Alcatel Optronics sales down 18.5% sequentially; tracking stock to be eliminated
12 February 2003 -- For Paris-based Alcatel Optronics, Q4/2002 sales were EUR10.6m (down 18.5% on Q3), loss from operations was EUR32.4m, and net loss was EUR115.5m. For full-year 2002, sales were EUR84.1m (down 82% on 2001's EUR470m), loss from operations was EUR171.4m (up on EUR58.6m) and net loss was EUR418.8m (up on EUR144.3m).
"The fourth quarter, although marginally better than anticipated, still shows a net sequential recession," says CEO Jean-Christophe Giroux. "Our focus remains to execute on our Strategic Refocus Plan, while sustaining our commercial and technological footprint. Our US operations have been successfully divested and the Canadian activities have been shut down following their transfer to the UK."
He adds: "We are pleased to see the first recognition signals of our Hybrid strategy. All restructuring actions are proceeding according to plan, with headcount and fixed costs cut by half versus end-2001."
"The phasing of any market recovery still remains unclear. We are anticipating sales for Q1/2003 of EUR7-8m, which reflects both our sustained caution on the immediate future, as well as the deconsolidation effect of our US activities...Operating losses should be contained within a EUR25m range."
* After analysing optoelectronics market conditions, Alcatel's board is to submit for approval a resolution at its Annual Shareholders' Meetings scheduled on 17 April to convert all outstanding Alcatel class O shares - which were issued in October 2000 and track the performance of its Optronics activity - into Alcatel ordinary shares on a one-for-one basis.
It was noted that current conditions are very different from those that existed at the time the class O share was created and these conditions negatively affected the Optronics activity's performance and appear likely to do so at least throughout 2003 and later.
"During 2001 and 2002, the Optronics activity has suffered from a deteriorating financial situation and, despite a restructuring program that was expanded in 2002, there can be no assurance that this business can achieve break-even in the mid term," Alcatel says.
"The profound and long-lasting trend in this business has caused many of the participants in this segment to reassess their strategies for optoelectronics businesses and to consider strategic alternatives, such as shutting down their activities, drastically reducing their size and objectives or selling to emerging players who have aggressive strategies of consolidation, synergies and economies of scale. Alcatel believes that the elimination of the tracking stock will give it more flexibility as it addresses the future of the Optronics business and continues to explore strategic alternatives for the activity."