Alcatel Optronics' sales fall again; tracking stock axed
Alcatel Optronics' sales were EUR10.6m for Q4/2002 (down 18.5% on Q3) and EUR84.1m for 2002 (down 82% on 2001),
"Q4, although marginally better than anticipated, still shows a net sequential recession," says CEO Jean-Christophe Giroux. "Our focus remains our Strategic Refocus Plan. US operations have been successfully divested and the Canadian activities have been shut down after transfer to the UK.
"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," he adds.
"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."
- Alcatel's board will submit a resolution at its Annual Shareholders' Meetings on 17 April to convert all outstanding class O shares — issued in October 2000 to track the performance of Optronics — into Alcatel ordinary shares on a one-for-one basis.
Market conditions appear likely to negatively affected Optronics' performance beyond 2003. "Despite a restructuring program that was expanded in 2002, there is no assurance that this business can achieve break-even in the mid term."
"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." Elimination of the tracking stock will give more flexibility in addressing the future of the Optronics business as Alcatel seeks strategic alternatives for it.