PARIS (IndoTelko) - Alcatel-Lucent reporting year-on-year revenue increase of 7% at constant exchange rates to Euro 3,668 million, and a gross margin improvement of nearly five percentage points, driven mainly by a stronger contribution from IP Routing, Terrestrial optics and Ultra-Broadband Access solutions.
Commercial performance was strong, with new contracts announced in each main region, Europe, the United States and Asia, notably in Fixed and Mobile Access.
Alcatel-Lucent achieved Euro 84 million of fixed costs savings in the period, bringing year-to-date total fixed costs savings to Euro 259 million, with notably a continuous decrease in SG&A.
Both improvements contributed to a positive adjusted operating income of Euro 116 million in the quarter. Over the first nine months of the year, adjusted operating income improved by more than Euro 360 million compared to last year period.
Free cash flow was Euro (218) million, an improvement of Euro 148 million compared to the third quarter of 2012, with higher adjusted operating income partially offset by a negative change in working capital, reflecting mainly an increase in inventories ahead of large network roll-outs.
Alcatel-Lucent actively managed its balance sheet in the quarter. In addition to continuing to reprofile its debt with the issuance of USD 500 million senior notes, Alcatel-Lucent took actions to decrease the cash held in China subject to exchange control restrictions by approximately USD 200 million.
Looking ahead, Alcatel-Lucent expects its business in the fourth quarter of the year to be driven by a strong seasonal activity, and to exceed the top end of the Euro 250-300 million in fixed costs savings for the full year announced by the Shift Plan.
Michel Combes, CEO of Alcatel-Lucent, said: “We are seeing the first positive signs of our new operating model in our day-to-day business and are encouraged by the substantial progress in the Shift Plan key metrics. Going forward, we remain fully focused on execution to leverage the momentum we are building.”
From a geographic standpoint, North America posted its second consecutive quarter of nearly 20% year-on-year growth, continuing to be the key driver for the Group. While China was stable in terms of revenues, the rest of the Asia Pacific region declined at a low single digit rate.
Encouraging trends continued in Western Europe, growing more than 5%, while Eastern Europe reduced its pace of decline. The recovery in the Middle East and Africa accelerated, witnessing growth in the mid-teens, which was offset by a slowdown in Central and Latin America, resulting in a -9% rate of decline in the Rest of World area.(es)