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Alcatel-Lucent : Alcatel-Lucent announces Q1 2013 Results



          Alcatel-Lucent : Alcatel-Lucent announces Q1 2013 Results

               Continued progress with The Performance Program

  

 ·       Revenues of Euro 3,226 million, up 0.6% year-over-year

·       Adjusted^2 gross profit of Euro 947 million or 29.4% of revenues

·       Adjusted^2 operating loss^1 of Euro (179) million or -5.5% of revenues

·       Published net loss of Euro (353) million or Euro (0.16) per share

·       Operating cash-flow^3 of Euro (144) million

·       Net (debt)/cash of Euro (358) million as of March 31, 2013

Key numbers for the first quarter 2013

 

Paris, April 26, 2013 - Alcatel-Lucent (Euronext Paris and NYSE: ALU) today
announced first quarter 2013 results.

 

Michel Combes, CEO Alcatel-Lucent, commented: "Alcatel-Lucent's first quarter
results reflect both encouraging trends in the marketplace and good progress
with The Performance Program, for which discipline on execution remains the
priority in 2013.

Free cash-flow remains a challenge. Strong focus will be placed on working
capital management to reverse some of the negative impact incurred this
quarter.

We are actively reviewing the Group's businesses and operating model to design
the conditions for value creation in the future. I am looking forward to
sharing the outcome in early Summer."

                   ----------------------------------------

 

MAIN POINTS

First quarter revenue increased 0.6% year-over-year and decreased -21.2%
sequentially to
Euro 3,226 million. At constant currency exchange rates and perimeter,
revenues increased 1.8% year-over-year and decreased -19.9% sequentially.
Networks & Platforms grew 6% year-over-year with high single digit growth in
IP and good traction in Wireless, Fixed networks, Platforms and Services, all
partially offset by a double-digit decline in Optics. Focused Businesses
declined at a double-digit rate compared to the year ago quarter, with
Enterprise at a mid-single digit rate and Submarine at a faster pace. Finally,
the slowdown in Managed Services continued, reflecting our restructuring
efforts. From a geographic standpoint, also adjusted for constant currency and
compared to the year ago period, North America reached historical highs as a
percentage of total revenues (48%), resulting from strong growth in the
region. While Japan showed good traction and China stabilized, the Asia
Pacific region declined at a low single digit rate. Cautious spending
persisted in Europe, which declined at a 10% rate. Rest of world declined at
10%, where growth in Brazil was offset by weakness in the rest of Central and
Latin America and Middle East and Africa.

 

Adjusted^2 operating^1 loss of Euro (179) million or -5.5% of revenue. Gross
margin came in at 29.4% of revenue for the quarter, compared to 30.2% in the
year ago quarter and 30.4% in the fourth quarter 2012. The year-over-year
decline in gross margin mainly results from unfavorable product mix. The
sequential decrease in gross margin mainly results from lower volumes.
Operating expenses decreased -5.5% year-over-year on a reported basis and
adjusted for constant currency decreased -5.0% year-over-year, reflecting
results of our actions to streamline our cost structure, strongly focusing on
SG&A expenses (decreasing -11.7% year-over-year on a reported basis and
adjusted for constant currency decreased -11.3%). On a sequential basis,
operating expenses declined at -0.3% as reported and increased 0.5% at
constant currency, as decline in SG&A, reflecting results of our actions to
streamline our cost structure (-1.5% quarter-over-quarter when adjusted for
constant currency) was partially offset by an increase in R&D (+2.3%
quarter-over-quarter at constant currency).

 

First quarter reported net loss (group share) of Euro (353) million or Euro
(0.16) per share. This includes restructuring charges of Euro (122) million
and Euro (152) million of financial loss.

The reported net loss (group share) also includes Purchase Price Adjustments
(PPA entries in relation to the Lucent business combination) of Euro (23)
million pre-tax or Euro (14) million after tax.

 

Net (debt)/cash of Euro  (358)  million, versus Euro 147  million of net cash
as of December 31, 2012. The sequential decrease in net cash of Euro (505)
million primarily reflects a negative operating cash-flow of
Euro (144) million, interest paid of Euro (101) million, taxes paid of Euro
(28) million, restructuring cash outlays of Euro (100) million, contribution
to pensions and OPEB of Euro (43) million and capital expenditures of Euro
(117) million. The negative operating cash-flow of Euro  (144) million results
from an adjusted operating loss of Euro (179) million and from a negative
contribution from the working capital requirements of Euro (146) million. The
change in operating working capital requirement has been negative in the first
quarter 2013 by Euro (72) million mainly driven by a negative impact from
progress payment attributed to business trends and timing. The level of
receivables sold without recourse decreased by Euro (148) million to Euro 963
million as of
March 31, 2013.

