Company strengthens operating model, unveiling new Business Group, global
sales organization and leadership team to deliver corporate
Paris, September 10, 2012 – Alcatel-Lucent (Euronext Paris and NYSE:
ALU) today unveiled a new operating model focused on core products, a
strengthened sales organization and re-shaped corporate functions to deliver
the Company’s Performance Program; the strategic initiative announced on July
26 to generate Euro 1.25 billion of cost savings by the end of 2013.
Ben Verwaayen, Chief Executive Officer, said: “In today's markets it makes
sense to play to your strengths. Alcatel-Lucent’s leadership in core
networking, reflects our innovation excellence and long-standing customer
relationships. The objective of the new operating structure is to
strengthen Alcatel-Lucent’s presence in key telecommunications products and
services through a unified business group. A streamlined Executive
Committee will oversee the simplified business model, with a newly-appointed
Chief Operating Officer focused on executing operational improvements.
This announcement simplifies our operating model and puts our Performance
Program at the forefront of our 2013 objectives."
Benefits of the program and new operating structure will enable
- Focus on profitable markets and customers around the world
- Optimize tendering and sales in a single global sales organization
- Accelerate pace of transformation
- Maintain strong innovation engine with continued R&D investment
- Manage patent portfolio as a dedicated profit center
- Concentrate on higher value-added contracts in Managed Services
- Simplify management layers across the company
To achieve these outcomes, the following changes will come into effect from
January 1, 2013:
- Paul Tufano becomes Chief Operating Officer, with worldwide responsibility
for Supply Chain, Procurement and three individual focused businesses
(Enterprise, Strategic Industries and Submarine), in addition to his current
role as Chief Financial Officer.
- Robert Vrij becomes President Global Sales & Marketing, leading a
single global sales organization to oversee and manage all customer-facing
- Stephen A. Carter becomes President Managed Services & EVP Corporate
Restructuring; overseeing the Performance Program and Corporate Marketing &
- Philippe Keryer becomes President of Networks & Platforms. This
worldwide business group will replace the existing regional operating structure
with four global product & services business units, each with full P&L
i. Core Networks, leveraging
global leadership in IP and Optics; IP and Optics will be placed under the
management of Basil Alwan leveraging Alcatel-Lucent’s leadership position in
both of these fast growing markets.
ii. Fixed Networks, investing
further in the Company’s leadership position in this market and the synergies
with Small Cell deployment.
iii. Wireless, focusing on
serving our existing customer base in North America, China and EMEA.
iv. Platforms, evolving the
Company’s High Leverage Network capabilities into unified software platforms
for control, optimization and network analytics.
- George Nazi remains President of the previously created Global Customer
- Jeong Kim remains President of Bell Labs and Chief Strategy Officer and
will be responsible for the Company’s patents assets/portfolio.
In addition to the above, due to the Company’s unique position in the
Chinese market through the Alcatel-Lucent Shanghai Bell (ASB) joint venture,
Rajeev Singh-Molares, working with the chairman of ASB, will take on a
dedicated role focusing on the transformation and development of our commercial
operations in China.
All back-office and business support functions will be part of a new central
administrative system for greater efficiency.
Commenting on the new operating model, Ben Verwaayen added: “The Performance
Program announced on July 26 is the spearhead of these changes. We are putting
in place a simple, robust delivery mechanism for the company to ensure that
Alcatel-Lucent meets its target of a total cost saving of Euro 1.25 billion by
the end of next year.”
We will engage with our employee representatives wherever required by law,
through discussions or consultations, before we finalize and then implement
this new operating model. Subject to the completion of this process, our new
organization will become effective on January 1, 2013.
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS
Except for historical information, all other information in this
presentation consists of forward-looking statements within the meaning of the
US Private Securities Litigation Reform Act of 1995, as amended. These forward
looking statements include statements regarding the future financial and
operating results of Alcatel-Lucent such as, for example, “generate Euro 1.25
billion of cost savings by the end of 2013”. Words or expressions such as
“makes sense,” “reflects,” “objective,” “strengthen,” “streamlined,” “will,”
“simplifies,” “puts our performance program at the forefront of our 2013
objectives,”, “Benefits,”, “Plan,” “optimize,” “accelerate,” “maintain,”
“manage,” “concentrate,” “simplify,” “achieve,” “come into effect,” “investing
further,” “focusing on,” “evolving,” “unique position,” “greater efficiency,”
“changes,” “ensure that,” “engage,” “finalize,” “implement,” “variations of
such words and similar expressions are intended to identify such
forward-looking statements which are not statements of historical facts. These
forward-looking statements are not guarantees of future performance and involve
certain risks, uncertainties and assumptions that are difficult to assess.
Therefore, actual outcomes and results may differ materially from what is
expressed or forecasted in such forward-looking statements, in particular with
regard to product demand for the remainder of the year being as expected, our
ability to achieve all the goals of our Performance Program by the end of 2013,
our ability to exit unprofitable contracts and market at a reasonable cost,
cost containment measures generating expected savings, and the economic climate
in the world in general, and in Europe in particular with the euro crisis.
These risks and uncertainties are also based upon a number of factors
including, among others: our ability to realize the full value of our existing
and future patent portfolio in a complex technological environment (including
our ability to defend ourselves in infringement suits), our ability to operate
effectively in a highly competitive industry and to correctly identify and
invest in the technologies that become commercially accepted, demand for our
legacy products and the technologies we pioneer, the timing and volume of
network roll-outs and/or product introductions, difficulties and/or delays in
our ability to execute on our strategic plans, our ability to efficiently
co-source or outsource certain business processes and more generally control
our costs and expenses, the risks inherent in long-term sales agreements,
exposure to the credit risk of customers or foreign exchange fluctuations,
reliance on a limited number of suppliers for the components we need or a tight
market for commodity components, the social, political and economic risks we
may encounter in any region of our global operations, the costs and risks
associated with pension and postretirement benefit obligations and our ability
to avoid unexpected contributions to such plans, changes to existing
regulations or technical standards, existing and future litigation, compliance
with environmental, health and safety laws, the global economic situation and
of those geographical areas where we are most active, and the impact of each of
these factors on our results of operations and cash. For a more complete list
and description of such risks and uncertainties, refer to Alcatel-Lucent's
Annual Report on Form 20-F for the year ended December 31, 2011, as well as
other filings by Alcatel-Lucent with the US Securities and Exchange Commission.
Except as required under the US federal securities laws and the rules and
regulations of the US Securities and Exchange Commission, Alcatel-Lucent
disclaims any intention or obligation to update any forward-looking statements
after the distribution of this presentation, whether as a result of new
information, future events, developments, changes in assumptions or