Alcatel-Lucent on Wednesday launched ‘The Shift Plan’, a detailed three-year plan to reposition the Company as a specialist provider of IP Networking and ultra-broadband access, the high-value equipment and services that lie at the heart of the high-performance networks of tomorrow.
 
Under The Shift Plan, Alcatel-Lucent is planning to grow its revenues in Core Networking by more than 15%, from Euro 6.1 billion in 2012 to over Euro 7 billion in 2015, while lifting its operating margins in this segment from 2.4% in 2012 to more than 12.5% in 2015.
 
Over the same period, a strategic focus on cash management in wireless, fixed access and other businesses, emphasizing investment in 4G LTE, vectoring and fiber-based access systems while significantly reducing R&D spending on legacy technologies, is expected to deliver positive segment operating cash flow of more than Euro 250 million in 2015.
 
 The Shift Plan will mobilize the full range of Alcatel-Lucent’s assets and resources to achieve a decisive shift in the Group’s industrial focus that will concentrate the Company on the priorities of its telecommunications customers as they deploy next-generation networks to address the explosive growth in bandwidth-hungry data traffic. This new focus on the fast-growing business segments of IP Networking, cloud technologies and Ultra-Broadband Access will be delivered by a management team organized around full profit-and-loss (P&L) and cash accountability.
 
Importantly, The Shift Plan entails a clearly differentiated approach to the management of high-growth businesses – Core Networking, as opposed to those that will be managed with cash generation as the clear priority. The ‘managed for cash’ businesses will include key wireless, fixed access and other businesses that will play an important role in the Company’s medium and long-term development. Specifically, the Company expects that this will create enhanced opportunities for its LTE and ‘FTTx’ businesses.
 
The Shift Plan will capitalize on Alcatel-Lucent’s recognized innovation assets, particularly its research laboratories, Bell Labs, while equipping the Company with the appropriate means to fulfill its ambitions.
 
Alcatel-Lucent CEO Michel Combes said: “The Shift Plan is fundamentally an industrial plan that also addresses the Group’s operational and financial challenges by putting in place a strong and fully accountable leadership team with clear goals and the appropriate levers to deliver on these goals and on our commitments to all stakeholders.”
 
“With The Shift Plan, which is designed to be self-funding, we are aligning realistic and deliverable ambitions with our core competencies. Over the next three years we are targeting Euro 1 billion of fixed costs savings, and carefully defined and timed asset sales expected to generate at least an additional Euro 1 billion”, he added
 
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