During the quarter, we received the senior secured credit facilities proceeds,
increasing the level of cash, cash equivalents and marketable securities to
Euro 6.25 billion as of March 31, 2013.

 

Funded status of Pensions and OPEB of Euro (422) million at end of March,
compared to
Euro  (1,308) million as of December 31, 2012. Excluding currency impact, this
deficit narrowing mainly results from a decrease of our benefit obligations of
Euro 786 million due to the increase of around 25 bps in the discount rates
used for pensions and post-retirement healthcare plans, from an actual return
of the plan assets for Euro 263 million, and from a one-time credit of Euro 55
million related to plan amendments. These effects were partially offset by
Euro (235) million of interest cost. The net effect of currency change was
negligible on the funded status this quarter.

As of January 1, 2013, the revised standard IAS 19 'Employee Benefits' now
defines the financial component of pension and post-retirement benefits as
"net interest on the net defined liability (asset)". It is measured as the sum
of interest income on plan assets, interest cost on the defined benefit
obligations and interest income (cost) on the effect of the asset ceiling;
each of these interest amounts being computed using the same common discount
rate. Such financial component is recognized in the consolidated income
statements as other financial income (loss).

Alcatel-Lucent reminds that according to the regulatory perspective - which
determines the funding requirements- and to preliminary assessment of the
company' US plans, no extra funding contribution will be required through at
least 2016.

 

 

Reported RESULTS

 

In the first quarter, the reported net loss (group share) was Euro (353)
million or Euro (0.16) per diluted share (USD (0.20) per ADS) including the
negative after tax impact from Purchase Price Allocation entries of
Euro (14) million.

 

 

Reported Profit & Loss              First   First  % change  Fourth  % change
Statement                          quarter quarter   y-o-y   quarter   q-o-q
(In Euro million except for EPS)    2013    2012   (% or pt)  2012   (% or pt)
Revenues                            3,226   3,207    0.6%     4,096   -21.2%
Gross profit                         947     970     -2.4%    1,244   -23.9%
in % of revenues                    29.4%   30.2%   -0.8 pt   30.4%   -1.0 pt
Operating income / (loss)(1)        (202)   (290)     Nm       64       Nm
in % of revenues                    -6.3%   -9.0%   2.7 pt    1.6%    -7.9 pt
Net income (loss) (Group share)     (353)    259      Nm     (1,558)    Nm
EPS diluted (in Euro)              (0.16)   0.10      Nm     (0.69)     Nm
E/ADS* diluted (in USD)            (0.20)   0.13      Nm     (0.91)     Nm
Number of diluted shares (million) 2,268.8 3,021.1  -24.9%   2,268.4   0.0%

2012 figures are represented to reflect the impacts of the retroactive
application of IAS 19 revised "Employee Benefits" and IFRS 11 "Joint
Arrangements" (see Note 4 of the consolidated financial statements).

*E/ADS calculated using the US Federal Reserve Bank of New York noon
Euro/dollar buying rate of USD 1.2816 as of March 31, 2013; 1.3334 as of March
31, 2012 and USD 1.3186 as of December 31, 2012.

adjusted results

 

In addition to the reported results, Alcatel-Lucent is providing adjusted
results in order to provide meaningful comparable information, which exclude
the main non-cash impacts from Purchase Price Allocation (PPA) entries in
relation to the Lucent business combination. The first quarter 2013 adjusted^2
net loss (group share) was Euro (339) million or Euro (0.15) per diluted share
(USD (0.19) per ADS), which includes restructuring charges of Euro (122)
million, a post-retirement benefit plan amendment gain of Euro 55 million, a
net financial loss of Euro (152) million, an adjusted tax credit of Euro 42
million, and non-controlling interest charge of Euro (16) million.

