Key figures for the 2 th quarter 2016 and the 1 st half of 2016 (unaudited)
| € million | 2 th quarter 2016 | 2 th quarter 2015 | Change 2016-2015 | 1 st quarter 2016 | Change trim. prev. | |
| Income Statement | ||||||
| Revenue | 3079 | 3450 | – 11% / -9% * | 3017 | 2% / 2% * | |
| Including high-speed networks | 1639 | 1865 | – 12% / – 11% * | 1588 | 3% / 3% * | |
| Including IP Networks and Applications | 1159 | 1304 | – 11% / – 8% * | 1181 | -2% / – 1% * |
* At constant rates
| In millions of euros (Except for earnings per share) | 1 st half 2016 | 1 st half 2015 | Change 2016-2015 | |
| Income Statement | ||||
| Revenue | 6096 | 6685 | – 9% / – 8% * | |
| Including high-speed networks | 3227 | 3757 | – 14% / – 14% * | |
| Including IP Networks and Applications | 2340 | 2424 | – 3% / – 2% * | |
| gross profit | 2154 | 2321 | – 167 | |
| in% of revenues | 35.3% | 34.7% | 60 bps | |
| operating income | 157 | 257 | – 100 | |
| in% of revenue | 2.6% | 3.8% | – 120 bps | |
| Reported net income (group share) | 1321 | – 145 | 1466 | |
| Result published per diluted share (euro) | 0.37 | -0.05 | Ns | |
| cash Flow | ||||
| Free cash Flow | – 2073 | -267 | – 1806 |
* At constant rates
Paris, 4 August 2016 – Alcatel-Lucent issued its turnover for the 2 th quarter 2016 results for the 1 st half of 2016. Olivier Durand, CEO of Alcatel-Lucent, said: “Although our results for the 1 st half of 2016 were affected by a difficult market infrastructure networks, operating profitability Alcatel-Lucent remains strong, with continued progress on gross margin and costs. Free cash flow 1 st half of 2016 reflects mainly the implementation of the optimization program of Nokia’s capital structure, and a number of elements not recurrent related to change of control. Integration with Nokia continues at a rapid pace, all decisions were made about our products portfolio and the implementation of synergies was launched. During the 2 th quarter 2016, Alcatel-Lucent and Nokia have reached a milestone, Nokia exceeding 95% of the capital of Alcatel-Lucent. The transaction will be finalized by a public exchange offer in cash, followed by the withdrawal in cash for our actions and remaining OCEANEs. “
POINTS CL E S oF 1 st YEAR 2016
· the Group’s revenues are from 6096 million, down 9% from the same period last year. at constant exchange rates revenues would have decreased by 8%.
· at 1 st half of 2016, gross margin was 35.3% against 34.7% in the 1 st half of 2015. This improvement comes from the positive development costs and a favorable mix, which more than offset the negative impact of certain integration projects. excluding this negative impact, gross profit would have been approximately 35.9% .
· the operating margin of 2.6%, decreased by 120 basis points compared to the same period last year, this decline mainly from the decrease in turnover overall business. Excluding the negative impact mentioned above, the operating margin would have been approximately 3.1%.
· Reported net income (group share) was 1,321 million euros or 0.37 euros per diluted share in the 1 st half of 2016, compared with a reported net income (group share) of euro 145 million or -0 .05 per share in the same period last year. This positive result in 1 st half of 2016 is mainly due to the activation of certain deferred tax assets for an amount of € 2.4 billion, partly offset by asset impairment of € 489 million, related to the early termination of our license agreements with Qualcomm and reassessment of the value of our brands.
· Free cash flow of 2,073 million euros in the 1 st half of 2016 reflects mainly the implementation of the optimization of Nokia’s capital structure program, especially receivables sales discounts and expenses related to accelerated repayment of our obligations, Nokia now providing credit facilities to Alcatel-Lucent. The implementation of the optimization of the capital structure of the program will reduce the costs associated with financing activities. Free cash flow was also negatively impacted by other factors including mainly the early termination of a licensing agreement with Qualcomm, which has had a change of control clause. Excluding these items, free cash flow for the first half of 2016 would have been approximately -270 000 000 euros, a level comparable to the 1 st half of 2015.
