In 2008, the Giesecke & Devrient (G&D) technology group reported exceptionally good results for the second year in succession.
The company's worldwide operations, with a workforce of close to 10,000 employees, generated net sales of 1.7 billion euros. This represents an increase of 9 percent compared with the previous year. All business units of the Group presented high growth rates. Net income for the year increased by 16 percent to 111 million euros. EBIT amounted to 160 million euros. At the same time, G&D made further substantial forward-looking investments, increasing its R&D expenditure to 109 million euros.
"We have already made good progress with our strategy to increase sales and earnings, as the past two years' results have demonstrated," pointed out Dr. Karsten Ottenberg, Chairman of the Management Board and CEO of Giesecke & Devrient, speaking at the Group's annual report press conference in Munich. "In 2008, we have continued along the profitable road to growth as in previous years. And we have laid firm foundations for G&D's future development by investing 109 million euros in research and development activities. We are well positioned in the market. To strengthen our innovative power even further, we plan to augment our expenditure on property, plant and equipment once again in 2009, to 150 million euros. We are the technological leader in numerous sectors. The acquisition of the Swedish software company SmartTrust has enabled us to reinforce our position in the mobile communications market in this respect," added. Ottenberg.
All three of Giesecke & Devrient's business units - Banknote, Cards and Services, Government Solutions - have improved on the results they achieved in 2007. With sales of 909 million euros - up 9.1 percent on the previous year - the Banknote business once again delivered the highest contribution to Group revenues. The Paper and Printing divisions both benefited from the growing customer demand for complex security features. The Louisenthal plant, Papierfabrik Louisenthal GmbH, operated to the limits of its production capacity throughout the year 2008. Sales by the Banknote Processing division rose to a record level in 2008. The division reinforced its position as a market leader especially in the category of medium- and high-capacity banknote processing systems, employed for example by security transport companies and central banks.
Sales by the Cards and Services business unit increased year-on-year by 5.6 percent to 609 million euros. The Payment division once again gained additional market shares, profiting especially from the ongoing migration from simple magnetic strip cards to more sophisticated cards with embedded microprocessors. G&D was able to significantly expand its position in this market sector, particularly in Canada, France and Spain. As in 2007, the Telecommunications division considerably increased the volume of sales of SIM cards. The demand for value-added cards for mobile communication applications greatly exceeded our original expectations. The global trend towards lower prices was balanced by a higher volume of sales and greater demand for premium products offering higher memory capacity.
Positive developments were also reported by the Government Solutions business unit, whose principal activities involve supplying security documents, passports and ID cards to government authorities. In 2008, this business unit increased its sales by 17.6 percent to nearly 159 million euros. Important deals concluded in 2008 included the company's largest-ever order for electronic passports, resulting from an agreement to supply the government of Botswana with seven million of these travel documents.
The New Business division also produced satisfactory results. Created in early 2006 with the mandate of systematically identifying and developing new areas of business, the division doubled its sales in 2008 to roughly twelve million euros, compared with the six million euros generated in 2007.
In 2008, with a customer base spread across 164 countries in addition to its domestic market, Giesecke & Devrient continued to successfully implement its international business strategy, generating 85 percent of its total net sales with customers outside Germany. Giesecke & Devrient increased its global workforce in 2008, creating 930 new jobs at its sites around the world. At year-end 2008, the Group employed a total workforce of almost 10,000.