 

 

Adjusted Profit & Loss           First    First   % change   Fourth  % change
Statement                       quarter  quarter    y-o-y   quarter    q-o-q
(In Euro million except for
EPS)                              2013     2012   (% or pt)   2012   (% or pt)
Revenues                         3,226    3,207     0.6%     4,096    -21.2%
Gross profit                      947      970      -2.4%    1,244    -23.9%
in % of revenues                 29.4%    30.2%    -0.8 pt   30.4%    -1.0 pt
Operating income / (loss)(1)     (179)    (222)      Nm       115       Nm
in % of revenues                 -5.5%    -6.9%    1.4 pt     2.8%    -8.3 pt
Net income (loss) (Group share)  (339)     301       Nm     (1,395)     Nm
EPS diluted (in Euro)            (0.15)    0.11      Nm      (0.61)     Nm
E/ADS* diluted (in USD)          (0.19)    0.15      Nm      (0.81)     Nm
Number of diluted shares
(million)                       2,268.8  3,021.1   -24.9%   2,268.4    0.0%

2012 figures are represented to reflect the impacts of the retroactive
application of IAS 19 revised "Employee Benefits" and IFRS 11 "Joint
Arrangements" (see Note 4 of the consolidated financial statements).

*E/ADS calculated using the US Federal Reserve Bank of New York noon
Euro/dollar buying rate of USD 1.2816 as of March 31, 2013; 1.3334 as of March
31, 2012 and USD 1.3186 as of December 31, 2012.

 

Key figures

2012 figures are represented to reflect the impacts of the retroactive
application of IAS 19 revised "Employee Benefits" and IFRS 11 "Joint
Arrangements" (see Note 4 of the consolidated financial statements).

 

Geographic breakdown  First   First  % change  Fourth  % change
of revenues          quarter quarter   y-o-y   quarter   q-o-q
(In Euro million)     2013    2012   (% or pt)  2012   (% or pt)
North America         1,545   1,342    15.1%    1,603    -3.6%
Asia Pacific           467     496     -5.8%     714    -34.6%
Europe                 771     858    -10.1%    1,109   -30.5%
RoW                    443     511    -13.3%     670    -33.9%
Total group revenues  3,226   3,207    0.6%     4,096   -21.2%

 

 

Group breakdown         First   First  % change  Fourth  % change
of revenues            quarter quarter   y-o-y   quarter   q-o-q
(In Euro million)       2013    2012   (% or pt)  2012   (% or pt)
Networks and Platforms  2,713   2,604    4.2%     3,445   -21.2%
 - o/w IP                493     464     6.3%      619    -20.4%
 - o/w Optics            342     405    -15.6%     529    -35.3%
 - o/w Wireless          966     921     4.9%     1,093   -11.6%
 - o/w Fixed Networks    405     373     8.6%      490    -17.3%
 - o/w Platforms         226     222     1.8%      398    -43.2%
 - o/w Services          293     220     33.2%     325     -9.8%
 - o/w Eliminations     (12)     (1)      Nm       (9)      Nm
Focused Businesses       244     313    -22.0%     302    -19.2%
Managed Services         204     213     -4.2%     276    -26.1%
Other and Eliminations   65      77       Nm       73       Nm
Total group revenues    3,226   3,207    0.6%     4,096   -21.2%

 

 

Breakdown of group             First   First  % change  Fourth  % change
operating income (1) (loss)   quarter quarter   y-o-y   quarter   q-o-q
(in Euro million)              2013    2012   (% or pt)  2012   (% or pt)
Networks and Platforms         (107)   (152)     Nm       136      Nm
In % of revenues               -3.9%   -5.8%   1.9 pt    3.9%    -7.8 pt
Focused Businesses              (9)     14       Nm        4       Nm
In % of revenues               -3.7%   4.5%    -8.2 pt   1.3%    -5.0 pt
Managed Services                (5)    (70)      Nm       (4)      Nm
In % of revenues               -2.5%  -32.9%   30.4 pt   -1.4%   -1.1 pt
Other and Eliminations         (58)    (14)      Nm      (21)      Nm
Total group op. income (loss)  (179)   (222)     Nm       115      Nm
In % of revenues               -5.5%   -6.9%   1.4 pt    2.8%    -8.3 pt

 

 

 

 

 

