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I used to have
Rajeev as a provider a few years ago, he was a tough one, I have to say;
then, a competitor in the past two years, and I have always had a lot of
respect. And I hear that he has made tremendous work leading Nokia in the
past few years, and I have no doubt that he will be a tremendous leader for
this new combined company. And so I am happy to give him the, so let's say,
opportunity to lead the show for the next coming years. I will remain a
demanding shareholder. When I joined Alcatel-Lucent two years ago, the Group
had come very close to bankruptcy, threatened by serious financial and
operational weaknesses. The emergency and priority was to put the Group back
in the game and provide it with a true industrial project. This was the
purpose of the Shift Plan, which I presented at that stage, and which was
phased in three major steps. First step was about taking the necessary
actions to avoid bankruptcy, and to fix our balance sheet and restore
operational efficiency. Strong refinancing actions were [concentrated]
throughout 2013 and H1 2014 under the strong leadership of Jean Raby with the
reimbursement of the secured loan, bringing this refinancing chapter to a
close. Equally, strong actions were taken to redefine our business model and
[exit] our cost base with the whole management team, mainly led by my CEO,
Philippe Guillemot. Quarter after quarter, we have consistently delivered
cost savings and operational improvements, ultimately reinforcing underlying
profitability and free cash flow profile, while solidifying the entire
organization. In 2013, we were back to profitability, just after seven months
in the place. In 2014, the Group recorded a positive free cash flow
pre-restructuring, for the first time ever since the merge in between Alcatel
and Lucent. So, I guess that we can say that the first step was really
successful. Second step was about giving the Group a true industrial project
and a vision for the future. At that stage, it appeared very clear to me that
the industry was moving to 5G; that 5G is not just about the radio. 5G is
about, of course, radio, but also backhaul, which requires ultra broadband
fixed access, as well as IP core and cloud for network function utilization.
Hence, I decided to reposition the Group on those different technologies, in
order to be able to lead the industry towards this 5G migration. At the end
of 2014, the transition of our product portfolio was mostly completed. We
have reduced our dependence on legacy technologies and have reallocated our
resources towards IP, cloud, and ultra broadband. More than two-thirds of our
revenue came from these activities in 2014, compared to about half in 2012.
Those activities have grown, on average, by 15% year after year, in between
2012 and 2014. On top of that, we have made encouraging inroads in customer
segments outside our traditional telecommunication operator space, where gross
potential is/was for Alcatel-Lucent, and is for the new Nokia Group. We have
re-ignited innovation with 85% of our R&D effort, redeployed towards
next-generation technologies, the launch of a new engagement model with Bell
Labs, and external partnerships with Qualcomm, Intel, and [Swiss]
(inaudible). Yes, I guess that 2014 was a successful year, proven by the new
wins that we delivered; and also proven by the fact that during this year the
all industry embraced the strategy we decided to move in, and most of our
competitors decided to integrate all those type of technologies in their
portfolio. First step is today, and is ongoing, is about ensuring that we
have the required resources to build a successful and sustainable future. In
this regard, the combination of our groups brings the means to accelerate our
strategy vision, giving the financial strength and critical scale needed to
achieve our transformation; and, as Rajeev said, scale and scope needed to
attract the best talents, to make sure that we have the right partner for the
customers, and to make sure that we become the true worldwide leader to pave
the way for the 5G transformation. 8 THOMSON REUTERS STREETEVENTS |
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15, 2015 / 7:00AM, ALU.PA - Alcatel Lucent SA and Nokia Oyj To Combine To
Create An Innovative Leader In Next-Generation Technology And Services For An
IP Connected World M&A Call
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