POINTS CL E S OF 2 th Quarter 2016
key Elements of the turnover
| Group (in millions of euros) | 2 th quarter 2016 | 2 th class=”hugin”/> quarter 2015 | Change 2015-2016 (current) | Change 2015-2016 (constant) | 1 st class=”hugin”/> quarter 2016 | trim. prev. (Current) | trim. prev. (Constant) |
| Total Networks | 2798 | 3169 | – 12% | – 10% | 2769 | 1% | 1% |
| very high-speed networks | 1 639 | 1865 | -12% | 11% | 1588 | 3% | 3% |
| mobile networks | 1033 | 1318 | – 22% | – 21% | 992 | 4% | 3% |
| fixed Networks | 606 | 547 | 11% | 14% | 596 | 2% | 2% |
| IP Networks and Applications | 1159 | 1304 | 11% | 8% | 1181 | 2% | -1% |
| Networks IP / Optical | 995 | 1073 | – 7% | – 4% | 991 | 1 % | 2% |
| Applications & amp; Analysis | 164 | 231 | – 29% | – 27% | 190 | 14% | – 13% |
| Common Revenues in Corporate and Other 1) | 281 | 281 | 0% | – 3% | 248 | 13% | 14% |
| Total Group income | 3079 | 3450 | – 11% | – 9% | 3017 | 2% | 2% |
1) After elimination of inter-segment revenue
· sales Group 2 th quarter 2016 reached 3,079 million euros in annual
down 11% at current currency and up 2% compared to 1 st quarter 2016. at constant exchange rates, revenues would have decreased by 9% compared to the same period last year and would have increased by 2% compared to the 1 st quarter 2016.
· sales activity Networks spring 2798 million in annual drop 12% at current currency and up 1% compared to the 1 st quarter 2016. at constant currency, revenues would have decreased annually by 10% and would have increased 1% compared to the 1 st quarter 2016.
· the revenues in the segment of high-speed networks s’ totaled 1639 million euros in the 2 th quarter 2016, declining 12% from the previous year at current exchange rates and up 3% compared to the 1 st quarter 2016. at constant currency, revenues would have decreased annually by 11% and would have increased by 3% compared to the 1 st quarter 2016. the annual decline primarily mobile networks, partly offset by growth in fixed networks.
the decline in mobile networks was primarily due to a decreased level of activity in all regions, particularly in North America and Greater China.
the growth in fixed networks is mainly due to the high access speed and digital home, partially offset by a decrease in services. Fixed networks have benefited from major projects with some customers in Australia and Mexico, as well as continuing the strong momentum of domestic digital access in North America.
· sales of IP Networks and Applications segment stood at 1159 million euros in 2 th quarter 2016, an annual decrease of 11% at current exchange rates and down 2% from the 1 st quarter 2016. at constant currency, revenues would have decreased annually by 8% and 1% from the 1 st quarter of 2016. the annual decrease is both IP / Optical and business Applications & amp; Analysis.
In the IP / Optical, revenues declined in both IP routing and optical networks, compared to a high basis of comparison with the 2 th quarter 2015. 2 th quarter 2016, IP routing declined in North America due to lower customer spending “Tier 1″, partially offset by increased customer spending “Tier 1″ in Greater China and Asia-Pacific. Optical networks have faced an important basis for comparison with the 2 th quarter last year, revenues have been negatively affected by the timing of projects, mainly in the Middle -orient and Africa
the decrease in revenues from the activity Applications & amp. Analysis is due to the decrease of all sectors, mainly because of the large projects Calendar in North America.
· Sales Activities segment common to the Group and Other totaled 281 million euros, stable at current exchange rates compared to the same period last year and up 13% compared to the 1 st quarter 2016. constant exchange rates, revenues would have decreased annually by 3% and increased 14% compared to the 1 st quarter 2016.
geographic Information
Since the first quarter 2016, Alcatel-Lucent has aligned its geographic structure financial information with Nokia, publishing six regions: Asia Pacific, Europe, Greater China, Latin America, Middle East & amp; Africa and North America. For purposes of comparison, Alcatel-Lucent has also restated its turnover from 2 th quarter 2015.
| Geographical distribution of income (in millions of euros ) | 2 th quarter 2016 | 2 th class=”hugin”/> quarter 2015 | 2015-2016 | 1 st quarter 2016 | Change Trim. prev. |
| Asia Pacific | 362 | 304 | 19% | 358 | 1% |
| Europe | 767 | 830 | 8% | 754 | 2% |
| Greater China | 281 | 339 | -17% | 197 | 43% |
| Latin America | 202 | 196 | 3% | 184 | 10% |
| Middle East & amp; Africa | 149 | 249 | 40% | 171 | -13% |
| North America | 1318 | 1532 | -14% | 1353 | -3% |
| Group revenues Total | 3079 | 3450 | – 11% | 3017 | 2% |
from the geographical point of view sales in North America decreased by 14% compared to the same period last year, to 1,318 million euros, mainly mobile networks. Revenues in Greater China totaled 281 million euros, a decrease of 17% compared to the same period last year, mainly due to mobile networks. Sales in the Middle East and Africa totaled 149 million, a decrease of 40% compared to the same period last year, due to significant revenue in optical networks in the 2 th quarter 2015 revenue in Asia Pacific totaled 362 million euros, up 19% compared to the same quarter last year, due to fixed networks. Revenue in Europe was $ 767 million, representing a decrease of 8% compared to the previous year.
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