Cash Flow highlights                First quarter Fourth quarter First quarter
(In Euro million )                      2013           2012          2012
Net (debt)/cash at beginning of
period                                   147           (58)           (7)
Adjusted operating income / (loss)      (179)          115           (222)
Depreciation & Amort and adjusted
OP non cash (1)                          181           242            202
Op. Cash Flow before change in WCR*       2            357           (20)
Change in operating  WCR                (72)           253            255
Change in other working capital (2)     (74)            87           (66)
Operating Cash Flow (3)                 (144)          697            169
Interest                                (101)          (5)           (85)
Taxes                                   (28)           (8)             1
Cash contribution to pension & OPEB     (43)           (62)          (42)
Restructuring cash outlays              (100)          (85)          (82)
Cash flow from operating activities     (416)          537           (39)
Capital expenditures (incl. R&D
cap.)                                   (117)         (185)          (123)
Free Cash Flow                          (533)          352           (162)
Discontinued, Cash from financing &
Forex                                    28           (147)           947
Change in net(debt)/cash position       (505)          205            785
Net (debt)/cash at end of period        (358)          147            778
* Before changes in working capital, interest/tax paid, restructuring cash
outlay and pension & OPEB cash outlay
1) non cash items included in adjusted OP.
2) Changes in other working capital and cash impacts of P&L items below
adjusted OP.

 

Statement of position - Assets                March 31, December 31, March 31,
(In Euro million)                               2013        2012       2012
Total non-current assets                       10,900      10,708     12,335
   of which Goodwill & intangible assets, net   5,065      4,995       5,966
   of which Prepaid pension costs               2,808      2,797       2,736
   of which Other non-current assets            3,027      2,916       3,633
Total current assets                           11,819      10,646     11,418
   of which OWC assets                          4,611      4,853       5,165
   of which other current assets                 959        864        1,026
   of which marketable securities, cash &
cash equivalents                                6,249      4,929       5,227
Total assets                                   22,719      21,354     23,753
                                                                      
Statement of position - Liabilities and
equity                                        March 31, December 31, March 31,
(In Euro million)                               2013        2012       2012
Total equity                                    2,933      2,683       5,036
   of which attributable to the equity owners
of the parent                                   2,191      1,938       4,312
   of which non controlling interests            742        745         724
Total non-current liabilities                  11,874      10,358     10,571
   of which pensions and other
post-retirement benefits                        4,824      5,338       5,245
   of which long term debt                      5,915      3,954       4,172
   of which other non-current liabilities       1,135      1,066       1,154
Total current liabilities                       7,912      8,313       8,146
   of which provisions                          1,656      1,649       1,508
   of which short term debt                      779        851         325
   of which OWC liabilities                     4,137      4,444       4,514
   of which other current liabilities           1,340      1,369       1,799
Total liabilities and shareholder's equity     22,719      21,354     23,753

 

 

BUSINESS COMMENTARY

 

NETWORKS & PLATFORMS

For the first quarter 2013, revenues for Networks & Platforms were Euro 2,713
million, an increase of 4.2% compared to Euro 2,604 million in the year-ago
quarter and a -21.2% decline compared to Euro 3,445 million in the fourth
quarter 2012. At constant currency exchange rates, Networks & Platforms
revenues increased 5.6% year-over-year and decreased -19.9% sequentially. The
segment posted an adjusted^2 operating^1 loss of Euro (107) million or an
operating margin of -3.9% compared to an adjusted^2 operating^1 loss of
Euro (152) million or a margin of -5.8% in the year-ago period.

 

Key highlights:

·       Revenues for the IP division were Euro 493 million, increasing 6.3%
from the year ago quarter and 9.3% at constant currency. Revenues grew in both
the Americas and APAC regions with strong progress in our order book, as
evidenced by our recent win with Japan's NTT Communications. IP Core router
momentum continues to build with 2 new 7950 XRS wins announced in the quarter,
including Belgacom and the University of Pittsburgh Medical Center (UPMC), for
a total of 8 wins and more than 20 trials to date. Earlier this month, we
announced the launch of Nuage Networks(TM), an Alcatel-Lucent venture focused
on software defined networking (SDN) solutions, which has developed an open
software-based solution to address key datacenter network constraints that
limit cloud services adoption. Trials of the Nuage Networks Virtualized
Services Platform started in April in Europe and North America, with a number
of customers including French service provider SFR, UK cloud service provider
Exponential-e, Canada's TELUS and US healthcare provider, UPMC.

