Alcatel-Lucent posts £1.3bn loss for 2012 as CEO steps down

Major write downs in Q4 push manufacturer into the red; CEO Ben Verwaayen announces he will leave the company

Alcatel-Lucent posts £1.3bn loss for 2012 as CEO steps down

Alcatel-Lucent CEO Ben Verwaayen today (7 February 2013) announced he was stepping down from the company. His decision came on the same day as the company’s Q4 2012 and full year 2012 results, which showed a heavy loss following write downs. Verwaayen has been with the company since September 2008.

The company posted a net loss of £1.3bn in 2012, compared with a net profit of £933m in 2011 on revenues of £12.3bn – fall of 5.7% on 2011. Q4 2012 results showed a net loss of £1.1bn compared with a profit of £740m in Q4 2011 and a loss of £124.5m in Q3 2012. 

The losses stemmed largely from a £1.1bn write down ‘related to the depreciation of goodwill and fixed assets and the corresponding impact on deferred tax’.

The company has struggled to make a profit since the merger of Alcatel and Lucent in 2006. However, it said it had made cost savings of close to £554.5m, ahead of plan, and in the fourth quarter of 2012 it had a free cash-flow of £302m with an adjusted operating margin of 2.9%

Verwaayen commented: ‘Our fourth quarter reflects the early progress of The Performance Program announced last July. We announced clear choices on where we would operate, how we would operate and where we would differentiate.

‘We have seen progress on all these choices, and close 2012 ahead on our cost reduction plans. We have addressed half of the previously margin-diluting Managed Services contracts, and show continued and strong growth in IP and Next Generation Wireless. We can see a clear statement of customer confidence through growth in both our order book and backlog.’

Alcatel-Lucent has completed a Euro 2bn financing to stabilise its balance sheet and allow it to complete The Performance Program. 

North America remains the company’s most important region. Sales rose 13.7% year-on-year in Q4 2012, but were down 1.5% at £4.9bn for the full year. Sales in Europe fell by 16.4% to £3.2bn and were down 13% for the quarter compared with Q4 2011. The Asia-Pacific region saw sales fall 5% to £2.1bn, while sale for the quarter were down 7.9%.

Network infrastructure remains Alcatel-Lucent’s most important division. Sales were down 8.6% to £7.5bn and the division showed an operating loss in 2012 of £385m.

The Software, Services & Solutions division saw revenues rise by 2.3% for the full year to £3.8bn and posted an operating income of £253m. The Enterprise division saw revenues fall by 7.1% to £652m for the full year and posted an operating income of £6.8m.

Written by Wireless magazine
Wireless magazine

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