French telecom-equipment maker Alcatel-Lucent (ALU) unveiled 'The Shift Plan', a detailed three-year plan to reposition the company as a specialist provider of IP Networking and Ultra-Broadband Access. According to the Paris-based firm, the shift plan would mobilize the full range of the company's assets and resources to achieve a decisive shift in the Group's industrial focus that would concentrate the company on the priorities of its telecom customers as they deploy next-generation networks to address the explosive growth in bandwidth-hungry data traffic. This focus on the business units of IP Networking, cloud technologies and Ultra-Broadband Access would be delivered by a management team organized around full profit-and-loss and cash accountability.
Most importantly, the Shift Plan requires a clearly differentiated approach to the management of high-growth businesses - Core Networking - as opposed to those that would be managed with cash generation as the clear priority. The 'managed for cash' businesses would consist of key wireless, fixed access and other businesses, which would help in playing a vital role in the medium and long-term development. Also, the Shift Plan would capitalize on Alcatel-Lucent's recognized innovation assets, particularly its research laboratories, Bell Labs.
The Shift Plan targets 1 billion euros in fixed cost savings and asset sales of more than 1 billion euros over 2013 - 2015. Also, The plan aims 2 billion euros in reprofiling the Group's debt over 2013-2015 and future debt reduction of 2 billion euros. As part of the Shift Plan, Alcatel-Lucent is targeting to increase its Core Networking revenues by over 15%, from 6.1 billion euros in 2012 to over 7 billion euros in 2015, while lifting its operating margins in this segment from 2.4% in 2012 to more than 12.5% in 2015.
Michel Combes, who was named chief executive on April 2, 2013, announced that effective July 1, Philippe Guillemot would join the company's leadership team as Senior Executive Vice President, Operations.
In addition, Alcatel-Lucent said its management structure would be reorganized into four main business lines such as IP Routing & Transport, IP Platforms, Wireless and Fixed Networks, which is to be supported by group-wide functions focused on Operations, Sales and Strategy & Innovation, pending the appropriate information and consultation processes in various countries.
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