·       Revenues for the Optics division were Euro 342 million, a decrease of
15.6% from the year-ago quarter. We continued to witness declines in our
legacy equipment, which now represents 30% of our optics product revenues,
partially offset by growth in WDM in both our Europe and APAC regions. Our
1830 Photonic Service Switch continues to grow as a percentage of optical
revenues, reaching 36% in the first quarter, as sales grew at a high
double-digit rate compared to the year-ago quarter. The relative share of 100G
shipments has also continued to increase, from 12% in 2012 to 19% in the first
quarter of 2013. Traction with our 400G Photonic Service Engine has also been
confirmed, with the recent completion of successful 400G trials with Shaw
Communications in Canada, France Telecom/Orange and Telefónica España.

·       Revenues for the Wireless division were Euro 966 million, an increase
of 4.9% from the year-ago quarter. Within Wireless, we witnessed growth in LTE
and RFS, which includes cable, antenna and tower systems, that was partially
offset by an overall decline in 2G/3G technologies. Our LTE business reached
its highest level of revenues ever, as network deployments in the US continue
to drive growth. Elsewhere around the world, we signed a number of new LTE
contracts including Etisalat in Sri Lanka and unveiled lightRadio(TM) Metro
Radio with China Mobile, which will help accelerate deployment of 4G TD-LTE
technology across China.  

·       Revenues for the Fixed Networks division were Euro 405 million, an
increase of 8.6% from the year-ago quarter, reflecting strong growth in both
copper and fiber products. We expanded our fiber footprint in the quarter,
adding 13 new customers, as growth continued to be driven by APAC, and more
specifically China. Our VDSL2 vectoring products continue to be successful in
the market, shipping our 1 millionth line in the quarter, in addition to a
number of trials announced, including China Telecom and Tunisie Telecom,
totaling over 40 to-date. These, in addition to the seven new DSL customers,
helped drive overall growth in our copper business, with strong performance in
both Europe and the Americas. We are also working with P&T Luxembourg in the
world's first trial of combined VDSL2 Bonding and Vectoring technologies,
using our Zero-Touch Vectoring innovation.

·       Revenues for the Platforms division were Euro 226 million, an increase
of 1.8% from the year-ago quarter. In the quarter, we saw growth from a number
of activities within the Platforms division, including the Motive Customer
Experience Solutions business (CxS), Advanced Communications (IMS), Subscriber
Data Management and Payment & Charging businesses. The basis for growth in
these businesses was driven by LTE service introduction and smartphone
proliferation. We expanded our Payment & Charging offering in the quarter with
the introduction of our Smart Plan solution, which helps service providers
introduce new services and data plans, creating new revenue and enhancing the
customer experience.

·       Revenues for the Services division were Euro 293 million, an increase
of 33.2% from the year-ago quarter. Strong growth in the division was led by
Network Build and Implementation (NBI) as well as Integration Services, both
of which benefitted from network rollouts in the US. In the first quarter, we
have announced an agreement for the transformation of KPN's fixed network,
where we will migrate existing voice and transport networks to next-generation
technologies.

·       The improvement in adjusted operating margin from the year-ago quarter
was due to continuous actions to reduce fixed costs which were partially
offset by a slight decline from product mix.

 

 

FOCUSED BUSINESSES

For the first quarter 2013, revenues for the Focused Businesses segment were
Euro 244  million, a decrease
of -22.0%  compared to Euro 313 million in the year-ago quarter and a decrease
of -19.2% compared to
Euro 302  million in the fourth quarter 2012. At constant currency exchange
rates, Focused Businesses revenues decreased -23.0% year-over-year and
decreased -18.9% sequentially. The segment posted an adjusted^2 operating^1
loss of Euro (9) million or -3.7% of revenues, compared to an adjusted^2
operating^1 income of Euro 14 million or a margin of 4.5% in the year-ago
quarter.

 

Key highlights:

·      Revenues from our Focused Businesses decreased 22.0% in the first
quarter with declines in both our Enterprise and Submarine businesses. Our
Enterprise business saw weakness in our voice telephony equipment that was
partially offset by mid-single digit growth in data communications, where we
are gaining traction in the datacenter market. Our OpenTouch innovations have
seen a continued global ramp-up as we have added 100 new clients onto our
platform. While our Submarine business declined compared to the year-ago
quarter, the order book continued to grow which should result in an increase
in activity as the year progresses.

·       The adjusted operating margin decline of our Focused Business mainly
reflected lower volumes compared to the year-ago quarter and lower fixed cost
absorption in our Submarine business, while Enterprise showed improvements in
operating expenses.

