Transcript GEMPLUS - HEC Paris

Group 4




Jing Yuan
Jerome Banuls
Jean Saghaard
Charles Thach
Agenda

Company presentation

The international presence

French operations

Conclusion
May 17, 2004
Gemplus - Best in France Project (Confidential)
2
Company Presentation
GEMPLUS
3
Profile


World leader in smart card manufacturing

Created in 1988 in France

Success, crisis (2000 – 2002), resilience
Three markets


Telecom, Financial services, Identity
International – Regional culture & identity

>90% turnover outside France

More employees abroad
May 17, 2004
Gemplus - Best in France Project (Confidential)
4
Financial Figures
Revenues
Revenue (Euros)
1 400,00

1 200,00
Down trend
1 000,00
800,00
600,00
400,00
200,00
2000
2001
2002
2003
Operating Results (Euros)
150
Operating Results
100

Started to recover
50
0
-50
-100
-150
2000
May 17, 2004
2001
2002
2003
Gemplus - Best in France Project (Confidential)
5
Financial Figures
Net Results
Historic
150
100

50
0

-50
Decreasing demand
Price pressure
-100
-150
Measures
-200
-250

-300
-350
2000
2001
2002
2003


May 17, 2004
Gemplus - Best in France Project (Confidential)
Divestitures
Restructuring
Cost reduction
6
Market Performance
May 17, 2004
Gemplus - Best in France Project (Confidential)
7
People per Region
Total Employees: 5.037
14%
54%
32%
Europe, Middle East & Africa
May 17, 2004
Asia
Gemplus - Best in France Project (Confidential)
Americas
8
Organisation

Manufacturing & Sales




Three Regions : USA, Europe, Asia
Production autonomy
Close to customers
R&D


May 17, 2004
Main activity located in France (500 people)
100 people in Singapore, 10 in Beijing
Gemplus - Best in France Project (Confidential)
9
Worldwide Activities Split
13%
27%
60%
R&D
May 17, 2004
Manufacturing
SG&A
Gemplus - Best in France Project (Confidential)
10
The International Presence
Gemplus out of France
11
Gemplus Presence: Europe
May 17, 2004
Gemplus - Best in France Project (Confidential)
12
Gemplus Presence: North America
May 17, 2004
Gemplus - Best in France Project (Confidential)
13
Gemplus Presence: Asia
May 17, 2004
Gemplus - Best in France Project (Confidential)
14
Internationalism

Started very rapidly




1989 sales office in the USA and Singapore
First manufacturing plant outside France (Germany) in 1992
1994 : 14% of employees outside France (2004 > 70%)
Drivers

Customers : local markets



Manufacturing cost



May 17, 2004
GSM : specific requests, local personalisation centers
Banking / ID : national security policy
PubTel : low cost, delocalisation
Mexico, China, Poland
Allocating demand/products to run full capacity & reduce cost
Gemplus - Best in France Project (Confidential)
15
Example : Poland


Large manufacturing center
Drivers :





May 17, 2004
Local demand
Quality/cost ratio of labor
Cost
Logistics (serving Eastern Europe)
Safety
Gemplus - Best in France Project (Confidential)
16
French Operations
17
Activities in France
500 people
30%
505 people;
30%
675 people;
40%
R&D
May 17, 2004
Manufacturing
Gemplus - Best in France Project (Confidential)
SG&A
18
Operating in France

French Management





Historical
On purpose
Local culture : French & Provence
Blend of American management norms
Importance of the R&D team
May 17, 2004
Gemplus - Best in France Project (Confidential)
19
Having the R&D in France




High level of skills
French creativity
Proximity with chip suppliers
« Bien-être »
80% of R&D resources in France.
The core of the knowledge
May 17, 2004
Gemplus - Best in France Project (Confidential)
20
Pros and Cons for France
Positive




Negative
Technical skills
Geographical position
Infrastructures
Stability
May 17, 2004
Lack of entrepreneurship spirit
 Complexity of the legal system
 Too many constraints, lack of
flexibility
 Lack of proficiency in foreign
language

Gemplus - Best in France Project (Confidential)
21
Advice when Coming in France


Integrate the French culture rapidly
Have managers familiar with the
country and its functioning
May 17, 2004
Gemplus - Best in France Project (Confidential)
22
Conclusion
23
French Attractivity

Not highly attractive for industrial
operations

High intellectual skills

More open internationally
May 17, 2004
Gemplus - Best in France Project (Confidential)
24
Acknowledgement


Mr. Luc Gillet – European HR Director
Ms. Muriel Charriere – HR Manufacturing (France)
May 17, 2004
Gemplus - Best in France Project (Confidential)
25