportunities within these areas, Thales said in its note that DIS will target application areas including “the pooling of cybersecurity capabilities, the design of security solutions for airports, large cities and critical sites, UAV management and surveillance, and the implementation of the Internet of Things in the military domain and in rail signalling,” among others.

October 9, 2019 – by Alex Perala