 

MANAGED SERVICES

For the first quarter of 2013, revenues in our Managed Services business were
Euro 204 million, a decrease
of -4.2% compared to Euro 213 million in the year-ago quarter and a decrease
of -26.1% compared to
Euro 276 million in the fourth quarter 2012. At constant currency exchange
rates, our Managed Services business declined -1.4% compared to the year-ago
quarter and decreased -25.7% sequentially. The business posted an adjusted^2
operating^1 loss of Euro (5) million or -2.5% of revenues, compared to an
adjusted^2 operating^1 loss of Euro (70) million or a margin of -32.9% in the
year-ago quarter.

Key highlights:

·       Revenues from our Managed Services decreased 4.2% in the first quarter
to Euro 204 million, as we continue to restructure this business. As of the
first quarter of 2013, we have successfully addressed in total 10 of the 15
planned contracts as part of our Performance Program. In parallel, we have
entered into 5 new and extension contracts, including KPN to manage their
fixed network operations (in addition to the services mentioned above) and
Telewings, a company owned by Telenor, to provide managed and transformation
services.

·       The year-over-year improvement in the adjusted operating margin of the
Managed Services division reflects ongoing actions to reduce the cost
structure of this business, resulting mainly from exiting and restructuring
contracts as part of our Performance Program.

 

Alcatel-Lucent will host a press and analyst conference at 1 p.m. CET which
will be available live via conference call or audio webcast. All details on
www.alcatel-lucent.com/1q2013.

 

 

                           -----------------------

 

 

Notes

The Board of Directors of Alcatel-Lucent met on April 24, 2013, examined the
Group's condensed consolidated financial statements at March 31, 2013, and
authorized their issuance.

These condensed consolidated financial statements are unaudited. They are
available on our website http://www.alcatel-lucent.com/1q2013

1-      Operating income (loss) is the Income (loss) from operating activities
before restructuring costs, litigations, impairment of assets, gain (loss) on
disposal of consolidated entities and post-retirement benefit plan amendments.

2-      "Adjusted" refers to the fact that it excludes the main impacts from
Lucent's purchase price allocation.

3-      "Operating cash-flow" is defined as cash-flow after changes in working
capital and before interest/tax paid, restructuring cash outlay and pension &
OPEB cash outlay.

 

 

2013 Upcoming events

July 31, 2013: Second quarter 2013 results

 

 

 

ABOUT ALCATEL-LUCENT (EURONEXT PARIS AND NYSE: ALU)

The long-trusted  partner of  service providers,  enterprises and  governments 
around the  world, Alcatel-Lucent  is  a leading  innovator  in the  field  of 
networking and communications technology,  products and services. The  company 
is  home  to  Bell  Labs,  one  of  the  world's  foremost  research  centers, 
responsible  for   breakthroughs  that   have   shaped  the   networking   and 
communications industry.

 

Alcatel-Lucent  innovations   are   regularly  recognized   by   international 
institutions for their positive impact on society. In 2012 and for the  second 
year running, Alcatel-Lucent  was named  one of  the Thomson  Reuters Top  100 
Global Innovators, recognition  for the  company's continued  addition to  its 
world-class patent  portfolio, one  of the  largest in  the telecom  industry. 
Alcatel-Lucent has also been  recognized for its sustainability  performance.  
In 2012 the company was ranked Technology Supersector Leader by the Dow  Jones 
Sustainability  Index.  Through  its  innovations,  Alcatel-Lucent  is  making 
communications more sustainable,  more affordable  and more  accessible as  we 
pursue our mission of Realizing the Potential of a Connected World.

 

With operations throughout the world,  Alcatel-Lucent is a local partner  with 
global reach. The Company achieved revenues  of Euro 14.4 billion in 2012  and 
is incorporated in France and headquartered in Paris..

 

For more information, visit Alcatel-Lucent on:  http://www.alcatel-lucent.com, 
read     the     latest     posts      on     the     Alcatel-Lucent      blog 
http://www.alcatel-lucent.com/blog  and   follow  the   Company  on   Twitter: 
http://twitter.com/Alcatel_Lucent.

