Combes Shifts ALU to IP Networks, Promises $1.3B in Asset Sales
Alcatel-Lucent CEO Michael Combes has announced what he's calling "The Shift Plan", a three-year course of action that aims to reposition the company as a specialist provider of IP Networks and Ultra-Broadband Accesss.
As part of the plan, IP Networks and Ultra-Broadband Access will represent 85 percent of R&D investment in the year 2015. The company also has plans to sell assets totaling $1.3 billion, while also reprofiling $2.6 billion in debt between 2013 and 2014. Alcatel-Lucent also said it hopes to reduce debt by $2.6 billion in that timeframe.
In a statement, Combes said the Shift Plan, which is designed to be self-funding, is about aligning realistic and deliverable ambitions with the company's core competencies.
"Over the next three years we are targeting Euro 1 billion of fixed costs savings, and carefully defined and timed asset sales expected to generate at least an additional Euro 1 billion,” Combes said.
Other stated objectives under the plan are to grow revenues in Core Networking by more than 15 percent, from $8.1 billion in 2012 to over Euro $9 billion in 2015, while lifting its operating margins in this segment from 2.4 percent in 2012 to more than 12.5 percent in 2015.
Combes also announced far-reaching changes in management across the company.
Alcatel-Lucent’s board of directors approved the appointment of Combes as the company’s new CEO back in February. Combes, a former CEO of Vodafone Europe, has also held positions as Chairman and CEO of TDF as well as CFO and senior executive vice president of France Telecom.
Combes succeeds long-time CEO Ben Verwaayen, who announced his resignation amid a $1.8 billion loss for 2012.