Alcatel-Lucent Press Contacts

SIMON                                            POULTER                       
simon.poulter@alcatel-lucent.com            T : +33 (0)1 40 76 50 84

VALERIE LA GAMBA                    valerie.la_gamba@alcatel-lucent.com       
T : + 33 (0)1 40 76 49 91

           

ALCATEL-LUCENT INVESTOR RELATIONS

FRANK                                           MACCARY                        
frank.maccary@alcatel-lucent.com              T : + 33 (0)1 40 76 12 11

TOM BEVILACQUA                      thomas.bevilacqua@alcatel-lucent.com      
T : + 1 908-582-7998

CORALIE                                            SPAETER                     
coralie.spaeter@alcatel-lucent.com             T : +33 (0)1 40 76 49 08

 

 

 

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 "encouraging trends in the
marketplace". Words such as "will," "expects," "looks to," "anticipates,"
"targets," "projects," "intends," "guidance", "maintain", "plans," "believes,"
"estimates," "aim," "goal," "outlook," "momentum," "continue," "reach,"
"confident in," "objective," 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
guaranties of future performance and involve certain risks, uncertainties and
assumptions that are difficult to assess, including broad trends not within
our control such as the economic climate in the world, and in particular in
those geographical areas where we are most active. 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 being
as expected, of which a continued significant growth in some of our
activities, our ability to obtain the price we estimated by a given date for
those activities we want to divest, to improve our level of free cash-flow, or
to achieve all the goals of our Performance Program,  including headcount
reduction, site rationalization, and to exit unprofitable contracts and market
at a reasonable cost. 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 intellectual property portfolio in a complex
technological environment (including defending ourselves in infringement suits
and licensing on a profitable basis our patent portfolio), 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 other 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, the social, political 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, our
ability to procure financing for our operations at an affordable cost, 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,
2012, 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 otherwise.

 

 ADJUSTED PROFORMA RESULTS

 

In Euro million except for EPS                          Q1-2013
(unaudited)                                      Reported PPA Adjusted
                                                               
Revenues                                            3,226        3,226
Cost of sales (a)                                 (2,279)      (2,279)
                                                               
Gross Profit                                          947   0      947
                                                               
Administrative and selling expenses (b)             (542)   8    (534)
Research and Development costs (c)                  (607)  15    (592)
                                                               
Operating income (loss) (1)                         (202)  23    (179)
                                                               
Restructuring costs                                 (122)        (122)
Impairment of assets                                    0            0
Post-retirement benefit plan amendment                 55           55
Litigations                                           (2)          (2)
Gain/(loss) on disposal of consolidated entities        2            2
                                                               
Income (loss) from operating activities             (269)  23    (246)
                                                               
Financial result (net)                              (152)   0    (152)
                                                               
Share in net income(losses) of equity affiliates        2            2
Income tax benefit (expense) (d)                       51 (9)       42
                                                               
Income (loss) from continuing operations            (368)  14    (354)
                                                               
Income (loss) from discontinued activities            (1)          (1)
                                                               
Net Income (loss)                                   (369)  14    (355)
                                                               
of which :   Equity owners of the parent            (353)  14    (339)
                   Non-controlling interests         (16)         (16)
                                                               
                                                               
Earnings per share : basic                         (0.16)       (0.15)
Earnings per share : diluted                       (0.16)       (0.15)

 

(1) Income (loss) from operating activities before restructuring costs,
impairment of assets, gain / (loss) on disposal of consolidated entities,
litigations and post-retirement benefit plan amendment
     Corresponds to the measure of operating income (loss) of the segments
(refer to note 5 of the consolidated financial statements at March 31, 2013).
PPA : Purchase Price Allocation entries related to Lucent business combination
Nature of PPA - non cash amortization charges included in Reported Accounts
but excluded from Adjusted Accounts (cf. Note 3 to our Consolidated Financial
Statements as of December 31, 2009)
These impacts are non recurring due to the different amortization periods
depending of the nature of the adjustments, as indicated herefater.
   (a) Depreciation of the reevaluation to fair value of productive tangible
assets
   (b) Amortization of intangibles assets - long term customer relationship
(5-8 years)
   (c) Amortization of intangibles assets : Acquired technologies (5-10 years)
and In Process R&D (5-7 years)
   (d) Normative tax impact at 39% on above PPA adjustments excluding goodwill
impairment

 

 

Alcatel-Lucent Q1 2013

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(i) the releases contained herein are protected by copyright and other
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(ii) they are solely responsible for the content, accuracy and originality of
the
information contained therein.

Source: Alcatel-Lucent via Thomson Reuters ONE
HUG#1696681
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